Meridian Corp
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
MRBK$16.47+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-17.
0001750735-25-000011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0001750735-26-000009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 121 current paragraphs.
74 unchanged; 36 reworded; 11 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
•Total assets increased $176.1 million, or 7.4%, to $2.6 billion as of December 31, 2025.
Current report
•Portfolio loans, increased $141.4 million, or 7.0%, to $2.2 billion as of December 31, 2025.
Current report
•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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Removed paragraphs (9)
Previous report
The JOBS Act permitted us an extended transition period for complying with new or revised accounting standards affecting public companies. We have elected to take advantage of this extended transition period, which means that the financial statements included in this Annual Report, as well as any financial statements that were filed prior to this Annual Report, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period.
Previous report
•Total assets increased $139.7 million, or 6.2%, to $2.4 billion as of December 31, 2024.
Previous report
•Portfolio loans, increased $137.8 million, or 7.3%, to $2.0 billion as of December 31, 2024,
Previous report
•Non-interest income increased $9.4 million or 29.3% due largely to an improved mortgage banking environment.
Previous report
The provision for credit losses was $11.4 million for the year ended December 31, 2024, compared to a $6.8 million provision for the year ended December 31, 2023, an increase of $4.6 million. The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments. The increase in provision for funded loans of $4.4 million for the year ended December 31, 2024 was primarily due to an increase in net charge-offs year over year. While net charge-offs increased $10.3 million in 2024 over 2023, nearly half of the loans charged-off were specifically reserved for in prior periods. This increase was partially offset by the impact of favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the funded loss model. The provision for unfunded loan commitments decreased $226 thousand during the year due to favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the unfunded loss model.
Previous report
Total non-interest income increased $9.4 million as a result of higher mortgage banking revenue, the gain of $4.0 million on the sale of $6.6 million in residential loan servicing rights and an increase in wealth management revenue of $807 thousand. Mortgage banking income increased $4.5 million, due to an increase of $178.0 million, or 28.6% in mortgage loan originations, despite the higher interest rate environment and continued lack of housing inventory.
Previous report
Total non-interest expense increased $2.0 million, or 2.6% to $79.1 million for the year ended December 31, 2024. Occupancy and equipment expense increased $1.1 million overall, with $1.0 million of this increase due to fees, credits and other disposal costs for the early termination of the Blue Bell lease. The lease termination is expected to improve occupancy expense by $359 thousand per year. Professional fees increased $455 thousand as we incurred OREO related legal and professional fees as well as an increase in non-performing loan and lease workout expenses.
Previous report
Advertising and promotion expense decreased $437 thousand as the result of a decline in mortgage related advertising expense and other promotional expense. Data processing and software expense decreased $271 thousand due to volume based discounts obtained on certain transactional fees. Other expense increased $1.2 million due to increases in certain loan expenses and employee related expenses.
Previous report
Portfolio loans increased $137.8 million, or 7.3% to $2.0 billion as of December 31, 2024, from $1.9 billion as of December 31, 2023.
Reworded paragraphs (36)
Previous wording
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 judgements are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements. In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgements inherent in that policy, is critical in understanding our financial statements. Management has presented the application of this policy to the audit committee of our board of directors.
Current wording
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.
Previous wording
Beginning on January 1, 2023, we adopted ASC 326, which replaced the former incurred loss methodology with an expected credit loss methodology that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of an asset. 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.
Current wording
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.
Previous wording
•Consolidated net income increased $3.1 million, or 23.4%.
Current wording
•Consolidated net income increased $5.5 million, or 33.6%, to $21.8 million.
Previous wording
•The return on average assets and return on average equity was 0.70% and 9.93%, respectively, for the year ended December 31, 2024, compared to 0.61% and 8.53%, respectively, for the year ended December 31, 2023.
Current wording
•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.
Previous wording
•Net interest income was up $2.1 million, or 3.0% due to higher levels of earning assets.
Current wording
•Net interest income was up $16.7 million, or 23.5% due to higher volume of earning assets.
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 ACL to provide for current expected credit losses on portfolio loans and leases;
Previous wording
•Non-interest Expense, which consists primarily of salaries and employee benefits, occupancy, professional fees, advertising & promotion, data processing, information technology, loan expenses, and other operating expenses; and
Current wording
•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
Previous wording
Interest income increased $19.5 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $185.4 million, combined with a higher yield on earning assets, which increased 32 basis points. Average total loans held for investment increased $136.1 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $158.7 million on average, combined. Home equity loans and residential real estate loans held in portfolio increased $33.6 million on average, combined. Residential loans for sale increased $11.6 million on average. The average yield on loans held for investment increased 35 basis points and the yield on cash and investments increased 46 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.
Current wording
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.
Previous wording
Interest expense increased $17.4 million, year over year, due primarily to market interest rate rises, as well as an increase of $178.0 million in average interest bearing deposits. Interest expense on deposits increased $16.2 million with the cost of interest-bearing deposits increasing 56 basis points to 4.37%. Total cost of deposits increased 58 basis points reflecting a decrease of $25.4 million in average non-interest bearing deposits. Interest expense on borrowings increased $612 thousand as the cost decreased 5 basis points, and total average short-term borrowings increased $13.9 million.
Current wording
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.
Previous wording
Net interest margin decreased 19 basis points to 3.16% for the year ended December 31, 2024 from 3.35% for the year ended December 31, 2023, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the yield on earnings assets was outpaced by the increase in costs of funds, impacted also by the $25.4 million decrease in average non-interest bearing deposits.
Current wording
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.
Previous wording
SBA loan sale income decreased $1.0 million due to a decrease of $25.6 million, or 30.1%, in the volume of loans sold in 2024 compared to 2023. Despite the decline in SBA loan sales volume, the gross margin on sales in 2024 was 8.0% overall, compared to 6.7% for 2023 sales. The increase in wealth management revenue was due to increased assets under management and better market conditions in general.
