Meridian Corp

Previous wording

The following items highlight the Corporation’s changes in its financial condition as of March 31, 2025 compared to December 31, 2024 and the results of operations for the three months ended March 31, 2025 compared to the same periods in 2024. More detailed information related to these highlights can be found in the sections that follow.

Current wording

The following items highlight the Corporation’s changes in its financial condition as of June 30, 2025 compared to December 31, 2024 and the results of operations for the three and six months ended June 30, 2025 compared to the same periods in 2024. More detailed information related to these highlights can be found in the sections that follow.

Previous wording

•Total assets increased $143.0 million, or 6.0%, to $2.5 billion as of March 31, 2025.

Current wording

•Total assets increased $125.1 million, or 5.2%, to $2.5 billion as of June 30, 2025.

Previous wording

•The Corporation returned $1.4 million of capital to Meridian shareholders during the three months ended March 31, 2025 through a $0.125 dividend per share.

Current wording

•The Corporation returned $2.8 million of capital to Meridian shareholders during the six months ended June 30, 2025 through a $0.125 dividend per share in each of the first two quarters of the year.

Previous wording

•Net income was $2.4 million, or $0.21 per diluted share, down $277 thousand, or 10.4%, driven by a higher provision for credit losses and lower non-interest income, offset somewhat by higher net interest income.

Current wording

•Net income was $5.6 million, or $0.49 per diluted share, up $2.3 million, or 68.1%, driven by higher net interest income and non-interest income, offset somewhat by a higher provision for credit losses and higher non-interest expense.

Previous wording

•The return on average assets and return on average equity were 0.40% and 5.57%, respectively, for the first quarter 2025, compared to 0.47% and 6.73%, respectively, for the first quarter 2024.

Current wording

•The return on average assets and return on average equity were 0.90% and 12.68%, respectively, for the second quarter 2025, compared to 0.58% and 8.25%, respectively, for the second quarter 2024.

Previous wording

•Net interest income increased $3.2 million, or 19.1%, to $19.8 million and the net interest margin increased to 3.46% from 3.09%, largely due to the impact of deposit and borrowing cost declines over the period.

Current wording

•Net interest income increased $4.3 million, or 25.6%, to $21.2 million and the net interest margin increased to 3.54% from 3.06%, largely due to the impact of deposit and borrowing cost declines over the period.

Previous wording

•The overall provision for credit losses increased $2.3 million when comparing the first quarter 2025 to the first quarter 2024. The provision increase was largely due to the impact of charge-offs, an increase in non-performing loans, combined with providing for loan growth over this period and the impact of unfavorable changes in certain macro-economic factors used in the model due to current economic and market uncertainty.

Current wording

•The overall provision for credit losses increased $3.5 million when comparing the six months ended June 30, 2025 to six months ended June 30, 2024. Similar to the increase in provision for the quarter-over-quarter period discussed above, the six month comparative period provision increase was due to the increase in non-performing loans, combined with the impact of providing for loan growth and adjusting for macro-economic impacts due to the current economic and market uncertainty.

Previous wording

•Non-interest income decreased $660 thousand, or 8.3%, to $7.3 million driven by a $241 thousand decline in mortgage banking income, a $238 thousand decline in SBA loan income, and a $977 thousand decline in other non-interest income, partially offset by an overall $564 thousand positive impact of fair value changes related to mortgage banking activities, and a $218 thousand increase in wealth management fee income.

Current wording

•Non-interest income increased $1.4 million, or 8.0%, to $18.6 million driven by a $1.0 million increase in SBA loan income, a $415 thousand net gain on sale of MSRs, a $266 thousand increase in wealth management income, along with a $192 thousand positive impact of fair value changes related to mortgage banking activities, partially offset by an overall $1.2 million decline in other non-interest income.

Previous wording

•Non-interest expense increased $569 thousand, or 3.1%, to $18.7 million due to a $812 thousand increase in salaries and employee benefits, and an increase of $414 thousand in other non-interest expense, partially offset by a decrease of $735 thousand in professional fees.

Current wording

•Non-interest expense increased $2.9 million, or 7.8%, to $40.1 million due to a $2.6 million increase in salaries and employee benefits, and an increase of $586 thousand in other non-interest expense, partially offset by a decrease of $600 thousand in professional fees.

