MRBK Meridian Corp - 10-K

Item 1A. Risk Factors

Investing in our common stock involves a significant degree of risk. The material risks and uncertainties that management believes affect us are described below. Before investing in our common stock, you should carefully consider the risks and uncertainties described below, in addition to the other information contained in this Annual Report. Any of the following risks, as well as risks that we do not know or currently deem immaterial, could have a material adverse effect on our business, financial condition or results of operations. As a result, the trading price of our common stock could decline, and you could lose some or all of your investment. 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”.

Our Annual Report is subject to Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. Compliance with Section 404 is expensive and time consuming for management and could result in the detection of internal control deficiencies of which we are currently unaware. The loss of “emerging growth company” status and compliance with the additional requirements substantially increases our legal and financial compliance costs and make some activities more time consuming and costly.

Risks Related to Our Business / Operations

Our business and operations may be materially adversely affected by national and local market economic conditions.

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. 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 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. All of these factors can individually or in the aggregate be detrimental to our business, and the interplay between these factors can be complex and unpredictable. Unfavorable market conditions can result in a deterioration in the credit quality of our borrowers and the demand for our products and services, an increase in the number of delinquencies, defaults and charge-offs, additional provisions for loan losses, a decline in the value of our collateral, and an overall material adverse effect on the quality of our loan portfolio.

The economic conditions in our local markets may be different from the economic conditions in the United States as a whole. Our success depends to a certain extent on the general economic conditions of the geographic markets that we serve in Pennsylvania, New Jersey, Delaware, Maryland, and Florida. Local economic conditions in these areas have a significant impact on our commercial, real estate and construction loans, the ability of borrowers to repay these loans and the value of the collateral securing these loans. Adverse changes in the economic conditions of the northeastern United States in general or any one or more of these local markets could negatively impact the financial results of our banking operations and have a negative effect on our profitability.

The value of the financial instruments we own may decline in the future.

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. 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. 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. Factors which are considered in the analysis include, but are not limited to, the extent to which the fair value is less than the amortized cost basis, the financial condition, credit rating and future prospects of the issuer, whether the debtor is current on contractually obligated interest and principal payments and the Corporation’s intent and ability to retain the security for a period of time sufficient to allow for any anticipated recovery in fair value and the likelihood of any near-term fair value recovery. If such decline is deemed to be uncollectible, the security is written down to a new cost basis and the resulting loss will be recognized as a securities provision for credit losses through an allowance for credit losses.

For those financial instruments measured at fair value, we are required to recognize the changes in the fair value of such instruments in earnings or AOCI each quarter. Therefore, any increases or decreases in the fair value of these financial instruments have a corresponding impact on reported earnings or AOCI. Fair value can be affected by a variety of factors, many of which are beyond our control, including our credit position, interest rate volatility, capital markets volatility, and other economic factors. 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.

One of our primary focuses is to serve the banking and financial services needs of small and medium sized businesses. These businesses generally have fewer financial resources than larger entities and less access to capital sources and loan facilities. If economic conditions are generally unfavorable in our market areas, our small business borrowers may be disproportionately affected and their ability to repay outstanding loans may be negatively affected, resulting in an adverse effect on our results of operations and financial condition.

We may be adversely affected by risks associated with completed and potential acquisitions.

We evaluate opportunities to acquire and invest in banks and in other complementary businesses. As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including short and long-term liquidity and capital structure. 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.

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.

We may not be successful in overcoming these risks or any other problems encountered in connection with potential acquisitions. Our inability to overcome these risks could have an adverse effect on our ability to achieve our business strategy and could have an adverse effect on our financial condition and results of operations.

Liquidity risks could affect operations and jeopardize our business, financial condition and results of operations

Liquidity risk is the risk that we will not be able to meet our obligations, including financial commitments, as they come due and is inherent in our operations. Our access to funding sources in amounts adequate to finance our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy generally. An inability to raise funds through deposits, borrowings, the sale of loans and/or investment securities and from other sources could have a substantial negative effect on our liquidity. Our most important source of funds consists of our customer deposits. Deposit balances can decrease for a variety of reasons, including when customers perceive alternative investments, such as the stock market, as providing a better risk/return trade-off. If customers move money out of bank deposits and into other investments, we could lose a stable source of funds. This loss would require us to seek other funding alternatives, in order to continue to grow, thereby potentially increasing our funding costs and reducing our net interest income and net income.

Other primary sources of funds consist of cash from operations and investment maturities, redemptions and sales. To a lesser extent, proceeds from the issuance and sale of securities to investors can become a source of funds. Additional liquidity is provided by wholesale funding such as brokered deposits and borrowings from the FRB, and the FHLB. We also may borrow from correspondent banks or third party lenders from time to time. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry. Economic conditions and a loss of confidence in financial institutions may increase our cost of funding or access to certain customary sources of funds, including inter-bank borrowings, repurchase agreements and borrowings from the discount window of the Federal Reserve System.

Any decline in available funding could adversely impact our ability to continue to implement our business plan, including originating loans, investing in securities, meeting our expenses or fulfilling obligations such as repaying our borrowings and meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

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. These deposits are subject to potentially dramatic fluctuations in availability or the price we must pay (in the form of interest) to obtain them due to certain factors outside our control, such as a loss of confidence by customers in us or the banking sector generally, customer perceptions of our financial health and general reputation, increasing competitive pressures from other financial services firms for consumer or corporate customer deposits, changes in interest rates and returns on other investment classes, which could result in significant outflows of deposits within short periods of time or significant changes in pricing necessary to maintain current customer deposits or attract additional deposits. 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.

