Meridian Corp

Previous wording

Meridian Corporation may from time to time make written or oral “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; legislation affecting the financial services industry as a whole, and Meridian Corporation, in particular; changes in accounting policies, practices or guidance; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements.

Current wording

Meridian Corporation may from time to time make written or oral “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; the impact of uncertain or changing political conditions or any current or future federal government shutdown and uncertainty regarding the federal government's debt limit; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; legislation affecting the financial services industry as a whole, and Meridian Corporation, in particular; changes in accounting policies, practices or guidance; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements.

Previous 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.

Current wording

The following items highlight the Corporation’s changes in its financial condition as of September 30, 2025 compared to December 31, 2024 and the results of operations for the three and nine months ended September 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 $125.1 million, or 5.2%, to $2.5 billion as of June 30, 2025.

Current wording

•Total assets increased $155.3 million, or 6.5%, to $2.5 billion as of September 30, 2025.

Previous 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.

Current wording

•The Corporation earned net income of $14.7 million during the nine months ended September 30, 2025 and returned $4.2 million of capital to Meridian shareholders during the nine months ended September 30, 2025 through a $0.125 dividend per share in each of the first three quarters of the year.

Previous 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.

Current wording

•Net income was $6.7 million, or $0.58 per diluted share, up $1.9 million, or 40.4%, driven by higher net 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 0.90% and 12.68%, respectively, for the second quarter 2025, compared to 0.58% and 8.25%, respectively, for the second quarter 2024.

Current wording

•The return on average assets and return on average equity were 1.04% and 14.42%, respectively, for the third quarter 2025, compared to 0.80% and 11.41%, respectively, for the third quarter 2024.

Previous wording

•Net interest income increased $7.5 million, or 22.4%, to $40.9 million and the net interest margin increased to 3.50% from 3.08%, largely due to the impact of deposit and borrowing cost declines over the period.

Current wording

•Net interest income increased $4.9 million, or 26.7%, to $23.1 million and the net interest margin increased to 3.77% from 3.20%, due to the impact of deposit and borrowing cost declines as well as the in increase in average noninterest-bearing deposits over the period.

Previous 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.

Current wording

•The overall provision for credit losses increased $568 thousand when comparing the third quarter 2025 to the third quarter 2024. While net-charge offs were down over this period, the increase in provision was driven by providing for loan growth, an increase in non-performing loans, and adjusting for macro-economic impacts due to the current economic and market uncertainty.

Previous wording

Six Month Results of Operations - June 30, 2025 Compared to the Same Period in 2024

Current wording

Nine Month Results of Operations - September 30, 2025 Compared to the Same Period in 2024

Previous wording

•Net income was $8.0 million, or $0.70 per diluted share, an increase of $2.0 million, or 33.1%, driven by a higher level of net interest income and non-interest income, offset somewhat by a higher provision for credit losses and higher non-interest expense.

Current wording

•Net income was $14.7 million, or $1.28 per diluted share, an increase of $3.9 million, or 36.3%, driven by a higher level of 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 0.66% and 9.16%, respectively, for the six months ended June 30, 2025, compared to 0.53% and 7.50%, respectively, for the six months ended June 30, 2024.

Current wording

•The return on average assets and return on average equity were 0.79% and 10.98%, respectively, for the nine months ended September 30, 2025, compared to 0.62% and 8.84%, respectively, for the nine months ended September 30, 2024.

Previous 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.

Current wording

•Net interest income increased $12.4 million, or 23.9%, to $64.1 million and the net interest margin increased to 3.59% from 3.12%, largely due to the impact of deposit and borrowing cost declines as well as the in increase in average noninterest-bearing deposits over the period.

Previous 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.

Current wording

•Non-interest income increased $506 thousand, or 1.8%, to $28.6 million driven by a $1.9 million increase in SBA loan income, a $415 thousand net gain on sale of MSRs, and a $429 thousand increase in wealth management income, partially offset by a $459 thousand decline in mortgage banking income, and an overall $1.8 million decline in other non-interest income.

Previous 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.

Current wording

•Non-interest expense increased $3.9 million, or 6.8%, to $61.6 million due to a $3.3 million increase in salaries and employee benefits, and an increase of $523 thousand in other non-interest expense, partially offset by a decrease of $614 thousand in professional fees.

Previous 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.

Current wording

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

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 nine months ended September 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 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.

Current wording

For the three months ended September 30, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $2.8 million as favorable volume changes contributed $2.9 million to interest income, partially offset by rate changes that had a $110 thousand unfavorable impact on interest income. The loans held for investment average balances increased $149.1 million, leading to a favorable volume impact on interest income of $2.8 million, while the decrease in loans held for sale average balances of $13.9 million had a small unfavorable impact on interest income of $224 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($69.2 million), home equity lines and loans ($18.1 million), commercial and industrial loans ($26.1 million), and construction loans ($51.8 million). The change in rates led to decreased yields on loans held for sale (down 7 basis points) and loans held for investment (down 6 basis points) that unfavorably impact interest income by $178 thousand, overall.

Previous 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.