Previous wording

•Provision For Credit Losses, or the amount added to the Allowance to provide for current expected credit losses on portfolio loans and leases;

Current wording

•Provision For Credit Losses, or the amount added to the Allowance to provide for current expected credit losses on portfolio loans and other finance receivables;

Previous wording

Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three months ended March 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.

Current wording

Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three and six months ended June 30, 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.

Previous wording

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 three months ended March 31, 2025 as compared to the same period in 2024, allocated by rate and volume. Changes in interest income and/or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.

Current wording

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 three and six months ended June 30, 2025 as compared to the same periods in 2024, allocated by rate and volume. Changes in interest income and/ or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.

Previous wording

For the three months ended March 31, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $1.9 million as favorable volume changes contributed $2.4 million to interest income, partially offset by rate changes that had a $436 thousand unfavorable impact on interest income. The loans held for investment average balances increased $95.5 million, leading to a favorable volume impact on interest income of $1.7 million, while the increase in loans held for sale average balances of $1.1 million had an small but favorable impact to interest income of $18 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($59.5 million), home equity lines and loans ($13.2 million), commercial and industrial loans ($33.5 million), and SBA loans ($5.7 million). The change in rates led to decreased yields on loans held for sale (down 11 basis points) and loans held for investment (down 4 basis points) that unfavorably impact interest income by $509 thousand, overall.

Current wording

For the three months ended June 30, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $2.7 million as favorable volume changes contributed $3.0 million to interest income, partially offset by rate changes that had a $261 thousand unfavorable impact on interest income. The loans held for investment average balances increased $140.7 million, leading to a favorable volume impact on interest income of $2.5 million, while the decrease in loans held for sale average balances of $3.2 million had a small unfavorable impact on interest income of $51 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($82.7 million), home equity lines and loans ($17.1 million), commercial and industrial loans ($35.7 million), construction loans ($22.1 million), and SBA loans ($11.3 million). The change in rates led to decreased yields on loans held for sale (down 32 basis points) and loans held for investment (down 7 basis points) that unfavorably impact interest income by $283 thousand, overall.

Previous wording

Overall, the $3.2 million increase in net interest income over this period was driven by both rate and volume changes.

Current wording

Overall, the $4.3 million increase in net interest income over this period was driven by both rate and volume changes.

Previous wording

On the funding side, overall interest expense decreased $1.2 million, largely driven by the impact that the Fed's rate cuts in the later part of 2024 have had on the cost of deposits and borrowings. The cost of deposits were down across the board, leading to a $524 thousand decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 65 basis points, 65 basis points and 45 basis points, respectively. These deposit cost declines were partially offset by volume increases as the average balances on money market and savings accounts increased $146.6 million, while time deposit average balances increased $43.4 million, and the average balances on interest-bearing demand deposits increased $11.8 million,

Current wording

On the funding side, overall interest expense decreased $2.8 million, largely driven by the impact that the Fed's rate cuts in the later part of 2024 have had on the cost of deposits and borrowings. The cost of deposits were down across the board, leading to a $2.2 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 68 basis points, 71 basis points and 54 basis points, respectively. These deposit cost declines were partially offset by volume increases as the average balances on money market and savings accounts increased $149.7 million, the average balances on interest-bearing demand deposits increased $25.3 million, while time deposit average balances increased $3.2 million.

Previous wording

Additionally, the cost of borrowings decreased by 15 basis points, while the cost of subordinated debentures increased 231 basis points as the $40 million in 2019 Debentures converted to a floating rate instrument as of December 31, 2024, contributing a $278 thousand increase to interest expense. Borrowings decreased $73.2 million on average.

Current wording

Additionally, the cost of borrowings decreased by 11 basis points, while the cost of subordinated debentures increased 237 basis points as the $40 million in 2019 Debentures converted to a floating rate instrument as of December 31, 2024, contributing a $581 thousand increase to interest expense. Borrowings decreased $42.9 million on average.

Previous wording

The total provision for credit losses increased $2.3 million on a net basis for the three months ended March 31, 2025. The provision on funded loans increased $1.8 million over the three month comparable period in 2024 driven by provisioning for loan growth and charge-offs, as well as an increase in specific reserves, mainly on small business loans and existing non-accrual loans. The increase in provision was also impacted by unfavorable changes in certain macro-economic factors used in the model due to current economic and market uncertainty. There was no provision on unfunded loan commitments for three months ended March 31, 2025, while for the three months March 31, 2024 there was an unfunded provision reversal of $508 thousand.