We may need to raise additional capital, in the form of debt or equity securities, in the future to have sufficient capital resources to meet our commitments and fund our business needs and future growth, particularly if the quality of our assets or earnings were to deteriorate significantly. Our ability to raise additional capital, if needed, will depend on, among other things, conditions in the capital markets at that time, which are outside of our control, and our financial condition. We may not be able to obtain capital on acceptable terms or at all. Any occurrence that may limit our access to capital, such as a decline in the confidence of debt purchasers, depositors of the Bank or counterparties participating in the capital markets or other disruption in capital markets, may adversely affect our capital costs and our ability to raise capital and, in turn, our liquidity. Further, if we need to raise capital in the future, we may have to do so when many other financial institutions are also seeking to raise capital and would then have to compete with those institutions for investors. 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.

There can be no assurance that we will be able to continue to grow and to be profitable in future periods, or, if profitable, that our overall earnings will remain consistent or increase in the future. Our strategy is focused on organic growth, supplemented by opportunistic acquisitions.

Our growth requires that we increase our loans and deposits while managing risks by following prudent loan underwriting standards without increasing interest rate risk or compressing our net interest margin, maintaining more than adequate capital at all times, hiring and retaining qualified employees and successfully implementing strategic projects and initiatives. Even if we are able to increase our interest income, our earnings may nonetheless be reduced by increased expenses, such as additional employee compensation or other general and administrative expenses and increased interest expense on any liabilities incurred or deposits solicited to fund increases in assets. Additionally, if our   competitors extend credit on terms we find to pose excessive risks, or at interest rates which we believe do not warrant the credit exposure, we may not be able to maintain our lending volume and could experience deteriorating   financial performance. Our inability to manage our growth successfully or to continue to expand into new markets could have a material adverse effect on our business, financial condition or results of operations.

The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition or results of operations.

We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively affected by these laws. As a financial institution, we are susceptible to fraudulent activity, information security breaches and cybersecurity-related incidents that may be committed against us or our clients, which may result in financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation. Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting customer or employee data to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations.

Such fraudulent activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. Information security breaches and cybersecurity-related incidents may include fraudulent or unauthorized access to systems used by us or our clients, denial or degradation of service attacks, and malware or other cyberattacks. In recent periods, there continues to be a rise in electronic fraudulent activity, security breaches and cyberattacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts. Consistent with industry trends, we have also experienced an increase in attempted electronic fraudulent activity, security breaches and cybersecurity-related incidents in recent periods. Moreover, in recent periods, several large corporations, including financial institutions and retail companies, have suffered major data breaches, in some cases exposing not only confidential and proprietary corporate information, but also sensitive financial and other personal information of their customers and employees and subjecting them to potential fraudulent activity. Some of our clients may have been affected by these breaches, which could increase their risks of identity theft and other fraudulent activity that could involve their accounts with us.

We also face risks related to cyberattacks and other security breaches in connection with debit card transactions that typically involve the transmission of sensitive information regarding our customers through various third parties, including retailers and payment processors. Some of these parties have in the past been the target of security breaches and cyberattacks, and because the transactions involve third parties and environments such as the point of sale that we do not control or secure, future security breaches or cyberattacks affecting any of these third parties could affect us through no fault of our own, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them, including costs to replace compromised debit cards and address fraudulent transactions.

Information pertaining to us and our customers is maintained, and transactions are executed, on networks and systems maintained by us and certain third party partners, such as our online and cloud-based banking systems or third party services. The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect us and our customers against fraud and security breaches and to maintain our customers’ confidence. Breaches of information security also may occur, through intentional or unintentional acts by those having access to our systems or our customers’ or counterparties’ confidential information, including employees. 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. Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyberattacks and periodically test our security, our or our third party partners’ inability to anticipate, or failure to adequately mitigate, breaches of security could result in: losses to us or our customers; our loss of business and/or customers; damage to our reputation; the occurrence of additional expenses; disruption to our business; our inability to grow our online services or other businesses; additional regulatory scrutiny or penalties; or our exposure to civil litigation and possible financial liability—any of which could have a material adverse effect on our business, financial condition or results of operations.

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.

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. 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 any of our third-party service providers experience such difficulties, or if there is any other disruption in our relationships with them, we may be required to find alternative sources of such services. We are dependent on these third-party providers securing their information systems, over which we have limited control, and a breach of their information systems could adversely affect our ability to process transactions, service our clients or manage our exposure to risk and could result in the disclosure of sensitive, personal customer information, which could have a material adverse impact on our business through damage to our reputation, loss of business, remedial costs, additional regulatory scrutiny or exposure to civil litigation and possible financial liability. Assurance cannot be provided that we could negotiate terms with alternative service sources that are as favorable or could obtain services with similar functionality as found in existing systems without the need to expend substantial resources, if at all, thereby resulting in a material adverse impact on our business and results of operations.

We continually encounter technological change.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to serve customers better and to reduce costs. Our future success depends, in part, on our ability to effectively embrace technology to better serve customers and reduce costs. The Corporation may be required to expend additional resources to employ the latest technologies. Failure to keep pace with technological change could potentially have an adverse effect on our business operations and financial condition and results of operations.

Any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of artificial

intelligence (AI) could adversely affect our business, results of operations, and financial condition.

Our business increasingly relies on AI to improve our services and our customer’s experience. The regulatory framework around the development and use of these emerging technologies is rapidly evolving, and many federal, state and foreign government bodies and agencies have introduced and/or are currently considering additional laws and regulations. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business.

Any of the foregoing, together with developing guidance and/or decisions in this area, may affect our use of AI and our ability to provide

and improve our services, require additional compliance measures and changes to our operations and processes, and result in increased compliance costs and potential increases in civil claims against us. Any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of AI could adversely affect our business, results of operations, and financial condition.

We may not be able to attract and retain key personnel and other skilled employees.

We are dependent on the ability and experience of a number of key management personnel, who have substantial experience with the markets in which we offer products and services, the financial services industry, and our operations. The loss of one or more senior executives or key managers may have an adverse effect on our businesses. We maintain change in control agreements with certain executive officers to aid in our retention of these individuals. Our success depends on our ability to continue to attract, manage, and retain other qualified management personnel.

