10q10k10q10k.net

What changed in Meridian Corp's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Meridian Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+245 added−221 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-17)

Top changes in Meridian Corp's 2025 10-K

245 paragraphs added · 221 removed · 180 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

46 edited+31 added−23 removed123 unchanged
Biggest change(dollars in thousands / population actual) United States Pennsylvania Maryland Population (1) 308,449,281 13,002,700 6,177,224 Median household income (1) $ 63 $ 62 $ 85 Unemployment rate (2) 4.20 % 3.60 % 3.10 % Philadelphia Metropolitan Area Counties (dollars in thousands / population actual) Bucks County Montgomery County Delaware County Chester County Philadelphia County Total Population (1) 645,054 864,683 575,182 545,823 1,567,258 4,198,000 Median household income (1) $ 99 $ 99 $ 80 $ 110 $ 53 $ 88 Unemployment rate (2) 2.90 % 2.70 % 3.10 % 2.40 % 4.40 % Baltimore Metropolitan Area Counties (dollars in thousands / population actual) Howard County Montgomery County Anne Arundel County Prince George's County Baltimore County Total Population (1) 335,411 1,052,521 593,286 946,971 846,161 3,774,350 Median household income (1) $ 130 $ 117 $ 108 $ 91 $ 82 $ 106 Unemployment rate (2) 2.10 % 2.40 % 2.30 % 3.10 % 2.70 % Delaware Counties Florida County (dollars in thousands / population actual) Kent County Sussex County New Castle County Total Lee County Population (1) 188,946 255,956 575,494 1,020,396 822,453 Median household income (1) $ 64 $ 69 $ 78 $ 70 $ 63 Unemployment rate (2) 3.6 % 3.2 % 3.0 % 3.1 % (1) Source: U.S.
Biggest change(dollars in thousands / population actual) United States Pennsylvania Maryland Population (1) 342,328,095 13,059,432 6,177,224 Median household income (1) $ 82 $ 78 $ 103 Unemployment rate (2) 4.20 % 4.20 % 4.20 % Philadelphia Metropolitan Area Counties (dollars in thousands / population actual) Bucks County Montgomery County Delaware County Chester County Philadelphia County Total Population (1) 646,538 856,553 534,413 576,830 1,603,797 4,218,131 Median household income (1) $ 113 $ 112 $ 131 $ 90 $ 61 $ 101 Unemployment rate (2) 4.00 % 3.00 % 3.50 % 2.60 % 4.50 % Baltimore Metropolitan Area Counties (dollars in thousands / population actual) Howard County Montgomery County Anne Arundel County Prince George's County Baltimore County Total Population (1) 332,317 1,062,061 967,201 967,201 854,535 4,183,315 Median household income (1) $ 152 $ 141 $ 99 $ 99 $ 88 $ 116 Unemployment rate (2) 3.10 % 3.50 % 3.10 % 4.30 % 3.60 % Delaware Counties Florida County (dollars in thousands / population actual) Kent County Sussex County New Castle County Total Lee County Population (1) 181,851 237,378 570,719 989,948 760,822 Median household income (1) $ 81 $ 85 $ 90 $ 85 $ 84 Unemployment rate (2) 5.6 % 5.1 % 5.0 % 4.9 % (1) Source: U.S.
These laws include the ECOA, the Fair Credit Reporting Act, the TILA, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, Fair Credit Reporting Act, the Service Members Civil Relief Act, the Right to Financial Privacy Act, Telephone Consumer Protection Act, CAN-SPAM Act, and these laws’ respective state-law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices.
These laws include the ECOA, the Fair Credit Reporting Act, the TILA, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, the Right to Financial Privacy Act, 11 Telephone Consumer Protection Act, CAN-SPAM Act, and these laws’ respective state-law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices.
Safety and Soundness Standards The FDIA requires the federal banking agencies to prescribe standards, by regulations or guidelines, relating to internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, asset quality, earnings, stock valuation and compensation, fees and benefits, and such other operational and managerial standards as the 10 agencies deem appropriate.
Safety and Soundness Standards The FDIA requires the federal banking agencies to prescribe standards, by regulations or guidelines, relating to internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, asset quality, earnings, stock valuation and compensation, fees and benefits, and such other operational and managerial standards as the agencies deem appropriate.
Item 1. Business General The Corporation is a bank holding company engaged in banking activities through its wholly-owned subsidiary, Meridian Bank (the “Bank”), a full-service, state-chartered commercial bank with offices in the Delaware Valley tri-state market, which includes Pennsylvania, New Jersey and Delaware, as well as in the Central Maryland market, and Florida.
Item 1. Business General The Corporation is a bank holding company engaged in banking activities through its wholly-owned subsidiary, Meridian Bank (the “Bank”), a full-service, state-chartered commercial bank with offices in the Delaware Valley tri-state market, which includes Pennsylvania, New Jersey and Delaware, as well as in the Central Maryland market, and southwest Florida.
Federal law permits state and national banks to merge with banks in other states subject to: (i) regulatory approval; (ii) federal and state deposit concentration limits; and (iii) any state law limitations requiring the merging bank to have been in existence for a minimum 11 period of time (not to exceed five years) prior to the merger.
Federal law permits state and national banks to merge with banks in other states subject to: (i) regulatory approval; (ii) federal and state deposit concentration limits; and (iii) any state law limitations requiring the merging bank to have been in existence for a minimum period of time (not to exceed five years) prior to the merger.
These final rules prohibit creditors, such as the Bank, from extending residential mortgage loans without regard for the consumer’s ability to repay 12 and add restrictions and requirements to residential mortgage origination and servicing practices. In addition, these rules restrict the imposition of prepayment penalties and restrict compensation practices relating to residential mortgage loan origination.
These final rules prohibit creditors, such as the Bank, from extending residential mortgage loans without regard for the consumer’s ability to repay and add restrictions and requirements to residential mortgage origination and servicing practices. In addition, these rules restrict the imposition of prepayment penalties and restrict compensation practices relating to residential mortgage loan origination.
These offices extend from the Delaware Valley/Philadelphia market area to Delaware, Central Maryland, and Florida. Demographic information for the five county Philadelphia metropolitan area (Philadelphia County, Chester County, Delaware County, Montgomery County, Bucks County) shows our primary market to be stable, with moderate population growth. According to the U.S.
These offices extend from the Delaware Valley/Philadelphia market area to Delaware, Central Maryland, and southwest Florida. Demographic information for the five county Philadelphia metropolitan area (Philadelphia County, Chester County, Delaware County, Montgomery County, Bucks County) shows our primary market to be stable, with moderate population growth. According to the U.S.
Census Data – 2020 (2) Source: U.S. Bureau of Labor Statistics –December 2024 6 Competition Overall, the banking business in our market area is highly competitive. The Bank faces substantial competition both in attracting deposits and in originating loans. The Bank competes with local, regional and national commercial banks, savings banks, and savings and loan associations.
Census Data – 2024 (2) Source: U.S. Bureau of Labor Statistics –December 2025 6 Competition Overall, the banking business in our market area is highly competitive. The Bank faces substantial competition both in attracting deposits and in originating loans. The Bank competes with local, regional and national commercial banks, savings banks, and savings and loan associations.
During 2024 Meridian invested throughout the organization in terms of in-house and external training programs to help our employees develop leadership skills, stay current on professional development topic in their area of focus, as well as to keep up to date on cybersecurity, and risk & compliance matters that impact the organization overall.
During 2025 Meridian invested throughout the organization in terms of in-house and external training programs to help our employees develop leadership skills, stay current on professional development topic in their area of focus, as well as to keep up to date on cybersecurity, and risk & compliance matters that impact the organization overall.
The mortgage segment operates and originates mortgage loans in the Delaware Valley tri-state market, and Maryland markets, most typically for 1-4 family dwellings, with the intention of selling substantially all of these loans in the secondary market to qualified investors, while often retaining the servicing rights on these loans.
The mortgage segment operates and originates loans in the Delaware Valley tri-state market, Maryland markets and south Florida markets, most typically for 1-4 family dwellings, with the intention of selling substantially all of these loans in the secondary market to qualified investors, while often retaining the servicing rights on these loans.
In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines.
In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the 10 risk and exposures specified in the guidelines.
However, the Dodd-Frank Act permits well-capitalized and well-managed banks to establish new branches across state lines without these impediments. Consumer Financial Protection The Bank is subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.
However, the Dodd-Frank Act permits well-capitalized and well-managed banks to establish new branches across state lines without these impediments, unless expressly prohibited. Consumer Financial Protection The Bank is subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.
Our commercial and industrial lending department supports our small business and middle market borrowers with a comprehensive selection of loan products including financing solutions for wholesalers, manufacturers, distributors, service providers, importers and exporters, among others. Our portfolio includes business lines of credit, term loans, SBA lending, lease financing, other financings, and SNCs. We have no particular credit concentration.
Our commercial and industrial lending department supports our small business and middle market borrowers with a comprehensive selection of loan products including financing solutions for wholesalers, manufacturers, distributors, service providers, importers and exporters, among others. Our portfolio includes business lines of credit, term loans, small business lending and financing, and lease financing. We have no particular credit concentration.
Our sixth branch is in Philadelphia. These branches provide “Relationship Hubs” for our regional lending groups and allow Meridian to serve markets at or near the county seat of counties in and surrounding Philadelphia. In addition to our deposit taking branches, there are currently 12 other locations, including Corporate headquarters, that serve as loan production offices.
These branches provide “Relationship Hubs” for our regional lending groups and allow Meridian to serve markets at or near the county seat of counties in and surrounding Philadelphia. In addition to our deposit taking branches, there are currently 10 other locations, including Corporate headquarters, that serve as loan production offices.
Wealth Management and Advisory Services Meridian Wealth, a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future.
Wealth Management and Advisory Services The second line of business is wealth management and advisory services. Meridian Wealth, a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future.
The principles in the 2006 CRE Guidance remain relevant, particularly in challenging economic environments, and particularly for institutions engaged in significant CRE lending strategies to help them remain healthy and profitable while continuing to serve the credit needs of the community.
As of December 31, 2025, the principles in the 2006 CRE Guidance remain relevant, particularly in challenging economic environments, and particularly for institutions engaged in significant CRE lending strategies to help them remain healthy and profitable while continuing to serve the credit needs of the community.
For 2024, our turnover rate was approximately 2%, which makes our overall retention rate very high compared to peers. We believe our culture, our effort to maintain a meritocracy in terms of opportunity and our continued evolution and growth contribute to our success in attracting and retaining strong talent.
For 2025, our turnover rate was approximately 1.9%, which makes our overall retention rate very high compared to peers. We believe our culture, our effort to maintain a meritocracy in terms of opportunity and our continued evolution and growth contribute to our success in attracting and retaining strong talent.
As we are currently in a very competitive hiring market, we utilize various methods to find well-qualified talent including third party search firms, social media, internal candidates already in our organization and on campus recruiting at local universities. During 2024, we hired 65 professionals, 55% of which were women, and 31% of which were ethnically diverse.
As we are currently in a very competitive hiring market, we utilize various methods to find well-qualified talent including third party search firms, social media, internal candidates already in our organization and on campus recruiting at local universities. During 2025, we hired 74 professionals, 41% of which were women, and 24% of which were ethnically diverse.
We have a financial services business model with non-interest revenue streams from mortgage lending, SBA lending and wealth management services. We provide services to small and middle market businesses, professionals and retail customers throughout our market area. We have a modern, progressive, consultative approach to creating innovative solutions for our customers.
We have a financial services business model with non-interest revenue streams from mortgage banking, the sale of SBA loan guarantees and wealth management services. We provide services to small and middle market businesses, professionals and retail customers throughout our market area. We have a modern, progressive, consultative approach to creating innovative solutions for our customers.
Human Capital Resources At December 31, 2024, we employed 322 individuals, nearly all of whom are full-time and of which 48% are women. Women make up 32% of all officers throughout the Meridian organization. None of these employees are covered by collective bargaining agreements, and Meridian believes it enjoys good relations with its personnel.
Human Capital Resources At December 31, 2025, we employed 327 individuals, nearly all of whom are full-time and of which 49% are women. Women make up 33% of all officers throughout the Meridian organization. None of these employees are covered by collective bargaining agreements, and Meridian believes it enjoys good relations with its personnel.
Our Current Capital Stock Structure As of December 31, 2024, Meridian had 13,243,258 shares of common stock, $1 par value, issued and 11,240,075 shares outstanding. There are 2,003,183 shares held in treasury. Information about Meridian Our executive offices are located at 9 Old Lincoln Highway, Malvern, PA 19355 and our telephone number is (484) 568-5000.
Our Current Capital Stock Structure As of December 31, 2025, Meridian had 13,829,645 shares of common stock, $1 par value, issued and 11,826,462 shares outstanding. There are 2,003,183 shares held in treasury. Information about Meridian Our executive offices are located at 9 Old Lincoln Highway, Malvern, PA 19355 and our telephone number is (484) 568-5000.
Our mortgage consultants guide our clients through the complex process of obtaining a loan to meet consumer needs. Originations consist of consumer for-sale mortgage loans, loans to be held within our portfolio, and wholesale mortgage loans. Clients include homeowners and smaller scale investors.
Mortgage Banking The third line of business is mortgage banking. Our mortgage consultants guide our clients through the complex process of obtaining a loan to meet consumer needs. Originations consist of consumer for-sale mortgage loans, loans to be held within our portfolio, and wholesale mortgage loans and home equity loans. Clients include homeowners and smaller scale investors.
The mortgage division performs origination, processing, underwriting, closing and post-closing functions both from our Blue Bell mortgage headquarters with 5 other loan production offices in the Delaware Valley tri-state market, and from Maryland through our footprint of 3 other production/processing offices in the state.
The mortgage division performs origination, processing, underwriting, closing and post-closing functions both from our East Norriton mortgage headquarters with 5 other loan production offices in the Delaware Valley tri-state market and also in Florida, and from Maryland through our footprint of 2 other production/processing offices in the state.
Census Bureau – 2020, the median household income in this area is $88,336 compared to the national average of $62,843, while the total population in this market was 4,198,000. Demographic information for the five county Baltimore metropolitan area (Baltimore County, Howard County, Montgomery County, Anne Arundel County, Prince George’s County) also shows that this secondary market is stable.
Census Bureau – 2024, the median household income in this area is $101 thousand compared to the national average of $82 thousand, while the total population in this market was 4,218,131. Demographic information for the five county Baltimore metropolitan area (Baltimore County, Howard County, Montgomery County, Anne Arundel County, Prince George’s County) also shows that this secondary market is stable.
In 2024, we donated $546 thousand to over 100 organizations throughout the various communities that we serve in Pennsylvania, New Jersey, Delaware, Maryland, and Florida. Meridian also sponsors individual / group service days and provides time off to employees to participate in charitable activities in the communities we serve.
In 2025, we donated $727 thousand in total to over 100 such organizations and institutions throughout the communities that we serve in Pennsylvania, New Jersey, Delaware, Maryland, and Florida. Meridian also sponsors individual / group service days and provides time off to employees to participate in charitable activities. Meridian encourages employees to serve on boards of community organizations.
According to the U.S. Census Bureau – 2020, the median household income in the Baltimore metropolitan area is $105,582 compared to the national average of $62,843, while the total population in this market was 3,774,350. The Delaware and Florida markets were serve are also stable with moderate population growth.
According to the U.S. Census Bureau – 2024, the median household income in the Baltimore metropolitan area is $116 thousand compared to the national average of $82 thousand, while the total population in this market was 4,183,315. The Delaware and Florida markets we serve are also stable with moderate population growth.