Current wording

The total provision for credit losses increased $1.1 million on a net basis for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The provision on funded loans increased $1.0 million over the three month comparable period in 2024 driven by provisioning for loan growth and charge-offs, as well as an increase in baseline loss rates on certain portfolios. The increase in provision was also impacted by unfavorable changes in certain macro-economic factors used in the model due to current economic and market uncertainty. There was a $170 thousand provision on unfunded loan commitments for the three months ended June 30, 2025, while for the three months June 30, 2024 there was a $34 thousand provision on unfunded loan commitments.

Previous wording

Total non-interest income decreased $660 thousand due in part to a decline in mortgage banking income from our mortgage segment. While mortgage loan originations increased $8.0 million when comparing the quarter ended March 31, 2025 to the quarter ended March 31, 2024, the sales margin declined over this period as well, leading to the decline in mortgage banking income. SBA loan income decreased $238 thousand over this period as the value of SBA loans sold for the quarter-ended March 31, 2025 was $3.4 million, or 21.7%, lower than the quarter-ended March 31, 2024, while the gross margin on sale was 8.7% for the quarter-ended March 31, 2025 compared to 8.1% for the quarter-ended March 31, 2024.

Current wording

Total non-interest income increased $2.0 million largely due to an increase in SBA loan income, a net gain on sale of MSRs, combined with an increase in mortgage banking income. SBA loan income increased $1.2 million over this period as the value of SBA loans sold for the quarter-ended June 30, 2025 was $27.4 million, or 225.6%, higher than the quarter-ended June 30, 2024, while the gross margin on sale was 6.2% for the quarter-ended June 30, 2025 compared to 8.8% for the quarter-ended June 30, 2024.

Previous wording

The net change in the fair value of loans held-for-investment improved to a gain of $170 thousand for the quarter ended March 31, 2025, compared to a loss of $175 thousand for the comparable prior year quarter, due to the impact of the changing interest rate environment and the impact this has had on loans in portfolio that are held at fair value. Other non-interest income decreased $925 thousand due to higher levels of FHLB stock dividend income, broker fees and other mortgage segment related income in the prior period, partially offset by an increase in business credit card fee income and swap fee income.

Current wording

The net change in the fair value of loans held-for-investment improved to a gain of $360 thousand for the six months ended June 30, 2025, compared to a loss of $199 thousand for the comparable prior year period, due to the impact of the changing interest rate environment and the impact this has had on loans in portfolio that are held at fair value. Other non-interest income decreased $1.2 million due to lower levels of FHLB stock dividend income, broker fees and other mortgage segment related income, partially offset by an increase in business credit card fee income and swap fee income.

Previous wording

Total non-interest expense increased $569 thousand, or 3.1%, largely attributable to an increase in salaries and employee benefits and other non-interest expense. Salaries and employee benefits increased $812 thousand due largely to overall employee merit, benefit, and tax related increases, combined with an increase in mortgage segment related commissions and other benefits. Other non-interest expense increased $414 thousand due to an increase in certain commercial and consumer related loan expenses due to portfolio growth, partially offset with a decrease in loan servicing fees resulting from the MSR sale in 2024, combined with a decline in OREO expense as a $1.7 million residential OREO property was sold in 2024 . Professional fees decreased $735 thousand over the period mainly due to the results of cost control efforts on legal and consulting fees, combined with savings realized from switching internal audit outsourcing firms.

Current wording

Total non-interest expense increased $2.9 million, or 7.8%, largely attributable to an increase in salaries and employee benefits and other non-interest expense. Salaries and employee benefits increased $2.6 million due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of 4 full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits. Other non-interest expense increased $586 thousand due to an increase in certain loan related expenses. Professional fees decreased $600 thousand over the prior period due to the results of cost control efforts on certain internal audit fees, combined with a lower level of OREO expense over the comparable period.

Previous wording

Income tax expense for the three months ended March 31, 2025 was $746 thousand, as compared to $877 thousand for the same period in 2024. Our effective tax rates were 23.7% for the three months ended March 31, 2025, compared to 24.7% for the same period in 2024. While income tax expense decreased primarily due to the decrease in income before income taxes, the effective tax rate increased due to the impact of additional nondeductible expense, partially offset by an increase in tax-free bank owned life insurance income.