New lines of business, products, product enhancements or services may subject us to additional risks.

From time to time, we may implement new lines of business or offer new products and product enhancements as well as new services within our existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances in which the markets are not fully developed. In implementing, developing or marketing new lines of business, products, product enhancements or services, we may invest significant time and resources, but may not fully realize their expected benefits. Further, initial timetables for the introduction and development of new lines of business, products, product enhancements or services may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also affect the ultimate implementation of a new line of business or offerings of new products, product enhancements or services. Furthermore, any new line of business, product, product enhancement or service or system conversion could have a significant impact on the effectiveness of our system of internal controls. 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.

The banking and financial services industry in our market area is highly competitive. We may not be able to compete effectively in our markets, which could adversely affect our results of operations. The increasingly competitive environment is a result of changes in regulation, advances in technology and product delivery systems, and consolidation among financial service providers. 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.

We rely, in part, on the reputation of the Bank to attract customers and retain our customer relationships. Damage to our reputation could undermine the confidence of our current and potential customers in our ability to provide high-quality financial services. Such damage could also impair the confidence of our counterparties and vendors and ultimately affect our ability to effect transactions. Maintenance of our reputation depends not only on our success in maintaining our service-focused culture and controlling and mitigating the various risks described in this Annual Report on Form 10-K, but also on our success in identifying and appropriately addressing issues that may arise in areas such as potential conflicts of interest, anti-money laundering, customer personal information and privacy issues, customer and other third party fraud, record-keeping, regulatory investigations and any litigation that may arise from the failure or perceived failure of us to comply with legal and regulatory requirements. Maintaining our reputation also depends on our ability to successfully prevent third parties from infringing on the “Meridian” brand and associated trademarks and our other intellectual property. Defense of our reputation, trademarks and other intellectual property, including through litigation, could result in costs that could have a material adverse effect on our business, financial condition or results of operations.

Accounting standards periodically change and the application of our accounting policies and methods may require management to make estimates about matters that are uncertain.

The regulatory bodies that establish accounting standards, including, among others, the FASB and the SEC, periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements. The effect of such revised or new standards on our financial statements can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.

In addition, management must exercise judgment in appropriately applying many of our accounting policies and methods so they comply with generally accepted accounting principles. In some cases, management may have to select a particular accounting policy or method from two or more alternatives. In some cases, the accounting policy or method chosen might be reasonable under the circumstances and yet might result in our reporting materially different amounts than would have been reported if we had selected a different policy or method. Accounting policies are critical to fairly presenting our financial condition and results of operations and may require management to make difficult, subjective or complex judgments about matters that are uncertain.

The Corporation’s controls and procedures may fail or be circumvented.

Our management diligently reviews and updates the Corporation’s internal controls over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. Any failure or undetected circumvention of these controls could have a material adverse impact on our financial condition and results of operations.

Risks Related to Interest Rates

We must effectively manage interest rate risk.

Our earnings and cash flows are largely dependent upon our net interest income. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets. The 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. 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.

If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings.

Some competitors may offer higher interest rates than the Corporation, which could decrease the deposits that the Corporation attracts or require the Corporation to increase its rates to retain existing deposits or attract new deposits. Increased deposit competition could adversely affect the Corporation’s ability to generate the funds necessary for lending operations. As a result, the Corporation may need to seek other sources of funds that may be more expensive to obtain, which could increase the cost of funds and decrease profitability.

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. 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.

Changes in interest rates can impact the volume of mortgage originations and re-financings, thus impacting our mortgage-related revenues and profitability of our mortgage segment. A decline in mortgage rates generally increases the demand for mortgage loans as borrowers refinance, but also generally leads to accelerated payoffs. Conversely, in a constant or increasing rate environment, we would expect fewer loans to be refinanced and a decline in payoffs. Although we use models to assess the impact of interest rates on mortgage-related revenues, the estimates of revenues produced by these models are dependent on estimates and assumptions of future loan demand, prepayment speeds and other factors which may differ from actual subsequent experience.

Changes in interest rates could also reduce the value of our residential mortgage-related securities and MSRs, which could negatively affect our earnings.

The Corporation earns revenue from the fees it receives for originating mortgage loans and for servicing mortgage loans. When rates rise, the demand for mortgage loans tends to fall, reducing the revenue the Corporation receives from loan originations. At the same time, revenue from MSRs can increase through increases in fair value. When rates fall, mortgage originations tend to increase and the value of MSRs tends to decline, also with some offsetting revenue effect. Even though the origination of mortgage loans can act as a "natural hedge," the hedge is not perfect, either in amount or timing. For example, the negative effect on revenue from a decrease in the fair value of residential MSRs is immediate, but any offsetting revenue benefit from more originations and the MSRs relating to the new loans would accrue over time. It is also possible that even if interest rates were to fall, mortgage originations may also fall or any increase in mortgage originations may not be enough to offset the decrease in the MSRs value caused by the lower rates.

The Corporation typically uses derivatives and other instruments to hedge its mortgage banking interest rate risk. The Corporation generally does not hedge all of its risks and the fact that hedges are used does not mean they will be successful. Hedging is a complex process, requiring sophisticated models and constant monitoring. The Corporation could incur significant losses from its hedging activities. There may be periods where the Corporation elects not to use derivatives and other instruments to hedge mortgage banking interest rate risk.

Risks Related to Lending Activities

We must effectively manage the credit risks of our loan portfolio.