Current wording

On the funding side, overall interest expense decreased $2.1 million, largely driven by the a continuation in the decline of the cost of deposits and borrowings driven by the Fed's rates cuts over the last year. The cost of deposits were down across the board, leading to a $1.9 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 117 basis points, 78 basis points and 70 basis points, respectively. These deposit cost declines were partially offset by overall volume increases as the average balances on money market and savings accounts increased $173.5 million, and the average balances on interest-bearing demand deposits increased $40.8 million, while time deposit average balances decreased $37.7 million.

Previous wording

The cost of borrowings decreased by 8 basis points, while the cost of subordinated debentures increased 243 basis points as the $40 million in 2019 Debentures converted to a floating rate instrument as of December 31, 2024, contributing a $304 thousand increase to interest expense. Borrowing balances decreased $12.7 million on average.

Current wording

The cost of borrowings decreased by 13 basis points, while the cost of subordinated debentures increased 239 basis points as the $40 million in 2019 Debentures converted to a floating rate instrument as of December 31, 2024, contributing a $303 thousand increase to interest expense. Borrowing balances decreased $36.4 million on average.

Previous wording

Overall, the $7.5 million increase in net interest income over this period was driven by both rate and volume changes.

Current wording

Overall, the $4.9 million increase in net interest income over this period was primarily driven by rate changes and secondarily through volume changes.

Previous wording

For the six months ended June 30, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $4.7 million as favorable volume changes contributed $5.4 million to interest income, partially offset by rate changes that had a $700 thousand unfavorable impact on interest income. The loans held for investment average balances increased $118.3 million, leading to a favorable volume impact on interest income of $4.2 million. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($79.8 million), commercial and industrial loans ($36.0 million), construction loans ($14.8 million), and home equity lines and loans ($16.5 million). The change in rates led to decreased yields on loans held for sale (down 23 basis points) and loans held for investment (down 5 basis points) that unfavorably impact interest income by $791 thousand, overall.

Current wording

For the nine months ended September 30, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $7.5 million as favorable volume changes contributed $8.3 million to interest income, partially offset by rate changes that had a $809 thousand unfavorable impact on interest income. The loans held for investment average balances increased $128.7 million, leading to a favorable volume impact on interest income of $7.0 million. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($76.2 million), commercial and industrial loans ($32.7 million), construction loans

Previous wording

On the funding side, overall interest expense decreased $1.6 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 $1.7 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 71 basis points, 77 basis points and 64 basis points, respectively. These deposit cost declines were partially offset by overall volume increases as the average balances on money market and savings accounts increased $152.7 million, and the average balances on interest-bearing demand deposits increased $38.7 million, while time deposit average balances decreased $37.1 million.

Current wording

On the funding side, overall interest expense decreased $4.9 million, largely driven by the impact that the Fed's rate cuts over the last year have had on the cost of deposits and borrowings. The cost of deposits were down across the board, leading to a $4.1 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 85 basis points, 73 basis points and 59 basis points, respectively. These deposit cost declines were partially offset by volume increases as the average balances on money market and savings accounts increased $157.8 million, the average balances on interest-bearing demand deposits increased $30.5 million, while time deposit average balances decreased $10.5 million.

Previous 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.

Current wording

Additionally, the cost of borrowings decreased by 13 basis points, while the cost of subordinated debentures increased 238 basis points as the $40 million in 2019 Debentures converted to a floating rate instrument as of December 31, 2024, contributing a $884 thousand increase to interest expense. Borrowings decreased $40.7 million on average.

Previous wording

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

Current wording

Overall, the $12.3 million increase in net interest income over this period was driven by both rate and volume changes.

Previous 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.

Current wording

The total provision for credit losses increased $568 thousand on a net basis for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The provision on funded loans increased $874 thousand 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. There was no provision on unfunded loan commitments for the three months ended September 30, 2025, while for the three months September 30, 2024 there was a $306 thousand provision on unfunded loan commitments.

Previous wording

The total provision for credit losses increased $3.5 million on a net basis for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The provision on funded loans increased $2.8 million over the six month comparable period in 2024 for similar reasons noted above for the three month comparable period. There was a $170 thousand provision on unfunded loan commitments for the six months ended June 30, 2025, while for the six months June 30, 2024 there was an unfunded provision reversal of $475 thousand.

Current wording

The total provision for credit losses increased $4.0 million on a net basis for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The provision on funded loans increased $3.7 million over the nine month comparable period in 2024 for similar reasons noted above for the three month comparable period. There was a $170 thousand provision on unfunded loan commitments for the nine months ended September 30, 2025, while for the nine months September 30, 2024 there was an unfunded provision reversal of $168 thousand.

Previous 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.

Current wording

Partially offsetting the overall decrease in non-interest income was an increase in SBA loan income. SBA loan income increased $887 thousand over this period as the value of SBA loans sold for the quarter-ended September 30, 2025 was $13.4 million, or 112.8%, higher than the quarter-ended September 30, 2024, while the gross margin on sale was 7.4% for the quarter-ended September 30, 2025 compared to 7.9% for the quarter-ended September 30, 2024.