Current wording

Income tax expense for the three and six months ended June 30, 2025 was $1.7 million and $2.4 million, respectively, as compared to $1.1 million and $1.9 million for the same periods in 2024. Our effective tax rates were 23.3% and 23.4% for the three and six months ended June 30, 2025, compared to 24.3% and 24.5% for the same periods in 2024. While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate decreased due to the impact of lower nondeductible expense and an increase in tax-free bank owned life insurance income.

Previous wording

As of March 31, 2025, total assets were $2.5 billion which increased $143.0 million, or 6.0%, from December 31, 2024. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:

Current wording

As of June 30, 2025, total assets were $2.5 billion which increased $125.1 million, or 5.2%, from December 31, 2024. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:

Previous wording

Portfolio loans increased $42.0 million, to $2.1 billion as of March 31, 2025, from $2.0 billion as of December 31, 2024. Overall portfolio loan growth was 2.1% since December 31, 2024, or 8.3% on an annualized basis for 2025. Commercial real estate loans increased $21.2 million, or 2.6%, construction loans increased $18.3 million, or 7.1%, SBA loans increased $5.3 million, or 3.4%, and commercial and industrial loans increased $4.6 million, or 1.3%.

Current wording

Total loans and other finance receivables increased $78.1 million, to $2.1 billion as of June 30, 2025, from $2.0 billion as of December 31, 2024. Overall portfolio loan growth was 3.9% since December 31, 2024, or 7.7% on an annualized basis for 2025. Commercial real estate loans increased $31.5 million, or 3.8%, construction loans increased $25.7 million, or 9.9%, SBA loans decreased $11.1 million, or 7.1% due to loan sales described above, and commercial and industrial loans increased $36.6 million, or 10.0%.

Previous wording

As of March 31, 2025, included within the commercial real estate loans total of $845.2 million was $272.5 million of owner-occupied commercial loans, as well as $121.5 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

Current wording

As of June 30, 2025, included within the commercial real estate loans total of $855.5 million was $275.4 million of owner-occupied commercial loans, as well as $121.4 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

Previous wording

Total deposits increased $123.4 million, or 6.2%, since December 31, 2024. Noninterest-bearing deposits and interest-bearing accounts increased $82.6 million, and $19.6 million, respectively, during the period. The increase in noninterest-bearing deposits was the result of a large late in the quarter deposit from a long-standing customer that sold a business. The deposit remained with the bank for several weeks. The increase in interest-bearing accounts was largely due to customer preference for money market deposits which carry higher interest rates than demand deposits. Time deposits decreased $13.1 million, or 1.9%, largely due to wholesale funding as customers prefer the higher term interest rates offered by these products.

Current wording

Total deposits increased $105.0 million, or 5.2%, since December 31, 2024. Noninterest-bearing deposits decreased $3.8 million, while total interest-bearing deposits increased $108.8 million during the period. The overall increase in interest-bearing accounts was largely due to customer preference for money market deposits which carry higher interest rates than demand deposits. Time deposits increased $33.5 million, or 4.7%, largely due customer preference for the higher term interest rates offered by these products.

Previous wording

The majority of Meridian's deposit base is comprised of business deposits, 52%, with consumer deposits amounting to 12% at March 31, 2025. Municipal deposits at 12% and brokered deposits at 24% provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At March 31, 2025, 56% of business accounts and 86% of consumer accounts were fully insured by the

Current wording

The majority of Meridian's deposit base is comprised of business deposits, 50%, with consumer deposits amounting to 14% at June 30, 2025. Municipal deposits at 12% and brokered deposits at 24% provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At June 30, 2025, 62% of business accounts and 81% of consumer accounts were fully insured by the FDIC. The municipal deposits are 100% collateralized and brokered deposits are 100% FDIC insured. The level of uninsured deposits for the entire deposit base was 21% at June 30, 2025.

Previous wording

Consolidated stockholders’ equity of the Corporation was $173.6 million, or 6.9% of total assets as of March 31, 2025, as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024. On April 24, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable May 19, 2025 to shareholders of record as of May 12, 2025.

Current wording

Consolidated stockholders’ equity of the Corporation was $178.0 million, or 7.1% of total assets as of June 30, 2025, as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024. On July 24, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable August 18, 2025 to shareholders of record as of August 11, 2025.

Previous wording

Under the Community Bank Leverage Ratio framework, a community banking organization that is less than $10 billion in total consolidated assets, and has limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9% can elect to report a single regulatory capital ratio. The Corporation has elected to be measured under this framework for Bank capital adequacy and had ratios of 9.30% and 9.21% at March 31, 2025 and December 31, 2024, respectively. The Corporation is exempt from CBLR.