Our business depends on the creditworthiness of our customers. There are risks inherent in making loans, including risks of nonpayment, risks resulting from uncertainties of the future value of collateral, and risks resulting from changes in economic and industry conditions. We attempt to reduce our credit risk through prudent loan application, underwriting and approval procedures, including internal loan reviews before and after proceeds have been disbursed, careful monitoring of the concentration of our loans within specific industries, and collateral and guarantee requirements. These procedures cannot, however, be expected to completely eliminate our credit risks, and we can make no guarantees concerning the strength of our loan portfolio.

Nonperforming assets take significant time to resolve and adversely affect the Corporation's results of operations and financial condition .

The Corporation's nonperforming assets adversely affect its net income in various ways. The Corporation does not record interest income on nonaccrual loans, which adversely affects its income and increases credit administration costs. When the Corporation receives collateral through foreclosures and similar proceedings, it is required to mark the related asset to the then fair market value of the collateral less estimated selling costs, which may, and often does, result in a loss. An increase in the level of nonperforming assets also increases the Corporation's risk profile and may impact the capital levels regulators believe are appropriate in light of such risks. The Corporation utilizes various techniques such as workouts, restructurings, and loan sales to manage problem assets. Increases in or negative adjustments in the value of these problem assets, the underlying collateral, or in the borrowers' performance or financial condition, could adversely affect the Corporation's business, results of operations and financial condition. In addition, the resolution of nonperforming assets requires significant commitments of time from management and staff, which can be detrimental to the performance of their other responsibilities, including generation of new loans. There can be no assurance that the Corporation will avoid increases in nonperforming loans in the future.

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. 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 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. Determination of the allowance is inherently subjective as it requires significant estimates and management’s judgment of credit risks and future trends, all of which may undergo material changes. Deterioration in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require an increase in the allowance for credit losses. In addition, bank regulatory agencies periodically review our allowance and may require an increase in the provision for credit losses or the recognition of additional loan charge-offs, based on judgments different from those of management. Also, if charge-offs in future periods exceed the allowance for credit losses, we will need additional provisions to increase the allowance. 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.

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.

In addition to relying on borrowers to repay their loans and leases, we are exposed to the risk that third parties that owe us money, securities or other assets will not perform their obligations. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. A default by a significant market participant, or concerns that such a party may default, could lead to significant liquidity problems, losses or defaults by other parties, which in turn could adversely affect us.

We are also subject to the risk that our rights against third parties may not be enforceable in all circumstances. 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.

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.

Because we sell substantially all of the mortgage loans we originate, the profitability of our mortgage banking business also depends in large part on our ability to aggregate a high volume of loans and sell them in the secondary market at a gain. Thus, in addition to our dependence on the interest rate environment, we are dependent upon (i) the existence of an active secondary market and (ii) our ability to profitably sell loans or securities into that market. If our level of mortgage production declines, the profitability will depend upon our ability to reduce our costs commensurate with the reduction of revenue from our mortgage operations.

Our ability to originate and sell mortgage loans readily is dependent upon the availability of an active secondary market for single-family mortgage loans, which in turn depends in part upon the continuation of programs currently offered by GSEs and other institutional and non-institutional investors. These entities account for a substantial portion of the secondary market in residential mortgage loans. We are highly dependent on these purchasers continuing their mortgage purchasing programs. Additionally, because the largest participants in the secondary market are GNMA, FNMA and FHLMC, GSEs whose activities are governed by federal law, any future changes in laws that significantly affect the activity of these GSEs could, in turn, adversely affect our operations. Since September 2008 FNMA and FHLMC have been operating in a conservatorship setup by the U.S. government as a response to the financial crisis of 2008. The FHFA continues to carry out its responsibilities as conservator.

Our SBA lending program is dependent upon the federal government and we face specific risks associated with originating SBA loans.

Our SBA lending program is dependent upon the federal government. As an SBA Preferred Lender, we enable our clients to obtain SBA loans without being subject to the potentially lengthy SBA approval process necessary for lenders that are not SBA Preferred Lenders. The SBA periodically reviews the lending operations of participating lenders to assess, among other things, whether the lender exhibits prudent risk management. When weaknesses are identified, the SBA may request corrective actions or impose enforcement actions, including revocation of the lender’s Preferred Lender status. If we lose our status as a Preferred Lender, we may lose some or all of our customers to lenders who are SBA Preferred Lenders. Also, any changes to the SBA program, including changes to the level of guarantee provided by the federal government on SBA loans, could adversely affect our business and earnings.

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. Furthermore, even if we are able to continue originating and selling SBA 7(a) program loans in the secondary market, we might not continue to realize premiums upon the sale of the guaranteed portion of these loans. When we sell the guaranteed portion of our SBA 7(a) program loans, we incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on the non-guaranteed portion of a loan, we share any loss and recovery related to the loan pro-rata with the SBA. If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by us, the SBA may seek recovery of the principal loss related to the deficiency from us, which could adversely affect our business and earnings.

The laws, regulations and standard operating procedures that are applicable to SBA loan products may change in the future. We cannot predict the effects of these changes on our business and profitability. Because government regulation greatly affects the business and financial results of all commercial banks and bank holding companies, changes in the laws, regulations and procedures applicable to SBA loans could adversely affect our business and earnings.

Our loan servicing rights could become impaired, which may require us to take non-cash charges.

Because we retain the servicing rights on many loans we sell in the secondary market, we are required to record mortgage servicing right assets and SBA servicing right assets, which we test quarterly for impairment. 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.

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. 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. 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. In addition, we may be required to repurchase mortgage loans as a result of early payment default of the borrower on a mortgage loan, resulting in these mortgage loans being placed on our books and subjecting us to the risk of a potential default.

We are subject to environmental liability risk associated with our lending activities and with the properties we own.

In the course of our business, we may foreclose and take title to real estate and could be subject to environmental liabilities with respect to these properties. The Corporation may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or the release of hazardous or toxic substances at a property. Our policies and procedures require environmental factors to be considered during the loan application process. An environmental review is performed before initiating any commercial foreclosure action; however, these reviews may not be sufficient to detect all potential environmental hazards. Possible remediation costs and liabilities could have a material adverse effect on our financial condition.