Under the Basel III Capital Rules, the minimum capital ratios are (i) 4.5% CET1 to risk-weighted assets, (ii) 6% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets, (iii) 8% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets and (iv) 4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).
Until the revised capital rule becomes effective, minimum Basel III regulatory capital requirements applicable to the Corporation and the Bank remain in place, including: (i) 4.5% CET1 to risk-weighted assets, (ii) 6% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets, (iii) 8% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets and (iv) 4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).
Market Area Meridian is headquartered in Malvern, PA, and has an operations center in Exton, PA, and six full-service branches in Philadelphia and surrounding counties. Its main branch, in Wayne, serves the Main Line. The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively.
Market Area Meridian is headquartered in Malvern, PA, has an operations center in Exton, PA, and seven full-service branches in Philadelphia and surrounding counties. Its main branch, in Wayne, serves the Main Line.
Such clients include professionals, higher net worth individuals, companies seeking to provide benefits plans for their employees, and more. Acquiring and sustaining wealth is a gradual progression, one that requires a considerable amount of thought and planning. Our process takes a comprehensive approach to financial planning and encompasses all aspects of retirement, with an emphasis on sustainability.
Such clients include professionals, higher net worth individuals, companies seeking to provide benefits plans for their employees, business and consumer customers of the bank, and more. Acquiring and sustaining wealth is a gradual progression, one that requires a considerable amount of thought and planning.
The proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the Federal Reserve from large debit card issuers. Federal Home Loan Bank Membership The Bank is a member of the FHLB, which serves as a central credit facility for its members.
The proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the Federal Reserve from large debit card issuers. As of December 31, 2025 the proposal had not yet been adopted.
Meridian Wealth offers a significant enhancement to both our capacity and the variety of tools we can use to help bring effective financial planning and wealth management services to a broad segment of customers. 5 Mortgage Banking The third line of business is mortgage banking.
Our process takes a comprehensive approach to financial planning and encompasses all aspects of retirement, with an emphasis on 5 sustainability. Meridian Wealth offers a significant enhancement to both our capacity and the variety of tools we can use to help bring effective financial planning and wealth management services to a broad segment of customers.
In the event of our bankruptcy, any commitment by us to a federal banking regulatory agency to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to priority of payment. 9 Regulatory Capital Requirements The Federal Reserve monitors the capital adequacy of the holding company on a consolidated basis, and the FDIC and the PDBS monitor the capital adequacy of the Bank.
In the event of our bankruptcy, any commitment by us to a federal banking regulatory agency to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to priority of payment. 9 Regulatory Capital Requirements The Corporation and the Bank remain subject to regulatory capital standards administered by the Federal Reserve, the FDIC, and the Pennsylvania Department of Banking and Securities, each of which monitors capital adequacy through a combination of risk‑based measures and leverage requirements.
For banks with less than $50 billion in total assets, compliance would be required approximately 2.5 years after adoption of the final rule. 13 Anti-Money Laundering and the USA PATRIOT ACT The USA PATRIOT Act of 2001, which was enacted in the wake of the September 11, 2001 attacks, includes provisions designed to combat international money laundering and advance the U.S. government’s war against terrorism.
Anti-Money Laundering and the USA PATRIOT ACT The USA PATRIOT Act of 2001, which was enacted in the wake of the September 11, 2001 attacks, includes provisions designed to combat international money laundering and advance the U.S. government’s war against terrorism.
In May 2022, the Federal Reserve, the FDIC and the OCC issued a joint proposal that would, among other things (i) expand access to credit, investment and basic banking services in low - and moderate-income communities, (ii) adapt to changes in the banking industry, including internet and mobile banking, (iii) provide greater clarity, consistency and transparency in the application of the regulations and (iv) tailor performance standards to account for differences in bank size, business model, and local conditions.
The new rule expands access to credit, investment, and basic banking services in low- and moderate-income communities, adapts to changes in the banking industry (including internet and mobile banking), provides greater clarity, consistency, and transparency in the application of the regulations, and tailors performance standards to account for differences in bank size, business model, and local conditions.
Future Legislation and Regulation Congress may enact legislation from time to time that affects the regulation of the financial services industry, and state legislatures may enact legislation from time to time affecting the regulation of financial institutions chartered by or operating in those states.
The final rule requires Meridian to adopt a clawback policy within 60 days after such listing standard becomes effective, which Meridian did on November 21, 2023. 14 Future Legislation and Regulation Congress may enact legislation from time to time that affects the regulation of the financial services industry, and state legislatures may enact legislation from time to time affecting the regulation of financial institutions chartered by or operating in those states.
The FDIA sets forth the following five capital tiers for purposes of implementing the PCA regulations: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” Liquidity Regulations Historically, the regulation and monitoring of bank and bank holding company liquidity has been addressed as a supervisory matter, without required formulaic measures.
Liquidity Regulations Historically, the regulation and monitoring of bank and bank holding company liquidity has been addressed as a supervisory matter, without required formulaic measures.
The advisory also continues to emphasize the importance of effectively managing liquidity and funding risks, which can compound lending risks, particularly for CRE concentrated institutions. This advisory does not create new risk management principles; however, it does update and build upon previously issued guidance.
In the Updated CRE Guidance, the FDIC conveys several key risk management practices to consider in managing CRE loan concentrations in the current challenging economic environment. The advisory also continues to emphasize the importance of effectively managing liquidity and funding risks, which can compound lending risks, particularly for CRE concentrated institutions.
During the first quarter of 2020, the Bank adopted the community bank leverage ratio framework as its primary regulatory capital ratio. With respect to the Bank, the Capital Rules also revised the prompt corrective action regulations pursuant to Section 38 of the FDIA. See “Prompt Corrective Action Framework” below.
As of December 31, 2025, these CBLR revisions remain proposed but not yet final. With respect to the Bank, the Capital Rules also revised the prompt corrective action regulations pursuant to Section 38 of the FDIA. See “Prompt Corrective Action Framework” below.
The FHLB is funded primarily from proceeds from the sale of obligations of the FHLB system. It makes loans to member banks in the form of FHLB advances. All advances from the FHLB are required to be fully collateralized as determined by the FHLB.
Federal Home Loan Bank Membership The Bank is a member of the FHLB, which serves as a central credit facility for its members. The FHLB is funded primarily from proceeds from the sale of obligations of the FHLB system. It makes loans to member banks in the form of FHLB advances.
In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount and the borrower’s total debt-to-income ratio must be no higher than 43% (subject to certain limited exceptions for loans eligible for purchase, guarantee or insurance by a government sponsored enterprise or a federal agency).
In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount, and the loan must meet certain underwriting requirements.
Commercial Real Estate Guidance In December 2023, the FDIC released a statement entitled “Managing Commercial Real Estate Concentrations in a Challenging Economic Environment” (the “Updated CRE Guidance”). In the Updated CRE Guidance, the FDIC conveys several key risk management practices to consider in managing CRE loan concentrations in the current challenging economic environment.
Lenders must still consider and verify income, assets, debt, and DTI as part of the underwriting process. Commercial Real Estate Guidance In December 2023, the FDIC released a statement entitled “Managing Commercial Real Estate Concentrations in a Challenging Economic Environment” (the “Updated CRE Guidance”).
Financial Privacy The federal banking regulators have adopted rules limiting the ability of banks and other financial institutions to disclose non-public information about consumers to unaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to an unaffiliated third party.
Our bank received a rating of “Satisfactory” in its most recently completed CRA examination in 2023 that was as of November 19, 2022. Financial Privacy The federal banking regulators have adopted rules limiting the ability of banks and other financial institutions to disclose non-public information about consumers to unaffiliated third parties.
For regulated entities having at least $1 billion in total assets the rules establish general qualitative requirements applicable to all covered entities, which include: (i) prohibiting incentive arrangements that encourage inappropriate risks by providing excessive compensation; (ii) prohibiting incentive arrangements that encourage inappropriate risks that could lead to a material financial loss; (iii) establishing requirements for performance measures to appropriately balance risk and reward; (iv) requiring board of director oversight of incentive arrangements; and (v) mandating appropriate record-keeping.
Under the currently proposed framework, covered institutions would be required to: (i) prohibit incentive arrangements that encourage inappropriate risk‑taking by providing excessive compensation; (ii) prohibit incentive arrangements that could lead to material financial loss; (iii) ensure performance measures appropriately balance risk and reward; (iv) maintain robust board‑level oversight of incentive compensation programs; and (v) implement sound record‑keeping practices.
As an integrated full-service financial institution, approximately 61% of our employees are employed through our banking segment, 36% through our mortgage segment, and 3% for our wealth segment. Meridian is committed to giving back to our communities.
As an integrated full-service financial institution, approximately 62% of our employees are employed through our banking segment, 34% through our mortgage segment, and 4% for our wealth segment. The Bank is listed by the Philadelphia Inquirer in their “Top Work Places of 2025”, and was named to American Bankers 2023 Top 200 Community Banks.
Data that would be required to be made available under the rule would include transaction information, account balance, account and routing numbers, terms and conditions, upcoming bill information, and certain account verification data.
The final rule covered information such as transaction histories, account balances, account and routing numbers, terms and conditions, upcoming bill information, and certain account‑verification data, and was designed to enhance consumer control over financial data and increase competition in financial services.
The Capital Rules require us to maintain an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) 7% CET1 to risk-weighted assets, (ii) 8.5% Tier 1 capital to risk-weighted assets, (iii) 10.5% total capital to risk-weighted assets and (iv) a minimum leverage ratio of 4%.
Institutions must also maintain a 2.5% capital conservation buffer, resulting in effective minimum ratios of 7% CET1, 8.5% Tier 1, and 10.5% Total capital. Mortgage servicing assets, deferred tax assets, and certain other exposures remain subject to CET1 deduction thresholds. These requirements will remain applicable until superseded by the forthcoming Basel III Endgame revisions.
Removed
The Bank was named to American Bankers 2022 Top 200 Community Banks as well as being listed by the Philadelphia Inquirer in their '’Top Work Places of 2022.” In December of 2020, the Bank was named by the ICBA as one of their ‘Best Community Banks to Work For’.
Added
The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively, and our sixth branch is in Center City Philadelphia. In 2025 we opened up our seventh branch in the southwest Florida town of Bonita Springs.
Removed
The banking regulators use a combination of risk-based guidelines and a leverage ratio to evaluate capital adequacy. The risk-based capital guidelines applicable to us are based on capital framework, known as Basel III, as implemented by the federal banking regulators.
Added
Meridian has also been listed by the Baltimore Sun and the News Journal in their respective “Top Workplace in the Region 2025”. Since inception, Meridian has been committed to giving back to worthy organizations and institutions throughout the communities that we serve and live in.
Removed
The risk-based guidelines are intended to make regulatory capital requirements sensitive to differences in credit and market risk profiles among banks and bank holding companies, to account for off-balance sheet exposure and to minimize disincentives for holding liquid assets.
Added
Basel III / U.S. Capital Framework U.S. banking organizations continue to operate under the Basel III regulatory capital regime; however, the framework is undergoing significant revision due to the federal banking agencies’ ongoing “Basel III Endgame” reform process.
Removed
The current Capital Rules also include a capital conservation buffer designed to absorb losses during periods of economic stress. The capital conservation buffer is composed entirely of CET1, on top of these minimum risk-weighted asset ratios.
Added
In July 2025, U.S. regulators reaffirmed plans to implement a revised capital rule that would materially change how credit, market, and operational risks are measured, including reducing reliance on internal models and adopting enhanced standardized approaches.
Removed
The Capital Rules provide for a number of deductions from and adjustments to CET1.
Added
These reforms—initially proposed in 2023—have since been reevaluated after substantial industry feedback, with regulators signaling a more “industry‑friendly” and less punitive capital framework expected to be re‑proposed in early 2026.
Removed
These include, for example, the requirement that mortgage servicing rights, certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.
Added
In August 2025, the Federal Reserve publicly confirmed it is abandoning the prior, more stringent 2023 Basel III Endgame proposal in favor of a new, simplified capital framework designed to reduce unnecessary regulatory burden while maintaining safety and soundness.
Removed
In addition, the Capital Rules provide for a countercyclical capital buffer applicable only to certain covered institutions. We do not expect the countercyclical capital buffer to be applicable to us.
Added
Although final requirements are still forthcoming, these developments reflect active regulatory recalibration that may affect future risk‑based capital ratios, buffer requirements, and the treatment of certain asset classes.
Removed
Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.
Added
Community Bank Leverage Ratio (CBLR) The Bank elected the CBLR framework in 2020. Historically, the CBLR required a leverage ratio greater than 9% for qualifying institutions. In late 2025, however, the federal banking agencies issued coordinated proposals to meaningfully revise the framework.
Removed
In addition, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.
Added
On November 25, 2025, the OCC, Federal Reserve, and FDIC jointly proposed lowering the CBLR threshold from greater than 9% to greater than 8%, as authorized by federal statute.
Removed
Under the Capital Rules, the effects of certain accumulated other comprehensive income items are not excluded; however, non-advanced approaches banking organizations, including the Bank, were able to make a one-time permanent election to continue to exclude these items. The Bank made this election.
Added
The proposed rule would also extend the “grace period” for qualifying institutions that temporarily fall below the required CBLR from two quarters to four quarters, provided the leverage ratio remains above 7%. A parallel Federal Register notice published on December 1, 2025, confirms the same proposed reduction and expanded grace‑period structure.
Removed
The Capital Rules prescribe a new standardized approach for risk weightings that expanded the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0%, for U.S. government and agency securities, to 600%, for certain equity exposures, and resulting in higher risk weights for a variety of asset categories.
Added
Federal Reserve statements issued the same week similarly support reducing the requirement to 8% while preserving a capital level consistent with safe and sound banking. Additional industry commentary indicates that lowering the CBLR threshold is intended to broaden eligibility, reduce regulatory burden, and increase lending capacity for community banks.
Removed
Community banks have long raised concerns with bank regulators about the regulatory burden, complexity, and costs associated with certain provisions of the Basel III Rule. In response, Congress provided an “off-ramp” for institutions, like us, with total consolidated assets of less than $10 billion.
Added
Prompt Corrective Action Framework The FDIC’s Prompt Corrective Action framework, used to classify institutions based on capital levels, remains unchanged. Basel III Endgame discussions have not modified PCA thresholds, and institutions must continue to maintain capital ratios that satisfy the “well‑capitalized” standards to avoid restrictions.
Removed
Section 201 of the Regulatory Relief Act instructed the federal banking regulators to establish a single CBLR of between 8 and 10%.
Added
FICO assessments are expected to end after the bonds mature in 2027, as of December 31, 2025, they are still in effect.
Removed
Under the final rule, a community banking organization is eligible to elect the new framework if it has: less than $10 billion in total consolidated assets, limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9%.
Added
All advances from the FHLB are required to be fully collateralized as determined by the FHLB.
Removed
Prompt Corrective Action Framework The FDIA, requires among other things, that the federal banking agencies take “prompt corrective action” with respect to banks that do not meet minimum capital requirements.
Added
For most loans, the borrower’s total debt-to-income ratio is no longer subject to a strict 43% cap: instead, a loan qualified as a General QM if its annual percentage rate does not exceed the average prime offer rate for a comparable transaction by more than 2.25 percentage points (with 12 higher thresholds for smaller loans).
Removed
In November, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closure of Silicon Valley Bank and Signature Bank, at a quarterly rate of 3.36 basis points of an institution’s uninsured deposits in excess of $5 billion as of December 31, 2022, to be paid over eight quarterly assessment periods beginning in the first quarter of 2024.