Current wording

Under the Community Bank Leverage Ratio framework, a community banking organization that is less than $10 billion in total consolidated assets, and has limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9% can elect to report a single regulatory capital ratio. The Corporation has elected to be measured under this framework for Bank capital adequacy and had ratios of 9.32% and 9.21% at June 30, 2025 and December 31, 2024, respectively. The Corporation is exempt from CBLR.

Previous wording

The ratio of non-performing assets to total assets was 2.07% as of March 31, 2025, up from 1.90% reported as of December 31, 2024. Total non-performing loans of $52.2 million as of March 31, 2025, increased $7.1 million from $45.1 million as December 31, 2024. The changes were the result of additional risk rating downgrades leading to non-performing loan classification largely in the SBA loan portfolio and to a lesser degree in small equipment leasing and residential mortgages, partially offset the payoff of $323 thousand in SBA loans and by a $920 thousand decline in non-performing commercial loans due to an additional charge-off on a protracted commercial advertising loan relationship.

Current wording

The ratio of non-performing assets to total assets was 2.14% as of June 30, 2025, up from 1.90% reported as of December 31, 2024. Total non-performing loans of $50.5 million as of June 30, 2025, increased $5.4 million from $45.1 million as December 31, 2024. The changes were the result of risk rating downgrades leading to non-performing loan classification mainly in the SBA loan portfolio and to a lesser degree in residential mortgages, partially offset by a $4.7 million decline in non-performing commercial loans due to the repossession of a billboard on a advertising based commercial loan relationship and the foreclosure of real estate collateral from another commercial loan. The repossessed billboard was transferred into other repossessed assets with a value of $2.4 million, after adjustment for estimated costs to sell, while the foreclosed real estate from another commercial loan was transferred into OREO with a value of $719 thousand, after adjustment for estimated costs to sell.

Previous wording

Meridian realized net charge-offs of 0.14% of total average loans for the three months ending March 31, 2025, which was up slightly from 0.12% reported for the same period in 2024. Net charge-offs for the quarter ended March 31, 2025 were $2.8 million, compared to net charge-offs of $2.3 million for the quarter ended March 31, 2024. Net charge-offs for the current quarter comprised of $3.0 million in charge-offs, with $175 thousand in recoveries, and were split between commercial loans, construction loans, leases, and SBA loans.

Current wording

Meridian realized net charge-offs of 0.17% of total average loans for the three months ending June 30, 2025, which was down slightly from 0.20% reported for the same period in 2024. Net charge-offs for the quarter ended June 30, 2025 were $3.6 million, compared to net charge-offs of $4.1 million for the quarter ended June 30, 2024. Net charge-offs for the current quarter comprised of $4.0 million in charge-offs, with $380 thousand in recoveries, and were split between commercial loans, leases, and SBA loans.

Previous wording

The ratio of allowance for credit losses to total loans and other finance receivables, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.01% as of March 31, 2025 compared to 0.91% as of December 31, 2024. As of March 31, 2025 there were specific reserves of $5.0 million against non-performing loans, an increase from $2.7 million as of December 31, 2024. The increase over this period was driven by an increase in specific reserves on SBA loan, as well as smaller increases in specific reserves on commercial and commercial real estate loans.

Current wording

The ratio of allowance for credit losses to total loans and other finance receivables, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.00% as of June 30, 2025 compared to 0.91% as of December 31, 2024. As of June 30, 2025 there were specific reserves of $3.3 million against non-performing loans, a increase from $2.7 million as of December 31, 2024. The increase in ACL coverage over this period was driven by an increase in specific reserves on SBA loans and construction loans, as well as the macro-economic impact of economic and market uncertainty.

Previous wording

In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the Federal Reserve Bank of Philadelphia to meet short-term liquidity needs and has access to approximately $640.5 million in liquidity from these sources. Through its relationship at the Federal Reserve, Meridian had available credit of approximately $5.3 million at March 31, 2025. 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 March 31, 2025, Meridian’s maximum borrowing capacity with the FHLB was $698.2 million. At March 31, 2025, Meridian had borrowed $134.9 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $190.2 million against its available credit lines. At March 31, 2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $264.2 million of available short or long term funding through the CDARS program and $267.8 million of available short or long term funding through brokered CD arrangements. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.