Our business is significantly dependent on the real estate markets in which we operate, as a large percentage of our loan portfolio is secured by real estate or mortgage loans originated for sale.

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. Real property values in our market may be different from, and in some instances worse than, real property values in other markets or in the United States as a whole, and may be affected by a variety of factors outside of our control and the control of our borrowers, including national and local economic conditions, and weather related events, generally. Southeast Pennsylvania, Delaware, Maryland, southern New Jersey, and southwest Florida have experienced volatility in real estate values over the past decade. Declines in real estate values, including prices for homes and commercial properties in southeast Pennsylvania, Delaware, Maryland, southern New Jersey, and southwest Florida, could result in a deterioration of the credit quality of our borrowers, an increase in the number of loan delinquencies, defaults and charge-offs, and reduced demand for our products and services, generally.

CRE loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulations. 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, the federal banking regulatory agencies have expressed concerns about weaknesses in the current commercial real estate market. Failures in our risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which, accordingly, could have a material adverse effect on our business, financial condition and results of operations.

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. Under these contracts, the investment advisory fees paid to us are typically based on the market value of assets under management. Assets under management may decline for various reasons including declines in the market value of the assets in the funds and accounts managed, which could be caused by price declines in the securities markets generally or by price declines in specific market segments. Assets under management may also decrease due to redemptions and other withdrawals by clients or termination of contracts. This could be in response to adverse market conditions or in pursuit of other investment opportunities. If our assets under management decline and there is a related decrease in fees, it will negatively affect our results of operations.

The wealth management business is subject to extensive regulation, supervision and examination by regulators, and any enforcement action or adverse changes in the laws or regulations governing our business could decrease our revenues and profitability.

The wealth management business is subject to regulation by regulatory agencies that are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of customers participating in those markets. In the event of non-compliance with regulation, governmental regulators, including the SEC and the Financial Industry Regulatory Authority, may institute administrative or judicial proceedings that may result in censure, fines, civil money penalties, the issuance of cease-and-desist orders, the deregistration or suspension of the non-compliant introducing broker-dealer or investment adviser or other adverse consequences. 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 segment also may be adversely affected as a result of new or revised legislation or regulations. 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. Competition is strong because there are numerous well-established and successful investment management and wealth advisory firms with which we compete, including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms, and other financial companies. Many of our competitors have greater resources than we have.

Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors' investment products, our level of investment performance, our client services, our fees and marketing and distribution capabilities. If we are not successful, our results of operations and financial condition may be negatively impacted.

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. 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. 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. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, comments on the classification of our assets, and determine the level of our allowance for credit losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financial institutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Changes in such regulation and oversight, whether in the form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.

We cannot predict the effect of legislative and regulatory initiatives, which could increase our costs of doing business and adversely affect our results of operations and financial condition.

Changes to statutes, regulations, regulatory or accounting policies could affect the Corporation in substantial and unpredictable ways. Such changes could subject the Corporation to additional costs, limit the types of financial services and products the Corporation may offer, limit the fees we may charge, increase the ability of non-banks to offer competing financial services and products, change regulatory capital requirements or the required size of our allowance for credit losses and change deposit insurance assessments, any of which would negatively impact our financial condition and result of operations. Failure to comply with laws, regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputation damage, which could have a material adverse effect on the Corporation's business, financial condition and results of operations.

We are subject to capital adequacy requirements and may be subject to more stringent capital requirements.

We are subject to capital adequacy guidelines and other regulatory requirements specifying minimum amounts and types of capital that we must maintain. From time to time, the regulators change these regulatory capital adequacy and liquidity guidelines. If we fail to meet these minimum capital adequacy and liquidity guidelines and other regulatory requirements, we or our subsidiaries may be restricted in the types of activities we may conduct and we may be prohibited from taking certain capital actions, such as paying dividends and repurchasing or redeeming capital securities. See “Supervision and Regulation—Regulatory Capital Requirements” for more information on the capital adequacy standards that we must meet and maintain.

The failure to meet applicable regulatory capital requirements could result in one or more of our regulators placing limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could affect customer and investor confidence, our costs of funds and level of required deposit insurance assessments to the FDIC, our ability to pay dividends on our capital stock, our ability to make acquisitions, and our business, results of operations and financial conditions, generally.

General Risk Factors

Our stock price, like many of our peers, may be volatile, and you could lose part or all of your investment as a result.

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;

• 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.

Certain banking laws and certain provisions of our articles of incorporation may have an anti-takeover effect.

Provisions of federal banking laws, including regulatory approval requirements, could make it difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our shareholders. Acquisition of 10% or more of any class of voting stock of a bank holding company or depository institution, generally creates a rebuttable presumption that the acquirer “controls” the bank holding company or depository institution. Also, a bank holding company must obtain the prior approval of the Federal Reserve before, among other things, acquiring direct or indirect ownership or control of more than 5% of the voting shares of any bank, including the Bank.

There also are provisions in our articles of incorporation and our bylaws, such as limitations on the ability to call a special meeting of our shareholders, that may be used to delay or block a takeover attempt. In addition, our board of directors are be authorized under our articles of incorporation to issue shares of our preferred stock, and determine the rights, terms conditions and privileges of such preferred stock, without shareholder approval. These provisions may effectively inhibit a non-negotiated merger or other business combination, which, in turn, could have a material adverse effect on the market price of our common stock.

Natural disasters, acts of war or terrorism, outbreaks or escalations of hostilities and other external events could negatively impact the Corporation.