Added
This advisory does not create new risk management principles; however, it does update and build upon previously issued guidance.
Removed
Under the final rule, the estimated loss pursuant to the systemic risk determination will be periodically adjusted and the FDIC has retained the ability to cease collection early, extend the special assessment collection period and impose a final shortfall assessment on a one time basis.
Added
In October 2023, the Federal Reserve, FDIC, and OCC issued a final rule modernizing CRA regulations.

… 20 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+2 added−4 removed157 unchanged
Biggest changeIn further reassessment of inflation and other factors, the Federal Reserve decreased the range three times in late 2024. As of December 31, 2024, the target range for the federal funds rate had been decreased to 4.25% from 4.50% at September 30, 2024.
Biggest changeThe Federal Reserve then increased the target range eleven times throughout 2022 to July 2023. In further reassessment of inflation and other factors, the Federal Reserve decreased the range three times in late 2024, and a further three times during 2025.
Our stock price may fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated variations in our quarterly results of operations; • the failure of securities analysts to cover, or continue to cover, us after this offering; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns and other issues in the financial services industry; • perceptions in the marketplace regarding us, our competitors or other financial institutions; • future sales of our common stock; • departure of our management team or other key personnel; • new technology used, or services offered, by competitors; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; 23 • changes or proposed changes in laws or regulations, or differing interpretations thereof affecting our business, or enforcement of these laws and regulations; • litigation and governmental investigations; and • geopolitical conditions such as acts or threats of terrorism or military conflicts.
Our stock price may fluctuate significantly in response to a variety of factors including, among other things: • actual or anticipated variations in our quarterly results of operations; • the failure of securities analysts to cover, or continue to cover, us after this offering; • operating and stock price performance of other companies that investors deem comparable to us; • news reports relating to trends, concerns and other issues in the financial services industry; • perceptions in the marketplace regarding us, our competitors or other financial institutions; • future sales of our common stock; • departure of our management team or other key personnel; 23 • new technology used, or services offered, by competitors; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; • changes or proposed changes in laws or regulations, or differing interpretations thereof affecting our business, or enforcement of these laws and regulations; • litigation and governmental investigations; and • geopolitical conditions such as acts or threats of terrorism or military conflicts.
Although management believes it has implemented effective asset and liability management strategies, including the use of derivatives as hedging instruments, to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations, and any related economic downturn, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.
Although management believes it has implemented effective asset and liability management strategies, including the use of derivatives as hedging instruments, to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations, and any related economic downturn, especially domestically and in the regions in which we operate, may adversely affect 19 our asset quality, deposit levels, loan demand and results of operations.
In addition, increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our customers and underlying transactions, as well as the technology used by our customers to access our systems.
In addition, increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our customers and underlying transactions, as well as the technology used 17 by our customers to access our systems.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition or results of operations and could be dilutive to both tangible book value and our share price. 16 We may not be able to implement our growth strategy or manage costs effectively, resulting in lower earnings or profitability.
An inability to raise additional capital on acceptable terms when needed could have a material adverse effect on our business, financial condition or results of operations and could be dilutive to both tangible book value and our share price. We may not be able to implement our growth strategy or manage costs effectively, resulting in lower earnings or profitability.
Larger institutions have greater resources and access to capital markets, with higher lending limits, more advanced technology and broader suites of services. Competition at times requires increases in deposit rates and decreases in loan rates, and may adversely impact our net interest margin. 18 Our ability to maintain, attract and retain customer relationships is highly dependent on our reputation.
Larger institutions have greater resources and access to capital markets, with higher lending limits, more advanced technology and broader suites of services. Competition at times requires increases in deposit rates and decreases in loan rates, and may adversely impact our net interest margin. Our ability to maintain, attract and retain customer relationships is highly dependent on our reputation.
Further, to the extent that any of the information in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors 14 below are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. See “Cautionary Note Regarding Forward-Looking Statements”.
Further, to the extent that any of the information in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors below are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. See “Cautionary Note Regarding Forward-Looking Statements”.
Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have a material adverse effect on our business, financial condition or results of operations. We operate in a highly competitive and changing industry and market area and compete with both banks and non-banks.
Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have a material adverse effect on our business, financial condition or results of operations. 18 We operate in a highly competitive and changing industry and market area and compete with both banks and non-banks.
Commercial real estate markets were particularly impacted by the economic disruption resulting from the COVID-19 pandemic which was a catalyst for the evolution of various remote work options which may still have an impact the long-term performance of some types of office properties within our commercial real estate portfolio.
Commercial real estate markets were particularly impacted by the economic disruption resulting from the COVID-19 pandemic which was a catalyst for the evolution of various remote work options which may still have an impact on the long-term performance of some types of office properties within our commercial real estate portfolio.
Accordingly, we are subject to mark-to-market risk and the application of fair value accounting may cause our earnings and AOCI to be more volatile than would be suggested by our underlying performance. Our small business customers may lack the resources to weather a downturn in the economy.
Accordingly, we are subject to mark-to-market risk and the application of fair value accounting may cause our earnings and AOCI to be more volatile than would be suggested by our underlying performance. 15 Our small business customers may lack the resources to weather a downturn in the economy.
Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet. 19 The impact of interest rates on our mortgage banking business can have a significant impact on revenues.
Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet. The impact of interest rates on our mortgage banking business can have a significant impact on revenues.
The loss of customer deposits for any reason could increase our funding costs. We may need to raise additional capital in the future, and such capital may not be available when needed or at all.
The loss of customer deposits for any reason could increase our funding costs. 16 We may need to raise additional capital in the future, and such capital may not be available when needed or at all.
Regulatory changes have imposed and may continue to impose additional costs, which could adversely impact our profitability. 22 We may not be able to attract and retain wealth management clients. Due to strong competition, our wealth management business may not be able to attract and retain clients.
Regulatory changes have imposed and may continue to impose additional costs, which could adversely impact our profitability. We may not be able to attract and retain wealth management clients. Due to strong competition, our wealth management business may not be able to attract and retain clients.
Whole loan sale agreements require that we repurchase or substitute mortgage loans, or indemnify buyers against losses, in the event we breach these 21 representations or warranties.
Whole loan sale agreements require that we repurchase or substitute mortgage loans, or indemnify buyers against losses, in the event we breach these representations or warranties.
Our business and operations, which primarily consist of banking and wealth management activities, including lending money to customers in the form of loans and borrowing money from customers in the form of deposits, are sensitive to general business and economic conditions in the United States generally, and in our local markets in particular.
Our business and operations, which primarily consist of commercial banking, mortgage banking, and wealth management activities, including lending money to customers in the form of loans and borrowing money from customers in the form of deposits, are sensitive to general business and economic conditions in the United States generally, and in our local markets in particular.
Deterioration in the credit quality of third parties whose securities or obligations we hold, including the FHLMC, GNMA and municipalities, could result in significant losses. Our mortgage lending business may not provide us with significant non-interest income.
Deterioration in the credit quality of third parties whose securities or obligations we hold, including the FHLMC, GNMA and municipalities, could result in significant losses. Our mortgage banking business may not provide us with significant non-interest income.
Our allowance for credit losses may be insufficient, and an increase in the allowance would reduce earnings. ASU 2016-13 (Topic 326 - Credit Losses), commonly referenced as CECL, became effective for us on January 1, 2023.
Our allowance for credit losses may be insufficient, and an increase in the allowance would reduce earnings. ASU 2016-13 (Topic 326 - Credit Losses), commonly referenced as CECL, became effective for the Corporation on January 1, 2023.
The CECL framework may result in greater volatility in the level of the allowance for credit losses, depending on various factors and assumptions applied in the model, such as the reasonable and supportable forecasted economic conditions and loan payment behaviors.
The CECL framework can result in greater volatility in the level of the allowance for credit losses, depending on various factors and assumptions applied in the model, such as the reasonable and supportable forecasted economic conditions and loan payment behaviors.
Loss of deposits could increase our funding costs. As do many banking institutions, we rely on customer deposits to meet a considerable portion of our funding needs, and we continue to seek customer deposits to maintain this funding base. We accept deposits directly from consumer and commercial customers and, as of December 31, 2024, we had $2.0 billion in deposits.
Loss of deposits could increase our funding costs. As do many banking institutions, we rely on customer deposits to meet a considerable portion of our funding needs, and we continue to seek customer deposits to maintain this funding base. We accept deposits directly from consumer and commercial customers and, as of December 31, 2025, we had $2.2 billion in deposits.
The imposition of any such penalties or orders could have a material adverse effect on the wealth management segment's operating results and financial condition. The wealth management business also may be adversely affected as a result of new or revised legislation or regulations.
The imposition of any such penalties or orders could have a material adverse effect on the wealth management segment's operating 22 results and financial condition. The wealth management segment also may be adversely affected as a result of new or revised legislation or regulations.
As a result of inflationary pressures and the resulting rapid increases in interest rates in 2023 and early 2024, the trading value of previously issued government and other fixed income securities has declined significantly.
As a result of inflationary pressures and the resulting rapid increases in interest rates in 2023 and 2024, the trading value of previously issued government and other fixed income securities had declined significantly.
The residential mortgage business is highly competitive, and highly susceptible to changes in market interest rates, consumer confidence levels, employment statistics, the capacity and willingness of secondary market purchasers to acquire and hold or securitize loans, and other factors beyond our control.
The residential mortgage business is highly competitive, and highly susceptible to changes in market interest rates, consumer confidence levels, employment statistics, availability of homes for sale, the capacity and willingness of secondary market purchasers to acquire and hold or securitize loans, and other factors beyond our control.
An acquisition could require us to use a substantial amount of cash, other liquid assets, and/or incur debt. 15 Our acquisition activities could involve a number of additional risks, including the risks of: • Incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions; • Using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to the target institution or its assets; • The time and expense required to integrate the operations and personnel of the combined businesses; • Creating an adverse short-term effect on our results of operations; • Failing to realize related revenue synergies and/or cost savings within expected time frames; and • Losing key employees and customers or a reduction in our stock price as a result of an acquisition that is integrated poorly.
Our acquisition activities could involve a number of additional risks, including the risks of: • Incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions; • Using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to the target institution or its assets; • The time and expense required to integrate the operations and personnel of the combined businesses; • Creating an adverse short-term effect on our results of operations; • Failing to realize related revenue synergies and/or cost savings within expected time frames; and • Losing key employees and customers or a reduction in our stock price as a result of an acquisition that is integrated poorly.
Risks Related our Wealth Management Business Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned. The majority of the revenue from the wealth management business consists of investment advisory. Substantial revenues are generated from investment advisory contracts with clients.
Risks Related to our Wealth Management Business Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned. The majority of the revenue from the wealth management business is generated from investment advisory contracts with clients.
As of December 31, 2024, we owned $208.1 million of investment securities, which consisted primarily of our positions in U.S. government and government-sponsored enterprises and federal agency obligations, mortgage and asset-backed securities, corporate bonds, and municipal securities.
As of December 31, 2025, we owned $226 million of investment securities, which consisted primarily of our positions in U.S. government and government-sponsored enterprises and federal agency obligations, mortgage and asset-backed securities, corporate bonds, and municipal securities.
We generally sell the guaranteed portion of our SBA 7(a) program loans in the secondary market. These sales have resulted in premium income for us at the time of sale and created a stream of future servicing income. We may not be able to continue originating these loans or selling them in the secondary market.
We may sell the guaranteed portion of our SBA 7(a) program loans in the secondary market. These sales have resulted in premium income for us at the time of sale. We may not be able to continue originating these loans or selling them in the secondary market.
More generally, publicized information concerning security and cyber-related problems could inhibit the use or growth of electronic or web-based applications or solutions as a means of conducting commercial transactions. Such publicity may also cause damage to our reputation as a financial institution.
More generally, publicized information concerning security and cyber-related problems could inhibit the use or growth of electronic or web-based applications or solutions as a means of conducting commercial transactions. Such publicity may also cause damage to our reputation as a financial institution. As a result, our business, financial condition or results of operations could be adversely affected.
When mortgage loans are sold, whether as whole loans or pursuant to a securitization, we are required to make customary representations and warranties to purchasers, guarantors and insurers, including the GSEs, about the mortgage loans and the manner in which they were originated.
We sell substantially all of the mortgage loans held for sale that we originated. When mortgage loans are sold, whether as whole loans or pursuant to a securitization, we are required to make customary representations and warranties to purchasers, guarantors and insurers, including the GSEs, about the mortgage loans and the manner in which they were originated.
The Corporation conducts a periodic review of the securities portfolio to determine if any decline in the estimated fair value of any security below its cost basis is considered impaired.
And while interest rates have moderated in 2025, the Corporation conducts a periodic review of the securities portfolio to determine if any decline in the estimated fair value of any security below its cost basis is considered impaired.
We are dependent for the majority of our technology, including our core operating system, on third-party providers. If these companies were to discontinue providing services to us, we may experience significant disruption to our business. In addition, each of these third parties faces the risk of cyber attack, information breach or loss, or technology failure.
If these companies were to discontinue providing services to us, we may experience significant disruption to our business. In addition, each of these third parties faces the risk of cyber attack, information breach or loss, or technology failure.
As of December 31, 2024, our real estate loans, excluding mortgages held for sale, included $824.0 million of CRE loans (40.0% of total portfolio loans), $259.6 million of construction and development loans (12.6% of total portfolio loans), and for consumer loans, $252.6 million of residential mortgage loans, and $90.7 million of home equity loans (16.7% of total portfolio loans), with the majority of these real estate loans concentrated in the southeast Pennsylvania, Delaware, Maryland, southern New Jersey, and to a lesser degree in southwest Florida.
As of December 31, 2025, our real estate loans, excluding mortgages held for sale, included $879.4 million of CRE loans (39.9% of total portfolio loans), $330.5 million of construction and development loans (15.0% of total portfolio loans), and for consumer loans, $236.1 million of residential mortgage loans, and $107.0 million of home equity loans (15.6% of total portfolio loans), with the majority of these real estate loans concentrated in the southeast Pennsylvania, Delaware, Maryland, southern New Jersey, and to a lesser degree in southwest Florida.
A large claim against the Bank under these laws or an enforcement action by our regulators could have a material adverse effect on our financial condition and results of operations.
The Bank's activities are also regulated under consumer protection laws applicable to our lending, deposit, and other activities. A large claim against the Bank under these laws or an enforcement action by our regulators could have a material adverse effect on our financial condition and results of operations.
Our acquisition activities could be material to us. For example, we could issue additional shares of common stock in a merger transaction, which could dilute current shareholders' ownership interest.
Our acquisition activities could be material to us. For example, we could issue additional shares of common stock in a merger transaction, which could dilute current shareholders' ownership interest. An acquisition could require us to use a substantial amount of cash, other liquid assets, and/or incur debt.
Any increases in provisions will result in a decrease in net income and capital and may have a material adverse effect on our financial condition and results of operations. 20 Our business, profitability and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, third parties who owe us money, securities or other assets or whose securities or obligations we hold.
Our business, profitability and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, third parties who owe us money, securities or other assets or whose securities or obligations we hold.
Under CECL, credit losses are measured based on past events, current conditions and reasonable and supportable forecasts of future conditions that affect the collectability of financial assets. The change to the CECL framework required us to greatly increase the data we collect and review to determine the appropriate level of the allowance for credit losses.
Under CECL, credit losses are measured based on past events, current conditions and reasonable and supportable forecasts of future conditions that affect the collectability of financial assets.
Risks Related to Regulation Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.