Current wording

In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the Federal Reserve Bank of Philadelphia to meet short-term liquidity needs and has access to approximately $670.7 million in liquidity from these sources. Through its relationship at the Federal Reserve, Meridian had available credit of approximately $5.3 million at June 30, 2025. 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 June 30, 2025, Meridian’s maximum borrowing capacity with the FHLB was $710.4 million. At June 30, 2025, Meridian had borrowed $134.3 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $187.5 million against its available credit lines. At June 30, 2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $282.5 million of available short or long term wholesale funding arrangements through the CDARS/ICS one-way buy program and conventional brokered CDs. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.

Previous wording

The Banking Segment recorded income before tax of $3.6 million for the three months ended March 31, 2025, as compared to income before tax of $3.5 million for the same period in 2024. The Banking Segment provided 116.0% of the Corporation’s pre-tax profit for the three months ended March 31, 2025, as compared to 99.6% for the same periods in 2024.

Current wording

The Banking Segment recorded income before tax of $5.2 million and $8.8 million for the three and six months ended June 30, 2025, as compared to income before tax of $3.2 million and $6.7 million for the same periods in 2024. The Banking Segment provided 71.4% and 84.8% of the Corporation’s pre-tax profit for the three and six months ended June 30, 2025, as compared to 72.2% and 84.5% for the same periods in 2024.

Previous wording

The Wealth Management Segment recorded income before tax of $726 thousand for the three months ended March 31, 2025, as compared to income before tax of $478 thousand for the same period in 2024. The increase in income in this segment was the result of an increase in assets under management and improved market conditions over the period.

Current wording

The Wealth Management Segment recorded income before tax of $604 thousand and $1.3 million for the three and six months ended June 30, 2025, as compared to income before tax of $676 thousand and $1.2 million for the same periods in 2024. The increase in income in this segment for the six months ended June 30, 2025 was the result of an increase in assets under management and improved market conditions over the period.

Previous wording

The Mortgage Banking Segment recorded losses before tax of $1.2 million for the three months ended March 31, 2025, as compared to losses before tax of $465 thousand for the same period in 2024. Mortgage Banking income and expenses related to loan originations and sales increased over the comparable periods due to higher loan origination and sales volume.

Current wording

The Mortgage Banking Segment recorded income before tax of $1.5 million and $252 thousand for the three and six months ended June 30, 2025, as compared to income before tax of $545 thousand and $80 thousand for the same periods in 2024. Mortgage Banking income and expenses related to loan originations and sales increased over the comparable periods due to higher loan origination and sales volume.

Previous wording

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan agreement. Total commitments to extend credit at March 31, 2025 were $632.3 million as compared to $603.1 million at December 31, 2024.

Current wording

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan agreement. Total commitments to extend credit at June 30, 2025 were $600.0 million as compared to $603.1 million at December 31, 2024.

Previous wording

Standby letters of credit are conditional commitments issued by the Corporation to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in granting loan facilities to customers. The Corporation’s obligation under standby letters of credit at March 31, 2025 amounted to $15.4 million as compared to $15.5 million at December 31, 2024.

Current wording

Standby letters of credit are conditional commitments issued by the Corporation to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in granting loan facilities to customers. The Corporation’s obligation under standby letters of credit at June 30, 2025 amounted to $12.4 million as compared to $15.5 million at December 31, 2024.

Previous wording

In certain circumstances the Corporation may be required to repurchase residential mortgage loans from investors under the terms of loan sale agreements. Generally, these circumstances include the breach of representations and warranties made to investors regarding borrower default or early payment, as well as a violation of the applicable federal, state, or local lending laws. The Corporation agrees to repurchase loans if the representations and warranties made with respect to such loans are breached. Based on the obligations described above, the Corporation did not repurchase any loans for the three months ended March 31, 2025, while the Corporation repurchased 3 loans totaling $589 thousand for the three months ended March 31, 2024.

Current wording

In certain circumstances the Corporation may be required to repurchase residential mortgage loans from investors under the terms of loan sale agreements. Generally, these circumstances include the breach of representations and warranties made to investors regarding borrower default or early payment, as well as a violation of the applicable federal, state, or local lending laws. The Corporation agrees to repurchase loans if the representations and warranties made with respect to such loans are breached. Based on the obligations described above, the Corporation repurchased 1 loan of $425 thousand for the three and six months ended June 30, 2025, while the Corporation repurchased 1 loan and 4 loans of $281 thousand and totaling $870 thousand for the three and six months ended June 30, 2024, respectively.