Natural disasters, acts of war or terrorism, outbreaks or escalations of hostilities, the emergence of widespread health emergencies or pandemics and other adverse external events could have a significant impact on the Corporation's ability to conduct business. In addition, such events could affect the stability of the Corporation's deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue and/or cause the Corporation to incur additional expenses. We have established disaster recovery policies and procedures that are expected to support our operations if events related to natural or man-made disasters occur; however, the occurrence of any such event and the impact of an overall economic decline resulting from such a disaster could have a material adverse effect on the Corporation's financial condition and results of operations.

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. 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.

Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes. 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. 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.

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, 2025 and 2024.

Provision and allowance for credit losses

The ACL is a valuation reserve established and maintained by charges against operating income. 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 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. Our reasonable and supportable forecast is for a period of four quarters. For periods beyond our one-year forecast, we revert to historical loss rates over one quarter. Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of estimated credit losses on loans and the appropriateness of the ACL could change significantly. It is challenging to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.

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.

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.

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.

Key Performance Ratios

The following table presents key financial performance ratios for the periods indicated:

Year Ended December 31,

Return on average assets

Return on average equity

Net interest margin (tax effected yield)

Basic earnings per share

Diluted earnings per share

The following table presents certain key period-end balances and ratios at the dates indicated:

(dollars in thousands, except per share amounts)

December 31,

December 31,

Book value per common share

Tangible book value per common share (1)

Allowance as a percentage of loans and leases held for investment

Allowance as a percentage of loans and leases held for investment (excl. loans at fair value) (1)

Tier I capital to risk weighted assets - Corporation

Tangible common equity to tangible assets ratio (1)

Loans and other finance receivables, net of fees and costs

Total assets

Total stockholders’ equity

(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for Non-GAAP to GAAP reconciliation.

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, 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. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.

Analyses of Interest Rates and Interest Differential

The tables below present the major asset and liability categories on an average daily balance basis for the periods presented, along with interest income, interest expense and key rates and yields on a tax equivalent basis.

For the Year Ended December 31,

(dollars in thousands)

Average Balance

Interest Income/ Expense

Yields/ Rates

Average Balance

Interest Income/ Expense

Yields/ Rates

Assets:

Cash and cash equivalents

Investment securities - taxable

Investment securities - tax exempt (1)

Loans held for sale

Loans held for investment (1)

Total loans

Total interest-earning assets

Noninterest earning assets

Total assets

Liabilities and stockholders' equity:

Interest-bearing demand deposits

Money market and savings deposits

Time deposits

Total interest - bearing deposits

Borrowings

Subordinated debentures

Total interest-bearing liabilities

Noninterest-bearing deposits

Other noninterest-bearing liabilities

Total liabilities

Total stockholders' equity

Total stockholders' equity and liabilities

Net interest income and spread (1)

Net interest margin (1)

(1) Yields and net interest income are reflected on a tax-equivalent basis.

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. 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

Investment securities - taxable

Investment securities - tax exempt (1)

Loans held for sale

Loans held for investment (1)

Total loans

Total interest income

Interest expense:

Interest-bearing demand deposits

Money market and savings deposits

Time deposits

Total interest - bearing deposits

Borrowings

Subordinated debentures

Total interest expense

Interest differential

(1) Yields and net interest income are reflected on a tax-equivalent basis.

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. 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. 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.

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%. 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.

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.

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. 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 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. The overall impact to the ACL from the model upgrade, before applying qualitative adjustments, was not considered material.

NON-INTEREST INCOME

The following table presents the components of non-interest income for the periods indicated:

Year Ended December 31,

(Dollars in thousands)

$ Change

% Change

Mortgage banking income

Wealth management income

SBA loan income

Earnings on investment in life insurance

Net gain on sale of MSRs

Net (loss) gain on sale of loans

Net change in the fair value of derivative instruments

Net change in the fair value of loans held-for-sale

Net change in the fair value of loans held-for-investment

Net (loss) on hedging activity

Net gain (loss) on sale of investments AFS

Other

Total non-interest income

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. Year over year there was a $2.0 million increase in SBA loan sale income, an increase in wealth management revenue of $581 thousand, as well as an increase of $1.1 million overall in changes in fair values. 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. The $581 thousand increase in wealth management revenue was due to increased assets under management and better market conditions in general year over year. The $1.1 million increase in the changes in fair values was due to a $343 thousand increase in the fair value of derivative instruments, a $335 thousand increase in fair value of loans held-for-sale, and a $445 thousand increase in the fair value of loans held-for-investment.

Offsetting these increases in non-interest income was a $3.6 million decrease in the net gain on sale of MSRs, a decline in net gains on sale of non-SBA related loans, and a decline on other non-interest income. For the year-ended December 31, 2024 a gain of $4.0 million was recorded on the sale of $6.6 million in residential loan servicing rights, while for the year-ended December 31, 2025 there were sales of $979 thousand in residential loan servicing rights. The sale of non-SBA loans resulted in a net loss of $434 thousand for the year-ended December 31, 2025, compared to a net gain of $15 thousand for the year-ended December 31, 2024. These sales included a $25.0 million portion of the residential mortgage portfolio that was sold at the end of 2025 and a $440 thousand sale of a commercial loan in the third quarter of 2025. Other non-interest income decreased $1.8 million due to smaller decreases in several miscellaneous income types.

NON-INTEREST EXPENSE

The following table presents the components of non-interest expense for the periods indicated:

Year Ended December 31,

(Dollars in thousands)

$ Change

% Change

Salaries and employee benefits

Occupancy and equipment

Professional fees

Data processing and software

Advertising and promotion

Pennsylvania bank shares tax

Other

Total non-interest expense

Total non-interest expense increased $4.2 million, or 5.2% to $83.3 million for the year ended December 31, 2025. The main drivers of this increase were salaries and employee benefits which increased $4.0 million, data processing and software expense increased $887 thousand, advertising and promotion expense increased $584 thousand, and other non-interest expense increased by $700 thousand.