Risks Related to Regulation Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations. We are subject to extensive regulation, supervision, and examination by our primary regulators, the Pennsylvania Department of Banking and Securities and federal regulators of the FDIC and the FRB.
As a result, our business, financial condition or results of operations could be adversely affected. 17 We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition.
We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition. We are dependent for the majority of our technology, including our core operating system, on third-party providers.
The values of these servicing rights are heavily dependent on market interest rates and tends to increase with rising interest rates and decrease with falling interest rates. If we are required to record an impairment charge, it would adversely affect our financial condition and results of operations.
The values of these servicing rights are heavily dependent on market interest rates and tends to increase with rising interest rates and decrease with falling interest rates.
Our interest rate spread, net interest margin and net interest income improved during this period as our interest-bearing liabilities repriced at a faster pace than interest-earning assets.
As of December 31, 2025, the target range for the federal funds rate had been decreased to 3.50% from 3.75%. Our interest rate spread, net interest margin and net interest income improved during this period as our interest-bearing liabilities repriced at a faster pace than interest-earning assets.
We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition. We sell substantially all of the mortgage loans held for sale that we originated.
If we are required to record an impairment charge, it would adversely affect our financial condition and results of operations. 21 We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition.
Regulation by these agencies is intended primarily for the protection of our depositors and the deposit insurance fund and not for the benefit of our shareholders. The Bank's activities are also regulated under consumer protection laws applicable to our lending, deposit, and other activities.
Also, as a member of the FHLB, the Bank must comply with applicable regulations of the FHFA and the FHLB. Regulation by these agencies is intended primarily for the protection of our depositors and the deposit insurance fund and not for the benefit of our shareholders.
If economic conditions in the United States or any of our local markets weaken, our growth and profitability from our operations could be constrained. The current economic environment is characterized by interest rates near historically high levels, which impacts our ability to attract deposits and to generate attractive earnings through our loan and investment portfolios.
If economic conditions in the United States or any of our local markets weaken, our growth and profitability from our operations could be constrained.
Removed
In response to the economic conditions resulting from the COVID-19 pandemic, the Federal Reserve's target federal funds rate was reduced nearly to 0% and the yields on Treasury notes declined to historic lows.
Added
The current economic environment is characterized by interest rates at a moderate level after 3 rate cuts by the Fed during 2025, which impacts our ability to attract deposits and to generate attractive earnings through our loan and investment portfolios.
Removed
However, due to elevated levels of inflation and corresponding pressure to raise interest rates, the Federal Reserve announced in January of 2022 that it would be slowing the pace of its bond purchasing and increasing the target range for the federal funds rate over time. The Federal Reserve then increased the target range eleven times throughout 2022 to July 2023.
Added
Any increases in provisions will 20 result in a decrease in net income and capital and may have a material adverse effect on our financial condition and results of operations.
Removed
This standard replaced the approach under GAAP for establishing allowances for loan and lease losses (the “Allowance”), which generally considered only past events and current conditions, with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, starting when such assets are first originated or acquired.
Removed
We are subject to extensive regulation, supervision, and examination by our primary regulators, the Pennsylvania Department of Banking and Securities and federal regulators of the FDIC and Federal Reserve Bank of Philadelphia. Also, as a member of the FHLB, the Bank must comply with applicable regulations of the Federal Housing Finance Agency and the FHLB.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−0 removed14 unchanged
Biggest changeOur Internal Audit team conducts an annual review of third-party hosted applications with a specific focus on any sensitive data shared with third parties. The internal business owners of the hosted applications are required to document user access reviews at least annually and provide from the vendor a System and Organization Controls (SOC) 1 or SOC 2 report.
Biggest changeThe internal business owners of the hosted applications are required to document user access reviews at least annually and provide from the vendor a System and Organization Controls (SOC) 1 or SOC 2 report.
If a third-party vendor is not able 24 to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. Our assessment of risks associated with use of third-party providers is part of our overall cybersecurity risk management framework.
If a third-party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. Our assessment of risks associated with use of third-party providers is part of our overall cybersecurity risk management framework.
The Corporation’s Information Security Officer is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Board. Our Information Security Officer has over a decade of experience leading cyber security oversight, and others on our IT security team have cybersecurity experience or certifications.
The Corporation’s Information Security Officer is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Board. Our Information Security Officer has over a decade of experience in cyber security, and others on our IT security team have cybersecurity experience or certifications.
These tests and assessments are useful tools for maintaining a robust cybersecurity program to protect our investors, customers, employees, vendors, and intellectual property. In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with use of third-party service providers.
These tests and assessments are useful tools for maintaining a robust cybersecurity program to protect our investors, customers, employees, vendors, and intellectual property.
Added
In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with use of third-party service providers. 24 Our Internal Audit team conducts an annual review of third-party hosted applications with a specific focus on any sensitive data shared with third parties.

Item 2. Properties

Properties — owned and leased real estate

6 edited+2 added−0 removed0 unchanged
Biggest changeTamiami Trail, Suite 3, Bonita Springs, FL 34134 • Commercial Loan / Mortgage Loan Production Office – 8894 Stanford Boulevard, Suite 203, Columbia, MD 21045 • Mortgage Loan Production Office – 5301 Limestone Road, Suite 202, Wilmington, DE 19801 • Mortgage Loan Production Office – 22128 Sussex Highway, Seaford, DE 19973 • Mortgage Loan Production Office – 350 Highland Drive, Suite 160, Mountville, PA 17554 • Mortgage Loan Production Office – 2330 New Road, Northfield, NJ 08225 • Mortgage Loan Production Office – 1221 College Park Drive, Suite 118, Dover, DE 19904 • Mortgage Loan Production Office – 110 West Road, Towson, MD 21204 • Mortgage Loan Production Office – 8894 Stanford Boulevard, Suite 201, Columbia, MD 21045 • Mortgage Loan Production Office – 4940 Campbell Blvd., Baltimore, MD 21236 Item 3.
Biggest changeGermantown Pike, Suite 201, East Norriton, PA 19401 • Mortgage Loan Production Office – 350 Highland Drive, Suite 160, Mountville, PA 17554 • Mortgage Loan Production Office – 2330 New Road, Northfield, NJ 08225 • Mortgage Loan Production Office – 110 West Road, Suite 500, Towson, MD 21204 • Mortgage Loan Production Office – 8894 Stanford Boulevard, Suite 203, Columbia, MD 21045 Item 3.
Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. PART II
Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. 25 PART II
Item 2. Properties The Corporation is headquartered in Malvern, Pennsylvania and has six full-service branches. Its main branch, in Paoli, serves the Main Line. The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively.
Item 2. Properties The Corporation is headquartered in Malvern, PA and has seven full-service branches. Its main branch, in Wayne, serves the Main Line. The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively, and a branch serving Center City Philadelphia.
Branch locations: • Wayne Branch – 220 W Lancaster Avenue, Wayne, PA 19087 • West Chester Branch – 16 W. Market Street, West Chester, PA 19382 • Media Branch – 100 E. State Street, Media, PA 19063 • Doylestown Branch – 1719A S.
The Bank had a net book value of $10.7 million for all locations at December 31, 2025. Branch locations: • Wayne Branch – 220 W Lancaster Avenue, Wayne, PA 19087 • West Chester Branch – 16 W. Market Street, West Chester, PA 19382 • Media Branch – 100 E. State Street, Media, PA 19063 • Doylestown Branch – 1719A S.
In addition to our deposit taking branches, there are currently 12 other offices, including headquarters for Corporate and Operations, the Wealth Division and the Mortgage Division. Other than our corporate and operations headquarters, all of our offices are leased. The Bank had a net book value of $10.1 million for all locations at December 31, 2024.
Our seventh, and newest branch, is located in the southwest Florida town of Bonita Springs. In addition to our deposit taking branches, there are currently 10 other offices, including headquarters for Corporate and Operations, the Wealth Division and the Mortgage Division. Other than our corporate and operations headquarters, all of our offices are leased.
Easton Road, Doylestown, PA 18901 • Blue Bell Branch – 653 Skippack Pike, Ste. 116, Blue Bell, PA 19422 • Philadelphia Branch – 1760 Market Street, Philadelphia, PA 19103 Other offices: • Corporate Headquarters – 9 Old Lincoln Highway, Malvern, PA 19355 • Mortgage Headquarters – 653 Skippack Pike, Suite 200, Blue Bell, PA 19462 • Operations Headquarters – 367 Eagleview Boulevard, Exton, PA 19341 • Meridian Wealth Office – 653 Skippack Pike, Suite 200, Blue Bell, PA 19462 • SBA Lending Group Office -1760 Market Street, Philadelphia, PA 19103 • Commercial Loan Office – 24860 S.
Easton Road, Doylestown, PA 18901 • Blue Bell Branch – 653 Skippack Pike, Ste. 116, Blue Bell, PA 19422 • Philadelphia Branch – 1760 Market Street, Philadelphia, PA 19103 • Bonita Springs Branch - 12611 Bonita Beach Rd SE, Suite 1, Bonita Springs, FL 34135 Other offices: • Corporate Headquarters – 9 Old Lincoln Highway, Malvern, PA 19355 • Mortgage Headquarters – 301 E.
Added
Germantown Pike, Suite 201, East Norriton, PA 19401 • Operations Headquarters – 367 Eagleview Boulevard, Exton, PA 19341 • Meridian Wealth Office – 301 E.
Added
Germantown Pike, Suite 201, East Norriton, PA 19401 • SBA Lending Group Office -1760 Market Street, Suite 704, Philadelphia, PA 19103 • Commercial Loan Office – 3450 Lakeside Drive, Suite 350, Miramar, FL 33027 • Commercial Loan / Mortgage Loan Production Office – 8894 Stanford Boulevard, Suite 203, Columbia, MD 21045 • Mortgage Loan Production Office – 5301 Limestone Road, Suite 202, Wilmington, DE 19801 • Mortgage Loan Production Office – 22128 Sussex Highway, Seaford, DE 19973 • Mortgage Loan Production Office - 301 E.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+3 added−1 removed1 unchanged
Biggest changeDuring 2024, and 2023, the Board of Directors paid cash dividends as follows: Date Declared Date of Record Date Paid Quarterly Dividend $ January 26, 2023 February 14, 2023 February 21, 2023 $0.125 April 27, 2023 May 15, 2023 May 22, 2023 0.125 July 27, 2023 August 14, 2023 August 21 2023 0.125 October 26, 2023 November 13, 2023 November 20, 2023 0.125 January 26, 2024 February 12, 2024 February 20, 2024 0.125 April 25. 2024 May 13, 2024 May 20, 2024 0.125 July 25, 2024 August 12, 2024 August 19, 2024 0.125 October 22, 2024 November 12, 2024 November 19, 2024 0.125 Item 6.
Biggest changeDuring 2025, and 2024, the Board of Directors paid cash dividends as follows: Date Declared Date of Record Date Paid Quarterly Dividend $ January 26, 2024 February 12, 2024 February 20, 2024 $0.125 April 25. 2024 May 13, 2024 May 20, 2024 0.125 July 25, 2024 August 12, 2024 August 19, 2024 0.125 October 22, 2024 November 12, 2024 November 19, 2024 0.125 January 23, 2025 February 10, 2025 February 18, 2025 0.125 April 24, 2025 May 12, 2025 May 19, 2025 0.125 July 24, 2025 August 11, 2025 August 18, 2025 0.125 October 23, 2025 November 10, 2025 November 17, 2025 0.125 On January 29, 2026, the Board of Directors declared a quarterly cash dividend of $0.14 per common share, payable February 17, 2026 to shareholders of record as of February 9, 2026.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shares of our common stock trade on the NASDAQ Global Select Market under the symbol "MRBK". As of March 10, 2025, there were approximately 1,898 registered shareholders of the Corporation's common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shares of our common stock trade on the NASDAQ Global Select Market under the symbol "MRBK". As of March 9, 2026, there were approximately 5,269 registered shareholders of the Corporation's common stock.
We did not repurchase any shares of the Corporation during 2024. Dividend Policy In 2020 the Corporation commenced quarterly cash dividends on its common stock. Future dividend payments will depend upon maintenance of a strong financial condition, future earnings and capital and regulatory requirements.
The total amount of stock repurchased under the plan was $19.6 million. The Corporation has not repurchased any shares since the plan expired. Dividend Policy In 2020 the Corporation commenced quarterly cash dividends on its common stock. Future dividend payments will depend upon maintenance of a strong financial condition, future earnings and capital and regulatory requirements.
Certain shares are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. 25 Share Repurchases On August 30, 2021, the Corporation announced a stock repurchase plan which allowed the Corporation to repurchase up to $20 million of the company’s outstanding common stock, par value $1.00 per share.
Certain shares are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. On February 20, 2025 the Corporation entered into an Equity Distribution Agreement (or Sales Agreement) relating to shares of our common stock.
Removed
Stock was purchased under the plan from time to time in the open market or through privately negotiated transactions, or otherwise, at the discretion of management of the company in accordance with legal requirements. On April 22, 2023, the stock repurchase plan expired. The total amount of stock repurchased under the plan was $19.6 million in total.
Added
During 2025 the Corporation sold a total of 488,478 shares of common stock and raised approximately $7.5 million in net proceeds.
Added
We expect to use the net proceeds for general corporate purposes, which includes working capital and the funding of organic growth at Meridian Bank, as described in our prospectus filed with the SEC on February 20, 2025 pursuant to Rule 424(b)(5) under the Securities Act. Share Repurchases The Corporation had a stock repurchase plan that expired in 2023.
Added
This is an increase of $0.015 or 12%, compared to the quarterly cash dividend of $0.125 per common share declared in the prior quarter. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+26 added−13 removed28 unchanged
Biggest changeThe following table presents our loan and lease portfolio at the dates indicated: (Dollars in thousands) December 31, 2024 December 31, 2023 $ Change % Change Mortgage loans held for sale $ 32,413 $ 24,816 $ 7,597 30.6 % Real estate loans: Commercial mortgage 823,976 737,863 86,113 11.7 % Home equity lines and loans 90,721 76,287 14,434 18.9 % Residential mortgage 252,565 260,604 (8,039) (3.1) % Construction 259,553 246,440 13,113 5.3 % Total real estate loans 1,426,815 1,321,194 105,621 8.0 % Commercial and industrial 367,366 302,891 64,475 21.3 % Small business loans 155,775 142,342 13,433 9.4 % Consumer 349 389 (40) (10.3) % Leases, net 75,987 121,632 (45,645) (37.5) % Total portfolio loans and leases $ 2,026,292 $ 1,888,448 $ 137,844 7.3 % Total loans and leases $ 2,058,705 $ 1,913,264 $ 145,441 7.6 % Portfolio loans increased $137.8 million, or 7.3% to $2.0 billion as of December 31, 2024, from $1.9 billion as of December 31, 2023. 31 The following table shows the amounts of loans outstanding as of December 31, 2024 which, based on remaining scheduled repayments of principal, are due in the periods indicated: (dollars in thousands) 12 months or Less 1 - 5 years 5 - 15 years After 15 years Total Commercial mortgage $ 45,409 $ 276,118 $ 495,729 $ 6,720 $ 823,976 Home equity lines and loans 2,154 2,653 83,262 2,652 90,721 Residential mortgage 233 1,548 1,205 249,579 252,565 Construction 113,579 80,495 64,551 928 259,553 Commercial and industrial 88,337 105,376 56,984 116,669 367,366 Small business loans 506 10,519 95,103 49,647 155,775 Consumer 18 95 236 — 349 Leases, net 3,290 72,277 420 — 75,987 Total portfolio loans and leases $ 253,526 $ 549,081 $ 797,490 $ 426,195 $ 2,026,292 The amounts have been classified according to sensitivity to changes in interest rates for amounts due after one year, as of December 31, 2024.