Previous wording

Total non-interest income increased $1.4 million as the result of several drivers, including an increase in SBA loan income, increased wealth management income from our Meridian Wealth Partners segment, a net gain on sale of MSRs and the net change in the fair value of loans held-for-investment. These increases were partially offset by a decline in other non-interest income.

Current wording

Total non-interest income increased $506 thousand as the result of several drivers, including an increase in SBA loan income, increased wealth management income from our Meridian Wealth Partners segment, and a net gain on sale of MSRs. These increases were partially offset by a decline in other non-interest income and mortgage banking income.

Previous wording

SBA loan income increased $1.0 million over this period as the value of SBA loans sold for the six months ended June 30, 2025 was $24.0 million, or 86.9%, higher than the six months ended June 30, 2024, while the gross margin on sale was 6.8% for the six months ended June 30, 2025 compared to 8.4% for the six months ended June 30, 2024. Wealth management income increased $266 thousand as the value of the markets improved over this period. From the MSR sale discussed above, there was a net gain on sale of $415 thousand over the six month comparable period.

Current wording

SBA loan income increased $1.9 million over this period as the value of SBA loans sold for the nine months ended September 30, 2025 was $37.4 million, or 94.7%, higher than the nine months ended September 30, 2024, while the gross margin on sale was 7.0% for the nine months ended September 30, 2025 compared to 8.2% for the nine months ended September 30, 2024. Wealth management income increased $429 thousand as the value of the markets improved over this period. From the MSR sale discussed above, there was a net gain on sale of $415 thousand over the nine month comparable period.

Previous 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.

Current wording

Other non-interest income decreased $1.8 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 $2.3 million, or 12.3%, largely attributable to an increase in salaries and employee benefits and advertising and promotion expense, partially offset by a decline in occupancy and equipment expense. Salaries and employee benefits increased $1.7 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. Advertising and promotion expense increased $288 thousand as the level of business development efforts and customer focused events increased from the prior year. There was a decline of $193 thousand in occupancy and equipment expense due to the early termination of office lease space, as discussed in prior earnings filings.

Current wording

Total non-interest expense increased $1.0 million, or 4.9%, largely attributable to an increase in salaries and employee benefits and data processing and software expense, partially offset by a decline in occupancy and equipment expense. Salaries and employee benefits increased $784 thousand 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. There was a decline of $252 thousand in occupancy and equipment expense due to the early termination of office lease space, as discussed in prior earnings filings. Data processing and software expense increased $312 thousand due to an increase in customer transaction volume and the impact of Meridian's continued investment in technology.

Previous 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.

Current wording

Total non-interest expense increased $3.9 million, or 6.8%, largely attributable to an increase in salaries and employee benefits and other non-interest expense. Data processing and software expenses, along with advertising expenses increased over this period as well. Salaries and employee benefits increased $3.3 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.

Previous 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.

Current wording

Income tax expense for the three and nine months ended September 30, 2025 was $2.0 million and $4.5 million, respectively, as compared to $1.5 million and $3.4 million for the same periods in 2024. Our effective tax rates were 23.2% and 23.3% for the three and nine months ended September 30, 2025, compared to 24.1% and 24.3% 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 slightly due to the impact of lower nondeductible expense and an increase in tax-free bank owned life insurance income.

Previous 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:

Current wording

As of September 30, 2025, total assets were $2.5 billion which increased $155.3 million, or 6.5%, 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

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%.

Current wording

Total loans and other finance receivables increased $133.0 million, to $2.2 billion as of September 30, 2025, from $2.0 billion as of December 31, 2024. Overall portfolio loan growth was 6.6% since December 31, 2024, or 8.7% on an annualized basis for 2025. Commercial real estate loans increased $48.5 million, or 5.9%, construction loans increased $55.5 million, or 21.4%, SBA loans decreased $17.9 million, or 11.5% due to loan sales described above, and commercial and industrial loans increased $50.7 million, or 13.8%.

Previous 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.

Current wording

As of September 30, 2025, included within the commercial real estate loans total of $872.5 million was $282.4 million of owner-occupied commercial loans, as well as $125.0 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 $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.

Current wording

Total deposits increased $125.7 million, or 6.3%, since December 31, 2024. Total interest-bearing deposits increased $127.0 million during the period, while noninterest-bearing deposits decreased $1.2 million. 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 $33.9 million, or 4.8%, 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, 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.

Current wording

The majority of Meridian's deposit base is comprised of business deposits, 50%, with consumer deposits amounting to 14% at September 30, 2025. Municipal deposits at 13% and brokered deposits at 23% 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 September 30, 2025, 61% of business accounts and 90% 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 September 30, 2025.

Previous 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.

Current wording

Consolidated stockholders’ equity of the Corporation was $188.0 million, or 7.4% of total assets as of September 30, 2025, as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024. On October 23, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable November 17, 2025 to shareholders of record as of November 10, 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 9.32% and 9.21% at June 30, 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 9.41% and 9.21% at September 30, 2025 and December 31, 2024, respectively. The Corporation is exempt from CBLR.