Salaries and employee benefits increased $4.0 million due to the rising costs of benefits and headcount being up for the bank and wealth segments, leading to a nearly $2.5 million increase in salaries and related benefits and taxes. There was also a nearly $1.5 million increase in incentive related expenses due to increased profitability in the current year. Data processing and software expense increased $887 thousand due an increase in customer transaction volume and a continued investment in new and innovative technology to improve back-office and customer facing systems. Advertising and promotion expense increased $584 thousand as the result of a television and digital advertising campaign that ran during 2025, combined with a higher level of charitable donations and

business development activities during the year. Other expense increased $700 thousand due to an increase in OREO expenses related to the $2.3 million increase in the OREO balance year-over-year as 4 properties were added to this balance in 2025, combined with an increase in employee related expenses and certain loan expenses.

Partially offsetting these increases was a decrease of $1.4 million in occupancy and equipment expense and a decrease in professional fees. Occupancy expense decreased year-over-year largely due to costs incurred in 2024 for the early termination of leases. Professional fees decreased $672 thousand largely due to savings realized from a change in an internal audit outsourcing and tax accounting relationships, as well as legal costs related to the mortgage segment from 2024.

INCOME TAX EXPENSE

The following table presents income tax expense and related metrics for the periods indicated:

Year Ended December 31,

(Dollars in thousands)

$ Change

% Change

Income before income taxes

Income tax expense

Effective tax rate

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 effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, and excess tax benefits from recognized stock compensation. These tax benefits are offset by the tax effect of stock-based compensation expense related to incentive stock options and a provision for state income tax expense.

We frequently analyze our projections of taxable income and make adjustments to our provision for income taxes accordingly.

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. 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. Meridian engages in the origination of residential mortgages, most typically for 1-4 family dwellings, with the intention of the Corporation to principally sell substantially all of these loans in the secondary market to qualified investors. Our loans held in portfolio are originated by our commercial and consumer loan divisions. We have a strong credit culture that promotes diversity of lending products with a focus on commercial businesses. We have no particular credit concentration. Our commercial loans have been proactively managed in an effort to achieve a balanced portfolio with no unusual exposure to one industry.

The following table presents our loans and other finance receivables portfolio at the dates indicated:

(Dollars in thousands)

December 31,

December 31,

$ Change

% Change

Mortgage loans held for sale

Real estate loans:

Commercial mortgage

Home equity lines and loans

Residential mortgage

Construction

Total real estate loans

Commercial, industrial & other finance receivables

Small business loans

Consumer

Leases, net

Loans and other finance receivables

Total loans and other finance receivables

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.

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

Home equity lines and loans

Residential mortgage

Construction

Commercial, industrial & other finance receivables

Small business loans

Consumer

Leases, net

Loans and other finance receivables

The amounts have been classified according to sensitivity to changes in interest rates as of December 31, 2025. Variance rate loans are those loans with floating or adjustable interest rates.

(dollars in thousands)

Fixed Rate

Variable Rate

Total

Commercial mortgage

Home equity lines and loans

Residential mortgage

Construction

Commercial, industrial & other finance receivables

Small business loans

Consumer

Leases, net

Loans and other finance receivables

Commercial real estate loans . Our commercial real estate loans are secured by real estate that is both owner-occupied and investor owned. Owner-occupied commercial real estate loans generally involve less risk than an investment property and are distinctly reported from non-owner occupied commercial real estate loans for measuring loan concentrations for regulatory purposes. 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. 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. 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. 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. 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. 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. Our C & I loans increased $61.6 million, or 16.8%, to $429.0 million at December 31, 2025 from $367.4 million 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.

Our 10 largest C & I relationships represented 11% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2025. 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.

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. 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.

Consumer and Personal Loans

Our consumer-lending department principally originates residential mortgage and home equity based products for our clients and prospects. These loans typically fund completely at closing. Additional products include smaller dollar personal loans and our student loan refinance product, designed to provide additional flexibility in repayment terms desired in the marketplace. 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. 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. 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. We manage our investment portfolio according to written investment policies approved by our board of directors. Investments in our securities portfolio may change over time based on our funding needs and interest rate risk management objectives. Our liquidity levels take into account anticipated future cash flows and other available sources of funds and are maintained at levels that we believe are appropriate to provide the necessary flexibility to meet our anticipated funding requirements.

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 remainder of our available-for-sale securities portfolio is invested in other securities. We regularly evaluate the composition of our investment portfolio as the interest rate yield curve changes and may sell investment securities from time to time to adjust our exposure to interest rates or to provide liquidity to meet loan demand. 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.

The following table presents the amortized cost and fair value of securities at the dates indicated:

December 31, 2025

(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

U.S. government agency MBS

U.S. government agency CMO

State and municipal securities

U.S. Treasuries

Non-U.S. government agency CMO

Corporate bonds

Total securities available-for-sale

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

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

U.S. government agency MBS

U.S. government agency CMO

State and municipal securities

U.S. Treasuries

Non-U.S. government agency CMO

Corporate bonds

Total securities available-for-sale

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

Total securities held-to-maturity

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. 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. The balance in OREO as of December 31, 2025 consisted of 4 well secured commercial properties, while the balance as of December 31, 2024 related to a well secured residential property. The balance in repossessed assets as of December 31, 2025 consisted of a billboard asset from a commercial loan relationship and repossessed equipment that collateralized leases, while the balance as of December 31, 2024 related solely to repossessed equipment.

The ratio of non-performing loans to total loans increased to 2.50% as of December 31, 2025, from 2.19% as of December 31, 2024. Total non-performing loans were $55.1 million and $45.1 million as of December 31, 2025 and December 31, 2024, respectively. 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. Included in non-performing small business loans as of December 31, 2025 and December 31, 2024, are $13.2 million and $6.5 million in SBA guarantees, respectively. Non-performing loans, net of the SBA guaranteed portion, as a percent of total loans were 1.90% and 1.87% as of December 31, 2025, and 2024, respectively.