Biggest changeThe following table presents our loans and other finance receivables portfolio at the dates indicated: (Dollars in thousands) December 31, 2025 December 31, 2024 $ Change % Change Mortgage loans held for sale $ 33,762 $ 32,413 $ 1,349 4.2 % Real estate loans: Commercial mortgage 879,440 823,976 55,464 6.7 % Home equity lines and loans 107,002 90,721 16,281 17.9 % Residential mortgage 236,135 252,565 (16,430) (6.5) % Construction 330,543 259,553 70,990 27.4 % Total real estate loans 1,553,120 1,426,815 126,305 8.9 % Commercial, industrial & other finance receivables 428,981 367,366 61,615 16.8 % Small business loans 139,765 155,775 (16,010) (10.3) % Consumer 329 349 (20) (5.7) % Leases, net 45,489 75,987 (30,498) (40.1) % Loans and other finance receivables $ 2,167,684 $ 2,026,292 $ 141,392 7.0 % Total loans and other finance receivables $ 2,201,446 $ 2,058,705 $ 142,741 6.9 % Portfolio loans increased $141.4 million, or 7.0% to $2.2 billion as of December 31, 2025, from $2.0 billion as of December 31, 2024. 31 The following table shows the amounts of loans and other finance receivables outstanding as of December 31, 2025 which, based on remaining scheduled repayments of principal, are due in the periods indicated: (dollars in thousands) 12 months or Less 1 - 5 years 5 - 15 years After 15 years Total Commercial mortgage $ 66,313 $ 333,463 $ 475,815 $ 3,849 $ 879,440 Home equity lines and loans 1,995 2,909 99,546 2,552 107,002 Residential mortgage 229 1,895 1,245 232,766 236,135 Construction 137,048 100,366 91,886 1,243 330,543 Commercial, industrial & other finance receivables 58,321 144,833 76,162 149,665 428,981 Small business loans 432 11,368 86,583 41,382 139,765 Consumer 17 92 216 4 329 Leases, net 5,235 39,084 1,170 — 45,489 Loans and other finance receivables $ 269,590 $ 634,010 $ 832,623 $ 431,461 $ 2,167,684 The amounts have been classified according to sensitivity to changes in interest rates as of December 31, 2025.
The evaluation process combines several factors: historical loan loss experience, managements ongoing review of lending policies and practices, experience and depth of staff, quality of the loan grading system, the fair value of underlying collateral, concentration of loans to specific borrowers or industries, existing 26 economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.
The evaluation process combines several factors: historical loan loss experience, managements ongoing review of lending policies and practices, experience and depth of staff, quality of the loan grading system, the fair value of underlying collateral, concentration of loans to specific borrowers or industries, existing economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.
These estimates, assumptions and judgements are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements.
These estimates, assumptions and judgments are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements.
Capital Resources Meridian meets the definition of “well capitalized” for regulatory purposes on December 31, 2024. Our capital category is determined for the purposes of applying the bank regulators’ “prompt corrective action” regulations and for determining levels of deposit insurance assessments and may not constitute an accurate representation of Meridian’s overall financial condition or prospects.
Capital Resources Meridian meets the definition of “well capitalized” for regulatory purposes on December 31, 2025. Our capital category is determined for the purposes of applying the bank regulators’ “prompt corrective action” regulations and for determining levels of deposit insurance assessments and may not constitute an accurate representation of Meridian’s overall financial condition or prospects.
Executive Overview The following items highlight the Corporation’s changes in its financial condition as of December 31, 2024 compared to December 31, 2023 and the results of operations for the year ended December 31, 2024 compared to the same period in 2023. More detailed information related to these highlights can be found in the sections that follow.
Executive Overview The following items highlight the Corporation’s changes in its financial condition as of December 31, 2025 compared to December 31, 2024 and the results of operations for the year ended December 31, 2025 compared to the same period in 2024. More detailed information related to these highlights can be found in the sections that follow.
The information contained in this section should be read together with the December 31, 2024 audited Consolidated Financial Statements and the accompanying Notes included in Item 8. Financial Statements And Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
The information contained in this section should be read together with the December 31, 2025 audited Consolidated Financial Statements and the accompanying Notes included in Item 8. Financial Statements And Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgements inherent in that policy, is critical in understanding our financial statements. Management has presented the application of this policy to the audit committee of our board of directors.
In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgments inherent in that policy, is critical in understanding our financial statements. Management has presented the application of this policy to the audit committee of our board of directors.
See “Non-GAAP Financial Measures” below for Non-GAAP to GAAP reconciliation. 27 Components of Net Income Net income is comprised of five major elements: • Net Interest Income , or the difference between the interest income earned on loans, leases and investments and the interest expense paid on deposits and borrowed funds; • Provision For Credit Losses , or the amount added to the Allowance to provide for current expected credit losses on portfolio loans and leases; • Non-interest Income, which is made up primarily of mortgage banking income, wealth management income, SBA loan sale income, fair value adjustments, gains and losses from the sale of loans, gains and losses from the sale of investment securities available for sale and other fees from loan and deposit services; • Non-interest Expense , which consists primarily of salaries and employee benefits, occupancy, professional fees, advertising & promotion, data processing, information technology, loan expenses, and other operating expenses; and • Income Taxes , which include state and federal jurisdictions.
See “Non-GAAP Financial Measures” below for Non-GAAP to GAAP reconciliation. 27 Components of Net Income Net income is comprised of five major elements: • Net Interest Income , or the difference between the interest income earned on loans, leases and investments and the interest expense paid on deposits and borrowed funds; • Provision For Credit Losses , or the amount added to the ACL to provide for current expected credit losses on portfolio loans and leases; • Non-interest Income, which is made up primarily of mortgage banking income, wealth management income, SBA loan sale income, fair value adjustments, gains and losses from the sale of loans, gains and losses from the sale of investment securities available for sale and other fees from loan and deposit services; • Non-interest Expense , which consists primarily of salaries and employee benefits, occupancy, professional fees, advertising & promotion, data processing & software, loan expenses, and other operating expenses; and • Income Taxes , which include state and federal jurisdictions.
NET INTEREST INCOME Net interest income is an integral source of the Corporation’s income. The tables below present a summary for the years ended December 31, 2024 and 2023, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities.
NET INTEREST INCOME Net interest income is an integral source of the Corporation’s income. The tables below present a summary for the years ended December 31, 2025 and 2024, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to assist in understanding the financial condition and results of operations of Meridian as of and for the year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to assist in understanding the financial condition and results of operations of Meridian as of and for the year ended December 31, 2025.
Our owner-occupied commercial real estate loans are originated and managed within our commercial loan department and amounted to $335 million at December 31, 2024.
Our owner-occupied commercial real estate loans are originated and managed within our commercial loan department and amounted to $335 million at December 31, 2025.
Management believes that the majority of such deposits will be reinvested with Meridian and that certificates that are not renewed will be funded by a reduction in cash and cash equivalents or by pay-downs and maturities of loans and investments. At December 31, 2024, Meridian had a reserve for unfunded loan commitments of $817 thousand.
Management believes that the majority of such deposits will be reinvested with Meridian and that certificates that are not renewed will be funded by a reduction in cash and cash equivalents or by pay-downs and maturities of loans and investments. At December 31, 2025, Meridian had a reserve for unfunded loan commitments of $976 thousand.
The remaining commercial real estate loans are managed by our commercial real estate department which offer the following commercial real estate products: • Permanent – Investor Real Estate Loans • Purchase and refinance loan opportunities for a number of product types, including single-family rentals, multi-family residential as well as tenanted income producing properties in a variety of real estate types, including office, retail, industrial, and flex space • Construction Loans • Residential construction loans to finance new construction and renovation of single and 1-4 family homes located within our market area • Commercial construction loans for investment properties, generally with semi-permanent attributes • Construction loans for new, expanded or renovated operations for our owner occupied business clients • Land Development Loans • Meridian considers a limited number of strictly land development oriented loans based upon the risk, merit of the future project and strength of the borrower/guarantor relationship Our commercial real estate loans increased by $86.1 million, or 11.7%, to $824.0 million at December 31, 2024 from $737.9 million at December 31, 2023.
The remaining commercial real estate loans are managed by our commercial real estate department which offer the following commercial real estate products: • Permanent – Investor Real Estate Loans • Purchase and refinance loan opportunities for a number of product types, including single-family rentals, multi-family residential as well as tenanted income producing properties in a variety of real estate types, including office, retail, industrial, and flex space • Construction Loans • Residential construction loans to finance new construction and renovation of single and 1-4 family homes located within our market area • Commercial construction loans for investment properties, generally with semi-permanent attributes • Construction loans for new, expanded or renovated operations for our owner occupied business clients • Land Development Loans • Meridian considers a limited number of strictly land development oriented loans based upon the risk, merit of the future project and strength of the borrower/guarantor relationship Our commercial real estate loans increased by $55.5 million, or 6.7%, to $879.4 million at December 31, 2025 from $824.0 million at December 31, 2024.
In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the FRB to meet short-term liquidity needs. Through its relationship at the FRB, Meridian had available credit of approximately $5.4 million at December 31, 2024. At December 31, 2024, Meridian had $0 in borrowings from the Federal Reserve.
In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the FRB to meet short-term liquidity needs. Through its relationship at the FRB, Meridian had available credit of approximately $4.2 million at December 31, 2025. At December 31, 2025, Meridian had $0 in borrowings from the Federal Reserve.
Overall the total consumer loan portfolio represented 16.7% and 17.6% of our total loan portfolio at December 31, 2024 and 2023, respectively. Leases, net Meridian Equipment Finance specializes in small ticket equipment leases for small and mid-sized businesses nationally and through a broad range of industries.
Overall the total consumer loan portfolio represented 15.6% and 16.7% of our total loan portfolio at December 31, 2025 and 2024, respectively. Leases, net Meridian Equipment Finance specializes in small ticket equipment leases for small and mid-sized businesses nationally and through a broad range of industries.
Balance Sheet Summary Assets As of December 31, 2024, total assets were $2.4 billion which increased $139.7 million, or 6.2%, from December 31, 2023. This growth in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following section. Loans Our loan portfolio is the largest category of our interest-earning assets.
Balance Sheet Summary Assets As of December 31, 2025, total assets were $2.6 billion which increased $176.1 million, or 7.4%, from December 31, 2024. This growth in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following section. Loans Our loan portfolio is the largest category of our interest-earning assets.
The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 0.91% as of December 31, 2024 compared to 1.17% as of December 31, 2023.
The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.00% as of December 31, 2025 compared to 0.91% as of December 31, 2024.
Meridian’s available liquidity, which totaled $315.8 million at December 31, 2024, compared to $273.4 million at December 31, 2023, includes investments, SNCs, Federal funds sold, mortgages held-for-sale and cash and cash equivalents, less the amount of securities required to be pledged for certain liabilities. Meridian also anticipates scheduled payments and prepayments on its loan and mortgage-backed securities portfolios.
Meridian’s available liquidity, which totaled $346.3 million at December 31, 2025, compared to $315.8 million at December 31, 2024, includes investments, SNCs, Federal funds sold, mortgages held-for-sale and cash and cash equivalents, less the amount of securities required to be pledged for certain liabilities. Meridian also anticipates scheduled payments and prepayments on its loan and mortgage-backed securities portfolios.
The average loan size outstanding in C & I portfolio, excluding leases, was $413 thousand at December 31, 2024 and the weighted average risk rating of the C & I portfolio is 4.1 (pass), based on our credit rating scale of 1 through 9, where ratings 1 through 5 are considered pass.
The average loan size outstanding in C & I portfolio, excluding leases, was $403 thousand at December 31, 2025 and the weighted average risk rating of the C & I portfolio is pass, based on our credit rating scale of 1 through 9, where ratings 1 through 5 are considered pass.
As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of December 31, 2024, Meridian’s maximum borrowing capacity with the FHLB was $699.3 million.
As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of December 31, 2025, Meridian’s maximum borrowing capacity with the FHLB was $751.5 million.
PROVISION FOR CREDIT LOSSES The provision for credit losses was $11.4 million for the year ended December 31, 2024, compared to a $6.8 million provision for the year ended December 31, 2023, an increase of $4.6 million. The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments.
PROVISION FOR CREDIT LOSSES The provision for credit losses was $15.2 million for the year ended December 31, 2025, compared to a $11.4 million provision for the year ended December 31, 2024, an increase of $3.8 million. The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments.
T he Bank’s CBLR was 9.21% and 9.46% as of December 31, 2024 and 2023, respectively, but reports all ratios for comparative purposes. Tables presenting the Bank’s capital amounts and ratios as of December 31, 2024 and 2023 are included in Note 17 - Regulatory Matters.
T he Bank’s CBLR was 9.50% and 9.21% as of December 31, 2025 and 2024, respectively, but reports all ratios for comparative purposes. Tables presenting the Bank’s capital amounts and ratios as of December 31, 2025 and 2024 are included in Note 18 - Regulatory Matters.
Not included in the tables below are equity investments that had fair values of $2.1 million as of December 31, 2024 and 2023. As of December 31, 2024 we also had a held-to-maturity investment portfolio with amortized cost of $33.8 million.
Not included in the tables below are equity investments that had fair values of $2.2 million and $2.1 million, as of December 31, 2025 and 2024, respectively. As of December 31, 2025 we also had a held-to-maturity investment portfolio with amortized cost of $32.5 million.
Leases decreased $45.6 million, or 37.5% to $76.0 million at December 31, 2024 as we continue to shift focus to commercial relationship lending. Investments Our securities portfolio is used to make various term investments, maintain a source of liquidity and serve as collateral for certain types of deposits and borrowings.
Leases decreased $30.5 million, or 40.1% to $45.5 million at December 31, 2025 as we continue to shift focus to commercial relationship lending. Investments Our securities portfolio is used to make various term investments, maintain a source of liquidity and serve as collateral for certain types of deposits and borrowings.
The average yield on loans held for investment increased 35 basis points and the yield on cash and investments increased 46 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.
The average yield on loans held for investment decreased 5 basis points while the yield on cash and investments increased 9 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.
As of December 31, 2024 and 2023, our total loans and leases amounted to $2.1 billion, and $1.9 billion, respectively. Our loan portfolio is comprised of loans originated to be held in portfolio, as well as residential mortgage loans originated for sale.
As of December 31, 2025 and 2024, our total loans and other finance receivables amounted to $2.2 billion, and $2.1 billion, respectively. Our loan portfolio is comprised of loans originated to be held in portfolio, as well as residential mortgage loans originated for sale.
C & I loans overall represented 17.8% and 15.8% of our total loan portfolio at December 31, 2024 and 2023, respectively. 32 Our 10 largest C & I relationships represented 13% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2024.
C & I loans overall represented 19.5% and 17.8% of our total loan portfolio at December 31, 2025 and 2024, respectively. 32 Our 10 largest C & I relationships represented 11% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2025.
Key Performance Ratios The following table presents key financial performance ratios for the periods indicated: Year Ended December 31, 2024 2023 Return on average assets 0.70 % 0.61 % Return on average equity 9.93 % 8.53 % Net interest margin (tax effected yield) 3.16 % 3.35 % Basic earnings per share $ 1.47 $ 1.19 Diluted earnings per share $ 1.45 $ 1.16 The following table presents certain key period-end balances and ratios at the dates indicated: (dollars in thousands, except per share amounts) December 31, 2024 December 31, 2023 Book value per common share $ 15.26 $ 14.13 Tangible book value per common share (1) $ 14.93 $ 13.78 Allowance as a percentage of loans and leases held for investment 0.91 % 1.17 % Allowance as a percentage of loans and leases held for investment (excl. loans at fair value) (1) 0.91 % 1.17 % Tier I capital to risk weighted assets - Corporation 8.1 % 7.9 % Tangible common equity to tangible assets ratio (1) 7.0 % 6.9 % Loans and other finance receivables, net of fees and costs $ 2,030,437 $ 1,895,806 Total assets $ 2,385,867 $ 2,246,193 Total stockholders’ equity $ 171,522 $ 158,022 (1) Non-GAAP financial measure.
Key Performance Ratios The following table presents key financial performance ratios for the periods indicated: Year Ended December 31, 2025 2024 Return on average assets 0.87 % 0.70 % Return on average equity 12.00 % 9.93 % Net interest margin (tax effected yield) 3.64 % 3.16 % Basic earnings per share $ 1.93 $ 1.47 Diluted earnings per share $ 1.89 $ 1.45 The following table presents certain key period-end balances and ratios at the dates indicated: (dollars in thousands, except per share amounts) December 31, 2025 December 31, 2024 Book value per common share $ 16.89 $ 15.26 Tangible book value per common share (1) $ 16.59 $ 14.93 Allowance as a percentage of loans and leases held for investment 0.99 % 0.91 % Allowance as a percentage of loans and leases held for investment (excl. loans at fair value) (1) 1.00 % 0.91 % Tier I capital to risk weighted assets - Corporation 8.7 % 8.1 % Tangible common equity to tangible assets ratio (1) 7.7 % 7.0 % Loans and other finance receivables, net of fees and costs $ 2,170,600 $ 2,030,437 Total assets $ 2,561,995 $ 2,385,867 Total stockholders’ equity $ 199,716 $ 171,522 (1) Non-GAAP financial measure.
Meridian realized net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024, compared to net charge-offs of $5.6 million, or 0.30%, of total average loans for the year ended December 31, 2023.
Meridian realized net charge-offs of $11.9 million, or 0.55%, of total average loans for the year ended December 31, 2025, compared to net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024.
Net interest margin decreased 19 basis points to 3.16% for the year ended December 31, 2024 from 3.35% for the year ended December 31, 2023, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the yield on earnings assets was outpaced by the increase in costs of funds, impacted also by the $25.4 million decrease in average non-interest bearing deposits.
Net interest margin increased 48 basis points to 3.64% for the year ended December 31, 2025 from 3.16% for the year ended December 31, 2024, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the decline in yield on earnings assets was outpaced by the decline in costs of funds, impacted also by the $9.0 million increase in average non-interest bearing deposits.
As of December 31, 2024 our available-for-sale investment portfolio had a fair value of $174.3 million, with an effective tax equivalent yield of 3.72% and an estimated duration of approximately 3.8 years. The largest category of this investment portfolio, or 38.1%, consists of U.S. agency securities, along with 21.1% in municipal securities, and 8.9% in U.S. Treasury securities.
As of December 31, 2025 our available-for-sale investment portfolio had a fair value of $193.5 million, with an effective tax equivalent yield of 3.84% and an estimated duration of approximately 3.7 years. The largest category of this investment portfolio, or 45.7%, consists of U.S. agency securities, along with 20.7% in municipal securities, and 8.4% in U.S. Treasury securities.
The tables below provides the non-GAAP reconciliation for the Corporation’s pre-tax, pre-provision income.
The tables below provides the non-GAAP reconciliation for the Corporation’s pre-provision net revenue.
Additionally, we lend to companies in the technology, healthcare, real estate and financial service industries. Commercial business loans generally include lines of credit and term loans with a maturity of five years or less.
These credit facilities are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses. Additionally, we lend to companies in the technology, healthcare, real estate and financial service industries. Commercial business loans generally include lines of credit and term loans with a maturity of five years or less.
(dollars in thousands) December 31, 2024 December 31, 2023 Allowance for credit losses (GAAP) $ 18,438 $ 22,107 Loans and other finance receivables (GAAP) 2,030,437 1,895,806 Less: Loans at fair value (14,501) (13,726) Loans and other finance receivables, excluding loans at fair value (non-GAAP) $ 2,015,936 $ 1,882,080 ACL to loans and other finance receivables (GAAP) 0.91 % 1.17 % ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP) 0.91 % 1.17 % 37 Liquidity Management maintains liquidity to meet depositors’ needs for funds, to satisfy or fund loan commitments, and for other operating purposes.
(dollars in thousands) December 31, 2025 December 31, 2024 Allowance for credit losses (GAAP) $ 21,573 $ 18,438 Loans and other finance receivables (GAAP) 2,170,600 2,030,437 Less: Loans at fair value (14,396) (14,501) Loans and other finance receivables, excluding loans at fair value (non-GAAP) $ 2,156,204 $ 2,015,936 ACL to loans and other finance receivables (GAAP) 0.99 % 0.91 % ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP) 1.00 % 0.91 % 37 Liquidity Management maintains liquidity to meet depositors’ needs for funds, to satisfy or fund loan commitments, and for other operating purposes.
At December 31, 2024, Meridian had borrowed $119.5 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $183.5 million against its available credit lines.
At December 31, 2025, Meridian had borrowed $115.8 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $178.6 million against its available credit lines.
Our commercial real estate loan portfolio represented 40.0% and 38.6% of our total loan portfolio at December 31, 2024 and 2023, respectively. Construction loans increased $13.1 million, or 5.3%, to $259.6 million at December 31, 2024 from $246.4 million at December 31, 2023.
Our commercial real estate loan portfolio represented 39.9% and 40.0% of our total loan portfolio at December 31, 2025 and 2024, respectively. Construction loans increased $71.0 million, or 27.4%, to $330.5 million at December 31, 2025 from $259.6 million at December 31, 2024.
Home equity lines and loans increased $14.4 million, or 18.9%, to $90.7 million at December 31, 2024 from $76.3 million at December 31, 2023, while residential mortgage loans decreased by $8.0 million, or 3.1%, to $252.6 million at December 31, 2024 from $260.6 million at December 31, 2023.
Home equity lines and loans increased $16.3 million, or 17.9%, to $107.0 million at December 31, 2025 from $90.7 million at December 31, 2024, while residential mortgage loans decreased by $16.4 million, or 6.5%, to $236.1 million at December 31, 2025 from $252.6 million at December 31, 2024.
A majority of charge-offs for the year ended December 31, 2024 were from equipment leases, $5.9 million, commercial loans, $4.8 million, and small business loans, $4.3 million.
A majority of net charge-offs for the year ended December 31, 2025 were from small business loans of $5.0 million, commercial loans of $2.4 million, finance receivables of $2.2 million, and equipment leases of $1.5 million.
Average total loans held for investment increased $136.1 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $158.7 million on average, combined. Home equity loans and residential real estate loans held in portfolio increased $33.6 million on average, combined. Residential loans for sale increased $11.6 million on average.
Average total loans held for investment increased $139.4 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $160.7 million on average, combined. Home equity loans and residential real estate loans held in portfolio increased $14.4 million on average, combined. Residential loans for sale decreased $5.0 million on average.
Year Ended (dollars in thousands) December 31, 2024 December 31, 2023 Income before income tax expense $ 21,786 $ 16,967 Provision for credit losses 11,400 6,815 Pre-tax, pre-provision income $ 33,186 $ 23,782 Year Ended (dollars in thousands) December 31, 2024 December 31, 2023 Bank $ 26,698 $ 27,751 Wealth 2,375 1,240 Mortgage 4,113 (5,209) Pre-tax, pre-provision income $ 33,186 $ 23,782 The table below provides the non-GAAP reconciliation for the Corporation’s tangible common equity ratio and tangible book value per common share.
Year Ended (dollars in thousands) December 31, 2025 December 31, 2024 Income before income tax expense $ 28,402 $ 21,786 Provision for credit losses 15,152 11,400 Pre-provision net revenue $ 43,554 $ 33,186 Year Ended (dollars in thousands) December 31, 2025 December 31, 2024 Bank $ 40,140 $ 26,698 Wealth 2,337 2,375 Mortgage 1,077 4,113 Pre-provision net revenue $ 43,554 $ 33,186 The table below provides the non-GAAP reconciliation for the Corporation’s tangible common equity ratio and tangible book value per common share.
Treasuries 17,039 — (1,589) — 15,450 16 Non-U.S. government agency CMO 12,082 59 (412) — 11,729 9 Corporate bonds 14,415 448 (762) — 14,101 15 Total securities available-for-sale $ 183,764 $ 700 $ (10,160) $ — $ 174,304 139 33 Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position State and municipal securities Total securities held-to-maturity $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19 $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19 December 31, 2023 (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value # of Securities in unrealized loss position Securities available-for-sale: U.S. asset backed securities $ 17,012 $ 25 $ (213) $ 16,824 11 U.S. government agency MBS 22,750 364 (480) 22,634 14 U.S. government agency CMO 21,850 — (2,277) 19,573 30 State and municipal securities 40,093 — (3,877) 36,216 31 U.S.
Treasuries 17,039 — (1,589) — 15,450 16 Non-U.S. government agency CMO 12,082 59 (412) — 11,729 9 Corporate bonds 14,415 448 (762) — 14,101 15 Total securities available-for-sale $ 183,764 $ 700 $ (10,160) $ — $ 174,304 139 Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position Securities held to maturity: State and municipal securities $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19 Total securities held-to-maturity $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19 Asset Quality Summary The ratio of non-performing assets to total assets increased to 2.38% as of December 31, 2025, from 1.90% as of December 31, 2024.
At December 31, 2024, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $242.5 million of available short or long term funding through the CDARS program and $334.6 million of available short or long term funding through brokered CD arrangements.
At December 31, 2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $306.8 million of available short or long term funding through the CDARS program and brokered CD arrangements. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.
The increase in non-performing loans over the period was due to increases in non-performing construction loans, residential real estate loans, and small business loans of $6.0 million, $3.4 million, $2.8 million, respectively, partially offset by a decrease of $3.4 million in non-performing commercial loans due to a $3.5 million partial charge-off of a commercial loan relationship.
The increase in non-performing loans over the period was due to increases in non-performing small business loans, residential mortgage loans, and commercial mortgage loans of $12.5 million, $2.5 million, and $1.7 million, respectively, partially offset by a decrease of $5.2 million in non-performing commercial loans due to the charge-off of a few commercial loans.
During 2024 we sold $59.4 million in SBA loans, a decrease of $25.6 million, or 30.1%, from $85.0 million in SBA loans sold in 2023. The small business loans portfolio represented 7.6% and 7.4% of our total loan portfolio at December 31, 2024 and 2023, respectively.
During 2025 we sold $97.8 million in SBA loans, an increase of $38.3 million, or 64.4%, from $59.4 million in SBA loans sold in 2024. The small business loans portfolio represented 6.3% and 7.6% of our total loan portfolio at December 31, 2025 and 2024, respectively.
Interest income increased $19.5 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $185.4 million, combined with a higher yield on earning assets, which increased 32 basis points.
Interest income increased $10.3 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $164.9 million, offset somewhat by a lower yield on earning assets, which decreased 5 basis points.
As of December 31, 2024 there were specific reserves of $2.7 million against individually evaluated loans, a decrease from $6.5 million as of December 31, 2023.
As of December 31, 2025 there were specific reserves of $3.4 million against individually evaluated loans, an increase from $2.7 million as of December 31, 2024.
Small Business Loans We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs. Our small business loans increased by $13.4 million, or 9.4%, to $155.8 million at December 31, 2024 from $142.3 million at December 31, 2023.
Small Business Loans We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs. Our small business loans decreased by $16.0 million, or 10.3%, to $139.8 million at December 31, 2025 from $155.8 million at December 31, 2024, due to an increase in sale of such loans during 2025.
Wholesale funding supports loan growth as business accounts from lending relationships tend to lag and wholesale funding can easily be managed through term.
Business accounts comprised 52% of all deposits, consumer accounts and municipal deposits comprised 14% and 12%, respectively, and wholesale funding was approximately 22%. Wholesale funding supports loan growth as business accounts from lending relationships tend to lag and wholesale funding can easily be managed through term.
(dollars in thousands) December 31, 2024 December 31, 2023 Total stockholders' equity (GAAP) $ 171,522 $ 158,022 Less: Goodwill and intangible assets 3,666 3,870 Tangible common equity (non-GAAP) $ 167,856 $ 154,152 Total assets (GAAP) 2,385,867 2,246,193 Less: Goodwill and intangible assets 3,666 3,870 Tangible assets (non-GAAP) $ 2,382,201 $ 2,242,323 Stockholders' equity to total assets (GAAP) 7.19 % 7.04 % Tangible common equity to tangible assets (non-GAAP) 7.05 % 6.87 % Shares outstanding 11,240 11,183 Book value per share (GAAP) $ 15.26 $ 14.13 Tangible book value per share (non-GAAP) $ 14.93 $ 13.78 The following is a reconciliation of the allowance for credit losses to total loans held for investment ratio at December 31, 2024.
(dollars in thousands) December 31, 2025 December 31, 2024 Total stockholders' equity (GAAP) $ 199,716 $ 171,522 Less: Goodwill and intangible assets (3,462) (3,666) Tangible common equity (non-GAAP) $ 196,254 $ 167,856 Total assets (GAAP) 2,561,995 2,385,867 Less: Goodwill and intangible assets (3,462) (3,666) Tangible assets (non-GAAP) $ 2,558,533 $ 2,382,201 Stockholders' equity to total assets (GAAP) 7.80 % 7.19 % Tangible common equity to tangible assets (non-GAAP) 7.67 % 7.05 % Shares outstanding 11,826 11,240 Book value per share (GAAP) $ 16.89 $ 15.26 Tangible book value per share (non-GAAP) $ 16.59 $ 14.93 The following is a reconciliation of the allowance for credit losses to loans and other finance receivables ratio at December 31, 2025.
NON-INTEREST EXPENSE The following table presents the components of non-interest expense for the periods indicated: Year Ended December 31, (Dollars in thousands) 2024 2023 $ Change % Change Salaries and employee benefits $ 47,268 $ 47,377 $ (109) (0.2) % Occupancy and equipment 5,976 4,842 1,134 23.4 % Professional fees 4,767 4,312 455 10.6 % Data processing and software 6,144 6,415 (271) (4.2) % Advertising and promotion 3,293 3,730 (437) (11.7) % Pennsylvania bank shares tax 972 968 4 0.4 % Other 10,729 9,481 1,248 13.2 % Total non-interest expense $ 79,149 $ 77,125 $ 2,024 2.6 % Total non-interest expense increased $2.0 million, or 2.6% to $79.1 million for the year ended December 31, 2024.
NON-INTEREST EXPENSE The following table presents the components of non-interest expense for the periods indicated: Year Ended December 31, (Dollars in thousands) 2025 2024 $ Change % Change Salaries and employee benefits $ 51,280 $ 47,268 $ 4,012 8.5 % Occupancy and equipment 4,576 5,976 (1,400) (23.4) % Professional fees 4,095 4,767 (672) (14.1) % Data processing and software 7,031 6,144 887 14.4 % Advertising and promotion 3,877 3,293 584 17.7 % Pennsylvania bank shares tax 1,016 972 44 4.5 % Other 11,429 10,729 700 6.5 % Total non-interest expense $ 83,304 $ 79,149 $ 4,155 5.2 % Total non-interest expense increased $4.2 million, or 5.2% to $83.3 million for the year ended December 31, 2025.