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. 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. 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. The increase in coverage ratio was driven by several factors including: reserving for the year over year increase in non-performing loans and an increase in the baseline loss rates used in the ACL calculation for portfolios that drove the increase in non-performing loans, combined with an increase in qualitative reserve factors year-over-year.

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. The drivers of the increase related to a $1.2 million increase in SBA loan specific reserves, partially offset with a $524 thousand decline in specific reserves on commercial loans.

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. The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss.

The following table presents nonperforming assets and related ratios for the periods indicated:

(dollars in thousands)

December 31,

December 31,

Non-performing assets:

Nonaccrual loans:

Real estate loans:

Commercial mortgage

Home equity lines and loans

Residential mortgage

Construction

Total real estate loans

Commercial, industrial & other finance receivables

Small business loans (1)

Leases

Total nonaccrual loans

Other real estate owned

Repossessed assets

Total non-performing assets

Asset quality ratios:

Non-performing assets to total assets

Non-performing loans to:

Total loans and other finance receivables

Total loans and other finance receivables (excluding loans at fair value) (2)

Allowance for credit losses to:

Total loans and other finance receivables

Total loans and other finance receivables (excluding loans at fair value) (2)

Non-performing loans

Total loans and leases

Total loans and other finance receivables

Total loans and other finance receivables (excluding loans at fair value)

Allowance for credit losses

(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.

(2) The allowance for credit losses to total loans held-for-investment (excluding loans at fair value) ratio is a non-GAAP financial measure. 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.

(dollars in thousands)

December 31,

% of Loan Type to Total Loans

December 31,

% of Loan Type to Total Loans

Commercial mortgage

Home equity lines and loans

Residential mortgage

Construction

Commercial, industrial & other finance receivables

Small business loans

Leases

Total

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

Residential mortgage

Construction

Commercial, industrial & other finance receivables

Small business loans

Consumer

Leases

Total Net Charge-offs

Deposits

The following table presents the major categories of deposits at the dates indicated:

(Dollars in thousands)

December 31,

December 31,

$ Change

% Change

Noninterest-bearing deposits

Interest-bearing deposits:

Interest-bearing demand deposits

Money market and savings deposits

Time deposits

Total interest-bearing deposits

Total deposits

Total deposits were $2.2 billion as of December 31, 2025, up $152.8 million, or 7.6%, from December 31, 2024. 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. 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.

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

Over 3 months through 6 months

Over 6 months through 12 months

Over 12 months

Total

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. 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.

On February 28, 2023, the Corporation approved and declared a two-for-one stock split in the form of a 100% stock dividend, payable March 20, 2023, to shareholders of record as of March 14, 2023. Under the terms of the stock split, the Corporation’s shareholders received a dividend of one share for every share held on the record date. The par value of the Corporation's stock was not affected by the split and remained at $1.00 per share. All share and per share amounts reported in the consolidated financial statements have been adjusted to reflect the two-for-one stock split effective February 28, 2023.

Non-GAAP Financial Measures

Meridian believes that non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate performance trends and the adequacy of common equity. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for performance and financial condition measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Meridian’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The tables below provides the non-GAAP reconciliation for the Corporation’s pre-provision net revenue.

Year Ended

(dollars in thousands)

December 31,

December 31,

Income before income tax expense

Provision for credit losses

Pre-provision net revenue

Year Ended

(dollars in thousands)

December 31,

December 31,

Bank

Wealth

Mortgage

Pre-provision net revenue

The table below provides the non-GAAP reconciliation for the Corporation’s tangible common equity ratio and tangible book value per common share.

(dollars in thousands)

December 31,

December 31,

Total stockholders' equity (GAAP)

Less: Goodwill and intangible assets

Tangible common equity (non-GAAP)

Total assets (GAAP)

Less: Goodwill and intangible assets

Tangible assets (non-GAAP)

Stockholders' equity to total assets (GAAP)

Tangible common equity to tangible assets (non-GAAP)

Shares outstanding

Book value per share (GAAP)

Tangible book value per share (non-GAAP)

The following is a reconciliation of the allowance for credit losses to loans and other finance receivables ratio at December 31, 2025. This is considered a non-GAAP measure as the calculation excludes the impact of loans held for investment that are fair valued as these loan types are not included in the allowance for credit losses calculation.

(dollars in thousands)

December 31,

December 31,

Allowance for credit losses (GAAP)

Loans and other finance receivables (GAAP)

Less: Loans at fair value

Loans and other finance receivables, excluding loans at fair value (non-GAAP)

ACL to loans and other finance receivables (GAAP)

ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP)

Liquidity

Management maintains liquidity to meet depositors’ needs for funds, to satisfy or fund loan commitments, and for other operating purposes. Meridian’s foundation for liquidity is a stable and loyal customer deposit base, cash and cash equivalents, and a marketable investment portfolio that provides periodic cash flow through regular maturities and amortization or that can be used as collateral to secure funding. In addition, as part of its liquidity management, Meridian maintains a portion of commercial loan assets that are comprised of SNCs, which have a national market and can be sold in a timely manner. 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.

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. 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. 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. 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.

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. 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.

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.

Under federal banking laws and regulations, Meridian is required to maintain minimum capital as determined by certain regulatory ratios. Capital adequacy for regulatory purposes, and the capital category assigned to an institution by its regulators, may be determinative of an institution’s overall financial condition. Under the final capital rules that became effective as of January 1, 2019, a capital conservation buffer is fully phased in at 2.5%.

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. Section 201 of the Regulatory Relief Act instructed the federal banking regulators to establish a single CBLR of between 8 and 10%. The Bank adopted this framework in 2020. 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%. 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.