Time deposits of $250 thousand or more had remaining maturities as follows: Year Ended December 31, 2024 (Dollars in thousands) Amount % 3 months or less $ 133,853 24.5% Over 3 months through 6 months 122,574 22.5% Over 6 months through 12 months 154,789 28.4% Over 12 months 134,443 24.6% Total $ 545,659 100.0% Equity Consolidated stockholders’ equity of the Corporation was $171.5 million, or 7.2% of total assets as of December 31, 2024 as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023.
Time deposits of $250 thousand or more had remaining maturities as follows: Year Ended December 31, 2025 (Dollars in thousands) Amount % 3 months or less $ 144,428 27.6% Over 3 months through 6 months 133,151 25.5% Over 6 months through 12 months 182,904 35.0% Over 12 months 62,185 11.9% Total $ 522,668 100.0% Equity Consolidated stockholders’ equity of the Corporation was $199.7 million, or 7.8% of total assets as of December 31, 2025 as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024.
For the Year Ended December 31, (dollars in thousands) 2024 2023 Average Balance Interest Income/ Expense Yields/ Rates Average Balance Interest Income/ Expense Yields/ Rates Assets: Cash and cash equivalents $ 35,915 $ 1,848 5.14 % $ 24,354 $ 1,266 5.20 % Investment securities - taxable 140,602 5,739 4.08 112,045 3,873 3.46 Investment securities - tax exempt (1) 56,698 1,604 2.83 59,147 1,669 2.82 Loans held for sale 34,775 2,226 6.40 23,202 1,480 6.38 Loans held for investment (1) 1,986,211 144,940 7.30 1,850,088 128,609 6.95 Total loans 2,020,986 147,166 7.28 1,873,290 130,089 6.94 Total interest-earning assets 2,254,201 156,357 6.94 % 2,068,836 136,897 6.62 % Noninterest earning assets 95,069 95,979 Total assets $ 2,349,270 $ 2,164,815 Liabilities and stockholders' equity: Interest-bearing demand deposits $ 136,387 $ 5,280 3.87 % $ 187,404 $ 6,659 3.55 % Money market and savings deposits 810,344 32,778 4.04 692,933 23,987 3.46 Time deposits 748,417 35,979 4.81 636,843 27,173 4.27 Total interest - bearing deposits 1,695,148 74,037 4.37 1,517,180 57,819 3.81 Borrowings 159,483 7,878 4.94 145,545 7,266 4.99 Subordinated debentures 49,892 3,116 6.25 43,035 2,562 5.95 Total interest-bearing liabilities 1,904,523 85,031 4.46 1,705,760 67,647 3.97 Noninterest-bearing deposits 241,990 267,402 Other noninterest-bearing liabilities 38,121 36,421 Total liabilities 2,184,634 2,009,583 Total stockholders' equity 164,636 155,232 Total stockholders' equity and liabilities $ 2,349,270 $ 2,164,815 Net interest income and spread (1) $ 71,326 2.48 $ 69,250 2.65 Net interest margin (1) 3.16 % 3.35 % (1) Yields and net interest income are reflected on a tax-equivalent basis. 28 Rate/Volume Analysis The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the year ended December 31, 2024 as compared to the year ended December 31, 2023, allocated by rate and volume.
For the Year Ended December 31, (dollars in thousands) 2025 2024 Average Balance Interest Income/ Expense Yields/ Rates Average Balance Interest Income/ Expense Yields/ Rates Assets: Cash and cash equivalents $ 41,052 $ 1,800 4.39 % $ 35,915 $ 1,848 5.14 % Investment securities - taxable 168,172 7,271 4.32 140,602 5,739 4.08 Investment securities - tax exempt (1) 54,525 1,546 2.84 56,698 1,604 2.83 Loans held for sale 29,771 1,864 6.26 34,775 2,226 6.40 Loans held for investment (1) 2,125,591 154,128 7.25 1,986,211 144,940 7.30 Total loans 2,155,362 155,992 7.24 2,020,986 147,166 7.28 Total interest-earning assets 2,419,111 166,609 6.89 % 2,254,201 156,357 6.94 % Noninterest earning assets 90,199 95,069 Total assets $ 2,509,310 $ 2,349,270 Liabilities and stockholders' equity: Interest-bearing demand deposits $ 162,107 $ 5,083 3.14 % $ 136,387 $ 5,280 3.87 % Money market and savings deposits 965,264 32,167 3.33 810,344 32,778 4.04 Time deposits 734,168 30,919 4.21 748,417 35,979 4.81 Total interest - bearing deposits 1,861,539 68,169 3.66 1,695,148 74,037 4.37 Borrowings 129,796 6,204 4.78 159,483 7,878 4.94 Subordinated debentures 49,789 4,263 8.56 49,892 3,116 6.25 Total interest-bearing liabilities 2,041,124 78,636 3.85 1,904,523 85,031 4.46 Noninterest-bearing deposits 250,999 241,990 Other noninterest-bearing liabilities 35,204 38,121 Total liabilities 2,327,327 2,184,634 Total stockholders' equity 181,983 164,636 Total stockholders' equity and liabilities $ 2,509,310 $ 2,349,270 Net interest income and spread (1) $ 87,973 3.04 $ 71,326 2.48 Net interest margin (1) 3.64 % 3.16 % (1) Yields and net interest income are reflected on a tax-equivalent basis. 28 Rate/Volume Analysis The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the year ended December 31, 2025 as compared to the year ended December 31, 2024, allocated by rate and volume.
(dollars in thousands) December 31, 2024 % of Loan Type to Total Loans December 31, 2023 % of Loan Type to Total Loans Commercial mortgage $ 3,469 41% $ 4,375 39% Home equity lines and loans 1,147 4% 998 4% Residential mortgage 1,021 12% 1,020 14% Construction 923 13% 485 13% Commercial and industrial 3,098 18% 4,518 16% Small business loans 6,304 8% 7,005 8% Leases 2,476 4% 3,706 6% Total $ 18,438 100% $ 22,107 100% 35 The following table provides information on net (charge-offs) and recoveries by loan category for the years ended: December 31, 2024 December 31, 2023 Home equity lines and loans $ (56) $ (82) Residential mortgage 13 — Commercial and industrial (6,304) (209) Small business loans (4,164) (1,483) Consumer (1) 2 Leases (5,324) (3,779) Total Net Charge-offs $ (15,836) $ (5,551) Deposits The following table presents the major categories of deposits at the dates indicated: (Dollars in thousands) December 31, 2024 December 31, 2023 $ Change % Change Noninterest-bearing deposits $ 240,858 $ 239,289 $ 1,569 0.7 % Interest-bearing deposits: Interest-bearing demand deposits 141,439 150,898 (9,459) (6.3) % Money market and savings deposits 913,536 747,803 165,733 22.2 % Time deposits 709,535 685,472 24,063 3.5 % Total interest-bearing deposits 1,764,510 1,584,173 180,337 11.4 % Total deposits $ 2,005,368 $ 1,823,462 $ 181,906 10.0 % Total deposits were $2.0 billion as of December 31, 2024, up $181.9 million, or 10.0%, from December 31, 2023.
(dollars in thousands) December 31, 2025 % of Loan Type to Total Loans December 31, 2024 % of Loan Type to Total Loans Commercial mortgage $ 3,676 41% $ 3,469 41% Home equity lines and loans 1,162 5% 1,147 4% Residential mortgage 926 11% 1,021 12% Construction 2,067 15% 923 13% Commercial, industrial & other finance receivables 2,982 20% 3,098 18% Small business loans 9,321 6% 6,304 8% Leases 1,439 2% 2,476 4% Total $ 21,573 100% $ 18,438 100% 35 The following table provides information on net (charge-offs) and recoveries by loan category for the years ended: December 31, 2025 December 31, 2024 Home equity lines and loans $ 6 $ (56) Residential mortgage 2 13 Construction (738) — Commercial, industrial & other finance receivables (4,632) (6,304) Small business loans (4,951) (4,164) Consumer (7) (1) Leases (1,538) (5,324) Total Net Charge-offs $ (11,858) $ (15,836) Deposits The following table presents the major categories of deposits at the dates indicated: (Dollars in thousands) December 31, 2025 December 31, 2024 $ Change % Change Noninterest-bearing deposits $ 245,377 $ 240,858 $ 4,519 1.9 % Interest-bearing deposits: Interest-bearing demand deposits 157,360 141,439 15,921 11.3 % Money market and savings deposits 1,023,290 913,536 109,754 12.0 % Time deposits 732,101 709,535 22,566 3.2 % Total interest-bearing deposits 1,912,751 1,764,510 148,241 8.4 % Total deposits $ 2,158,128 $ 2,005,368 $ 152,760 7.6 % Total deposits were $2.2 billion as of December 31, 2025, up $152.8 million, or 7.6%, from December 31, 2024.
See “Non-GAAP Financial Measures” for a reconciliation of this measure to its most comparable GAAP measure. Allowance for Credit Losses The following is a summary of the allocation of the allowance for credit losses by loan category for the periods presented.
Allowance for Credit Losses The following is a summary of the allocation of the allowance for credit losses by loan category for the periods presented.
Construction loans represented 12.6% and 12.9% of our total loan portfolio at December 31, 2024 and 2023, respectively. Commercial and Industrial Loans (C & I) We provide a variety of variable and fixed rate commercial business loans and lines of credit. These loans and lines of credit are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses.
Construction loans represented 15.0% and 12.6% of our total loan portfolio at December 31, 2025 and 2024, respectively. Commercial and Industrial Loans (C & I) and Other Finance Receivables We provide a variety of variable and fixed rate commercial business loans, lines of credit and other financing facilities.
The following table presents the amortized cost and fair value of securities at the dates indicated: December 31, 2024 (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Fair value # of Securities in unrealized loss position Securities available-for-sale: U.S. asset backed securities $ 29,931 $ 73 $ (160) $ — $ 29,844 12 U.S. government agency MBS 21,392 96 (617) — 20,871 14 U.S. government agency CMO 48,051 23 (2,461) — 45,613 42 State and municipal securities 40,854 1 (4,159) — 36,696 31 U.S.
Treasuries 17,039 — (833) — 16,206 16 Non-U.S. government agency CMO 8,786 27 (207) — 8,606 9 Corporate bonds 14,023 266 (375) — 13,914 11 Total securities available-for-sale $ 199,127 $ 1,159 $ (6,829) $ — $ 193,457 124 33 Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position State and municipal securities Total securities held-to-maturity $ 32,544 $ 22 $ (2,414) $ — $ 30,152 19 $ 32,544 $ 22 $ (2,414) $ — $ 30,152 19 December 31, 2024 (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Fair value # of Securities in unrealized loss position Securities available-for-sale: U.S. asset backed securities $ 29,931 $ 73 $ (160) $ — $ 29,844 12 U.S. government agency MBS 21,392 96 (617) — 20,871 14 U.S. government agency CMO 48,051 23 (2,461) — 45,613 42 State and municipal securities 40,854 1 (4,159) — 36,696 31 U.S.
Changes in Financial Condition • Total assets increased $139.7 million, or 6.2%, to $2.4 billion as of December 31, 2024. • Portfolio loans, increased $137.8 million, or 7.3%, to $2.0 billion as of December 31, 2024, Results of Operations • Consolidated net income increased $3.1 million, or 23.4%. • The return on average assets and return on average equity was 0.70% and 9.93%, respectively, for the year ended December 31, 2024, compared to 0.61% and 8.53%, respectively, for the year ended December 31, 2023. • Net interest income was up $2.1 million, or 3.0% due to higher levels of earning assets. • Non-interest income increased $9.4 million or 29.3% due largely to an improved mortgage banking environment.
Results of Operations • Consolidated net income increased $5.5 million, or 33.6%, to $21.8 million. • The return on average assets and return on average equity was 0.87% and 12.00%, respectively, for the year ended December 31, 2025, compared to 0.70% and 9.93%, respectively, for the year ended December 31, 2024. • Net interest income was up $16.7 million, or 23.5% due to higher volume of earning assets. • Non-interest income decreased $2.2 million or 5.2% due largely to a decline in MSR sales and a decline in other non-interest income.
Other expense increased $1.2 million due to increases in certain loan expenses and employee related expenses. 30 INCOME TAX EXPENSE The following table presents income tax expense and related metrics for the periods indicated: Year Ended December 31, (Dollars in thousands) 2024 2023 $ Change % Change Income before income taxes $ 21,786 $ 16,967 $ 4,819 28.4 % Income tax expense $ 5,440 $ 3,724 $ 1,716 46.1 % Effective tax rate 24.97 % 21.95 % 3.02 % 13.7 % While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate also increased.
INCOME TAX EXPENSE The following table presents income tax expense and related metrics for the periods indicated: Year Ended December 31, (Dollars in thousands) 2025 2024 $ Change % Change Income before income taxes $ 28,402 $ 21,786 $ 6,616 30.4 % Income tax expense $ 6,566 $ 5,440 $ 1,126 20.7 % Effective tax rate 23.12 % 24.97 % (1.85) % (7.4) % While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate decreased related to the impact of solar tax credits purchased at the end of 2025.
The following is a discussion of the critical accounting policies and significant estimates that require us to make complex and subjective judgments. Additional information about these policies can be found in Note 1 - Summary of Significant Accounting Policies, to the Corporation’s Consolidated Financial Statements as of and for the years ended December 31, 2024 and 2023.
Additional information about these policies can be found in Note 1 - Summary of Significant Accounting Policies, to the Corporation’s Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024. 26 Provision and allowance for credit losses The ACL is a valuation reserve established and maintained by charges against operating income.
There was $159 thousand in other real estate property included in non-performing assets as of December 31, 2024 and 2023 related to a well secured residential property. Total non-performing loans were $45.1 million and $33.8 million as of December 31, 2024 and December 31, 2023, respectively.
There was $3.6 million and $159 thousand in other real estate property, as well as $2.4 million and $117 thousand of repossessed assets, included in non-performing assets as of December 31, 2025 and 2024, respectively.
Management’s evaluation process used to determine the appropriateness of the ACL is complex and requires the use of estimates, assumptions and judgments which are inherently subject to high uncertainty.
It is an estimate of expected credit losses, measured over the contractual life of a loan, that considers historical loss experience, current conditions and forecasts of future economic conditions. Management’s evaluation process used to determine the appropriateness of the ACL is complex and requires the use of estimates, assumptions and judgments which are inherently subject to high uncertainty.
The Corporation is proactive with its loan review process that utilizes the engagement of an independent outside loan review firm, which helps identify developing credit issues. Proactive steps that are taken include the procurement of additional collateral (preferably outside the current loan structure) whenever possible and frequent contact with the borrower.
Proactive steps that are taken include the procurement of additional collateral (preferably outside the current loan structure) whenever possible and frequent contact with the borrower. The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss.
Total cost of deposits increased 58 basis points reflecting a decrease of $25.4 million in average non-interest bearing deposits. Interest expense on borrowings increased $612 thousand as the cost decreased 5 basis points, and total average short-term borrowings increased $13.9 million.
Total cost of deposits decreased 59 basis points reflecting an increase of $9.0 million in average non-interest bearing deposits. Interest expense on borrowings decreased $1.7 million as the cost decreased 16 basis points, and total average borrowings balances decreased $29.7 million.
The increase in stockholders’ equity is the result of year-to-date net income of $16.3 million, and comprehensive income of $1.3 million, partially offset by dividends paid of $5.6 million, and $456 thousand in stock-based compensation and stock options exercised.
The increase in stockholders’ equity is the result of net income for the year ended December 31, 2025 of $21.8 million, net proceeds from the sale of common stock of $7.5 million, comprehensive income of $2.9 million, and $596 thousand in stock-based compensation and stock options exercised, partially offset by dividends paid of $5.7 million, and an increase of $425 thousand in ESOP leverage.
Non-interest bearing deposits increased $1.6 million, or 0.7%, from December 31, 2023. Interest-bearing demand deposits decreased $9.5 million, or 6.3%, from December 31, 2023, while money market accounts/savings accounts increased $165.7 million, or 22.2%, during the period. Business accounts comprised 50% of all deposits, consumer accounts and municipal deposits comprised 13% and 12%, respectively, and wholesale funding was approximately 25%.
Non-interest bearing deposits increased $4.5 million, or 1.9%, from December 31, 2024. Interest-bearing demand deposits increased $15.9 million, or 11.3%, from December 31, 2024, while money market accounts and savings deposits increased $109.8 million, or 12.0%, during the period.
Interest expense increased $17.4 million, year over year, due primarily to market interest rate rises, as well as an increase of $178.0 million in average interest bearing deposits. Interest expense on deposits increased $16.2 million with the cost of interest-bearing deposits increasing 56 basis points to 4.37%.
Interest expense decreased $6.4 million, year over year, due primarily to market interest rate declines, partially offset by an increase of $166.4 million in average interest bearing deposits. Interest expense on deposits decreased $5.9 million with the cost of interest-bearing deposits having decreased 71 basis points to 3.66%.
The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss. 34 The following table presents nonperforming assets and related ratios for the periods indicated: (dollars in thousands) December 31, 2024 December 31, 2023 Non-performing assets: Nonaccrual loans: Real estate loans: Commercial mortgage $ 809 $ — Home equity lines and loans 1,716 1,037 Residential mortgage 7,900 4,536 Construction 8,613 1,206 Total real estate loans 19,038 6,779 Commercial and industrial 11,966 15,413 Small business loans 12,270 9,440 Leases 1,851 2,131 Total nonaccrual loans 45,125 33,763 Other real estate owned 159 1,703 Total non-performing assets $ 45,284 $ 35,466 Asset quality ratios: Non-performing assets to total assets 1.90 % 1.58 % Non-performing loans to: Total loans and other finance receivables 2.22 % 1.78 % Total loans and other finance receivables (excluding loans at fair value) (1) 2.24 % 1.79 % Allowance for credit losses to: (2) Total loans and other finance receivables 0.91 % 1.17 % Total loans and other finance receivables (excluding loans at fair value) (1) 0.91 % 1.17 % Non-performing loans 40.86 % 65.48 % Total loans and leases $ 2,062,850 $ 1,920,622 Total loans and other finance receivables $ 2,030,437 $ 1,895,806 Total loans and other finance receivables (excluding loans at fair value) $ 2,015,936 $ 1,882,080 Allowance for credit losses $ 18,438 $ 22,107 (1) The allowance for credit losses to total loans held-for-investment (excluding loans at fair value) ratio is a non-GAAP financial measure.
The following table presents nonperforming assets and related ratios for the periods indicated: (dollars in thousands) December 31, 2025 December 31, 2024 Non-performing assets: Nonaccrual loans: Real estate loans: Commercial mortgage $ 2,472 $ 809 Home equity lines and loans 2,023 1,716 Residential mortgage 10,385 7,900 Construction 6,650 8,613 Total real estate loans 21,530 19,038 Commercial, industrial & other finance receivables 6,770 11,966 Small business loans (1) 24,781 12,270 Leases 1,979 1,851 Total nonaccrual loans 55,060 45,125 Other real estate owned 3,592 159 Repossessed assets 2,405 117 Total non-performing assets $ 61,057 $ 45,401 Asset quality ratios: Non-performing assets to total assets 2.38 % 1.90 % Non-performing loans to: Total loans and other finance receivables 2.54 % 2.22 % Total loans and other finance receivables (excluding loans at fair value) (2) 2.55 % 2.24 % Allowance for credit losses to: Total loans and other finance receivables 0.99 % 0.91 % Total loans and other finance receivables (excluding loans at fair value) (2) 1.00 % 0.91 % Non-performing loans 39.18 % 40.86 % Total loans and leases $ 2,204,362 $ 2,062,850 Total loans and other finance receivables 2,170,600 2,030,437 Total loans and other finance receivables (excluding loans at fair value) 2,156,204 2,015,936 Allowance for credit losses 21,573 18,438 (1) Included in non-performing small business loans as of December 31, 2025, and 2024, respectively, are $13.2 million and $6.5 million in SBA guarantees.
The primary source of repayment for commercial business loans is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees. Our C & I loans increased $64.5 million, or 21.3%, to $367.4 million at December 31, 2024 from $302.9 million at December 31, 2023.
Other finance receivables include advances to merchants for short-term cash flow needs. The primary source of repayment for commercial credit is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees.
Certificates of deposit greater than or equal to $250 thousand scheduled to mature in one year or less from December 31, 2024 totaled $411.2 million.
Loan Commitments At December 31, 2025, Meridian had $651.3 million in unfunded loan commitments. Management anticipates these commitments will be funded by means of normal cash flows. Certificates of deposit greater than or equal to $250 thousand scheduled to mature in one year or less from December 31, 2025 totaled $460.5 million.
Despite the decline in SBA loan sales volume, the gross margin on sales in 2024 was 8.0% overall, compared to 6.7% for 2023 sales. The increase in wealth management revenue was due to increased assets under management and better market conditions in general.
The $581 thousand increase in wealth management revenue was due to increased assets under management and better market conditions in general year over year.
Changes in interest income and/or expense attributable to both volume and rate have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category. 2024 Compared to 2023 (dollars in thousands) Rate Volume Total Interest income: Cash and cash equivalents $ (12) $ 594 $ 582 Investment securities - taxable 774 1,092 1,866 Investment securities - tax exempt (1) 4 (69) (65) Loans held for sale 5 741 746 Loans held for investment (1) 6,588 9,743 16,331 Total loans 6,593 10,484 17,077 Total interest income $ 7,359 $ 12,101 $ 19,460 Interest expense: Interest-bearing demand deposits $ 556 $ (1,935) $ (1,379) Money market and savings deposits 4,383 4,408 8,791 Time deposits 3,695 5,111 8,806 Total interest - bearing deposits 8,634 7,584 16,218 Borrowings (77) 689 612 Subordinated debentures 130 424 554 Total interest expense 8,687 8,697 17,384 Interest differential $ (1,328) $ 3,404 $ 2,076 (1) Yields and net interest income are reflected on a tax-equivalent basis.
Changes in interest income and/or expense attributable to both volume and rate have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category. 2025 Compared to 2024 (dollars in thousands) Rate Volume Total Interest income: Cash and cash equivalents $ (292) $ 244 $ (48) Investment securities - taxable 355 1,177 1,532 Investment securities - tax exempt (1) 4 (62) (58) Loans held for sale (48) (314) (362) Loans held for investment (1) (924) 10,112 9,188 Total loans (972) 9,798 8,826 Total interest income $ (905) $ 11,157 $ 10,252 Interest expense: Interest-bearing demand deposits $ (1,098) $ 901 $ (197) Money market and savings deposits (6,303) 5,692 (611) Time deposits (4,386) (674) (5,060) Total interest - bearing deposits (11,787) 5,919 (5,868) Borrowings (248) (1,426) (1,674) Subordinated debentures 1,153 (6) 1,147 Total interest expense (10,882) 4,487 (6,395) Interest differential $ 9,977 $ 6,670 $ 16,647 (1) Yields and net interest income are reflected on a tax-equivalent basis.
The increase in provision for funded loans of $4.4 million for the year ended December 31, 2024 was primarily due to an increase in net charge-offs year over year. While net charge-offs increased $10.3 million in 2024 over 2023, nearly half of the loans charged-off were specifically reserved for in prior periods.
The increase in provision for funded loans of $3.4 million for the year ended December 31, 2025 was the result of an increase in net charge-offs on construction and small business loans and the resulting increase in specific reserves as nonperforming loans increased $9.9 million, largely small business loans.
The provision for unfunded loan commitments decreased $226 thousand during the year due to favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the unfunded loss model. 29 NON-INTEREST INCOME The following table presents the components of non-interest income for the periods indicated: Year Ended December 31, (Dollars in thousands) 2024 2023 $ Change % Change Mortgage banking income $ 21,044 $ 16,537 $ 4,507 27.3 % Wealth management income 5,735 4,928 807 16.4 % SBA loan income 3,458 4,485 (1,027) (22.9) % Earnings on investment in life insurance 868 789 79 10.0 % Gain on sale of MSRs 3,992 — 3,992 100.0 % Gain on sale of OREO 317 — 317 100.0 % Net change in the fair value of derivative instruments 30 91 (61) (67.0) % Net change in the fair value of loans held-for-sale (25) 32 (57) (178.1) % Net change in the fair value of loans held-for-investment 214 132 82 62.1 % Net (loss) gain on hedging activity (87) 28 (115) (410.7) % Net loss on sale of investment securities available-for-sale (57) (58) 1 (1.7) % Other 5,850 5,001 849 17.0 % Total non-interest income $ 41,339 $ 31,965 $ 9,374 29.3 % Total non-interest income increased $9.4 million as a result of higher mortgage banking revenue, the gain of $4.0 million on the sale of $6.6 million in residential loan servicing rights and an increase in wealth management revenue of $807 thousand.
The overall impact to the ACL from the model upgrade, before applying qualitative adjustments, was not considered material. 29 NON-INTEREST INCOME The following table presents the components of non-interest income for the periods indicated: Year Ended December 31, (Dollars in thousands) 2025 2024 $ Change % Change Mortgage banking income $ 20,783 $ 21,044 $ (261) (1.2) % Wealth management income 6,316 5,735 581 10.1 % SBA loan income 5,452 3,458 1,994 57.7 % Earnings on investment in life insurance 956 868 88 10.1 % Net gain on sale of MSRs 403 3,992 (3,589) (89.9) % Net (loss) gain on sale of loans (434) 15 (449) (2993.3) % Net change in the fair value of derivative instruments 373 30 343 1143.3 % Net change in the fair value of loans held-for-sale 310 (25) 335 (1340.0) % Net change in the fair value of loans held-for-investment 659 214 445 207.9 % Net (loss) on hedging activity (151) (87) (64) 73.6 % Net gain (loss) on sale of investments AFS 501 (57) 558 (978.9) % Other 4,012 6,152 (2,140) (34.8) % Total non-interest income $ 39,180 $ 41,339 $ (2,159) (5.2) % Total non-interest income decreased $2.2 million, or 5.2%, from the year-ended December 31, 2024 to the year-end December 31, 2025.
Mortgage banking income increased $4.5 million, due to an increase of $178.0 million, or 28.6% in mortgage loan originations, despite the higher interest rate environment and continued lack of housing inventory. SBA loan sale income decreased $1.0 million due to a decrease of $25.6 million, or 30.1%, in the volume of loans sold in 2024 compared to 2023.
SBA loan sale income increased due to an increase of $38.3 million, or 64.4%, in the volume of loans sold in 2025 to $97.8 million compared to 2024. The gross margin on SBA sales in 2025 was 7.1% overall, compared to 8.0% for 2024 sales.
Removed
The JOBS Act permitted us an extended transition period for complying with new or revised accounting standards affecting public companies.
Added
The following is a discussion of the critical accounting policies and significant estimates that require us to make complex and subjective judgments.
Removed
We have elected to take advantage of this extended transition period, which means that the financial statements included in this Annual Report, as well as any financial statements that were filed prior to this Annual Report, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period.
Added
Changes in Financial Condition • Total assets increased $176.1 million, or 7.4%, to $2.6 billion as of December 31, 2025. • Portfolio loans, increased $141.4 million, or 7.0%, to $2.2 billion as of December 31, 2025.
Removed
Provision and allowance for credit losses Beginning on January 1, 2023, we adopted ASC 326, which replaced the former incurred loss methodology with an expected credit loss methodology that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of an asset.
Added
The increase in provision was also impacted by an upgrade to the third-party macroeconomic forecast model used to estimate credit losses on the loan portfolio. The model upgrade was based on re-assessing the current macroeconomic variable relationships to expected results.

… 33 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed25 unchanged
Biggest changeStrategies include actively lowering deposit and funding rates as well as adding and maintaining the use of interest rate floors on floating rate loans. 39 Changes in Market Interest Rates December 31, 2024 December 31, 2023 +300 basis points over next 12 months 4 % (7) % +200 basis points over next 12 months 4 % (3) % +100 basis points over next 12 months 3 % — % No Change -100 basis points over next 12 months (6) % (3) % -200 basis points over next 12 months (16) % (13) % -300 basis points over next 12 months (33) % (31) % This economic value of equity profile at December 31, 2024 suggests that we would experience a negative effect from a decrease in rates, and that the impact would become greater as rates continue to fall due to the duration of our interest-earning assets.
Biggest changeStrategies include actively lowering deposit and funding rates as well as adding and maintaining the use of interest rate floors on floating rate loans. 39 Changes in Market Interest Rates December 31, 2025 December 31, 2024 +300 basis points over next 12 months 7 % 4 % +200 basis points over next 12 months 6 % 4 % +100 basis points over next 12 months 4 % 3 % No Change -100 basis points over next 12 months (7) % (6) % -200 basis points over next 12 months (18) % (16) % -300 basis points over next 12 months (34) % (33) % This economic value of equity profile at December 31, 2025 suggests that we would experience a negative effect from a decrease in rates, and that the impact would become greater as rates continue to fall due to the duration of our interest-earning assets.
Potential changes to our economic value of equity between a flat rate scenario and hypothetical rising and declining rate scenarios, measured as of December 31, 2024 and 2023, are presented in the following table. The projections assume shifts upward and downward in the yield curve of 100, 200 and 300 basis points occurring immediately.
Potential changes to our economic value of equity between a flat rate scenario and hypothetical rising and declining rate scenarios, measured as of December 31, 2025 and 2024, are presented in the following table. The projections assume shifts upward and downward in the yield curve of 100, 200 and 300 basis points occurring immediately.
Potential changes to our net interest income between a flat interest rate scenario and hypothetical rising and declining interest rate scenarios, measured over a one-year period as of December 31, 2024 and 2023 are presented in the following table.
Potential changes to our net interest income between a flat interest rate scenario and hypothetical rising and declining interest rate scenarios, measured over a one-year period as of December 31, 2025 and 2024 are presented in the following table.
Rate Ramp: Changes in Market Interest Rates December 31, 2024 December 31, 2023 +300 basis points over next 12 months 1.87 % 0.01 % +200 basis points over next 12 months 1.48 % 0.19 % +100 basis points over next 12 months 0.92 % 0.15 % No Change -100 basis points over next 12 months (1.08) % (1.37) % -200 basis points over next 12 months (1.82) % (2.28) % -300 basis points over next 12 months (1.84) % (3.07) % The above interest rate simulation suggests that the Corporation’s balance sheet is asset sensitive as of December 31, 2024.
Rate Ramp: Changes in Market Interest Rates December 31, 2025 December 31, 2024 +300 basis points over next 12 months 1.32 % 1.87 % +200 basis points over next 12 months 1.10 % 1.48 % +100 basis points over next 12 months 0.67 % 0.92 % No Change -100 basis points over next 12 months (0.60) % (1.08) % -200 basis points over next 12 months (0.76) % (1.82) % -300 basis points over next 12 months (0.25) % (1.84) % The above interest rate simulation suggests that the Corporation’s balance sheet is asset sensitive as of December 31, 2025.

Other MRBK 10-K year-over-year comparisons