Current wording
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.
Previous wording
While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate also increased. 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.
Current wording
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.
Previous wording
As of December 31, 2024, total assets were $2.4 billion which increased $139.7 million, or 6.2%, from December 31, 2023. This growth in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following section.
Current wording
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.
Previous wording
Our loan portfolio is the largest category of our interest-earning assets. As of December 31, 2024 and 2023, our total loans and leases amounted to $2.1 billion, and $1.9 billion, respectively. Our loan portfolio is comprised of loans originated to be held in portfolio, as well as residential mortgage loans originated for sale. 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.
Current wording
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.
Previous wording
The following table presents our loan and lease portfolio at the dates indicated:
Current wording
The following table presents our loans and other finance receivables portfolio at the dates indicated:
Previous wording
The following table shows the amounts of loans outstanding as of December 31, 2024 which, based on remaining scheduled repayments of principal, are due in the periods indicated:
Current wording
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:
Previous wording
The amounts have been classified according to sensitivity to changes in interest rates for amounts due after one year, as of December 31, 2024. Variance rate loans are those loans with floating or adjustable interest rates.
Current wording
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.
Previous wording
Our commercial real estate loans increased by $86.1 million, or 11.7%, to $824.0 million at December 31, 2024 from $737.9 million at December 31, 2023. Our commercial real estate loan portfolio represented 40.0% and 38.6% of our total loan portfolio at December 31, 2024 and 2023, respectively. Construction loans increased $13.1 million, or 5.3%, to $259.6 million at December 31, 2024 from $246.4 million at December 31, 2023. Construction loans represented 12.6% and 12.9% of our total loan portfolio at December 31, 2024 and 2023, respectively.
Current wording
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.
Previous wording
Commercial and Industrial Loans (C & I)
Current wording
Commercial and Industrial Loans (C & I) and Other Finance Receivables
Previous wording
We provide a variety of variable and fixed rate commercial business loans and lines of credit. These loans and lines of credit are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses. 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. The primary source of repayment for commercial business loans is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees. Our C & I loans increased $64.5 million, or 21.3%, to $367.4 million at December 31, 2024 from $302.9 million at December 31, 2023. C & I loans overall represented 17.8% and 15.8% of our total loan portfolio at December 31, 2024 and 2023, respectively.
Current wording
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.
Previous wording
Our 10 largest C & I relationships represented 13% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2024. The average loan size outstanding in C & I portfolio, excluding leases, was $413 thousand at December 31, 2024 and the weighted average risk rating of the C & I portfolio is 4.1 (pass), based on our credit rating scale of 1 through 9, where ratings 1 through 5 are considered pass.
Current wording
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.
Previous wording
We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs. Our small business loans increased by $13.4 million, or 9.4%, to $155.8 million at December 31, 2024 from $142.3 million at December 31, 2023. During 2024 we sold $59.4 million in SBA loans, a decrease of $25.6 million, or 30.1%, from $85.0 million in SBA loans sold in 2023. The small business loans portfolio represented 7.6% and 7.4% of our total loan portfolio at December 31, 2024 and 2023, respectively.
Current wording
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.
Previous wording
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 $14.4 million, or 18.9%, to $90.7 million at December 31, 2024 from $76.3 million at December 31, 2023, while residential mortgage loans decreased by $8.0 million, or 3.1%, to $252.6 million at December 31, 2024 from $260.6 million at December 31, 2023. Overall the total consumer loan portfolio represented 16.7% and 17.6% of our total loan portfolio at December 31, 2024 and 2023, respectively.
Current wording
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.
Previous wording
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 $45.6 million, or 37.5% to $76.0 million at December 31, 2024 as we continue to shift focus to commercial relationship lending.
Current wording
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.
Previous wording
As of December 31, 2024 our available-for-sale investment portfolio had a fair value of $174.3 million, with an effective tax equivalent yield of 3.72% and an estimated duration of approximately 3.8 years. The largest category of this investment portfolio, or 38.1%, consists of U.S. agency securities, along with 21.1% in municipal securities, and 8.9% in U.S. Treasury securities. 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 $2.1 million as of December 31, 2024 and 2023. As of December 31, 2024 we also had a held-to-maturity investment portfolio with amortized cost of $33.8 million.
Current wording
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.
Previous wording
The ratio of non-performing assets to total assets increased to 1.90% as of December 31, 2024, from 1.58% as of December 31, 2023. There was $159 thousand in other real estate property included in non-performing assets as of December 31, 2024 and 2023 related to a well secured residential property. Total non-performing loans were $45.1 million and $33.8 million as of December 31, 2024 and December 31, 2023, respectively. The increase in non-performing loans over the period was due to increases in non-performing construction loans, residential real estate loans, and small business loans of $6.0 million, $3.4 million, $2.8 million, respectively, partially offset by a decrease of $3.4 million in non-performing commercial loans due to a $3.5 million partial charge-off of a commercial loan relationship.
Current wording
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.
Previous wording
Meridian realized net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024, compared to net charge-offs of $5.6 million, or 0.30%, of total average loans for the year ended December 31, 2023. A majority of charge-offs for the year ended December 31, 2024 were from equipment leases, $5.9 million, commercial loans, $4.8 million, and small business loans, $4.3 million. The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 0.91% as of December 31, 2024 compared to 1.17% as of December 31, 2023. The decline in this coverage ratio was largely impacted by net charge-offs of individually evaluated loans of $4.8 million and $4.2 million in the commercial and industrial loan, and small business loan portfolios, respectively, combined with the decline in ACL on leases as we continue to refocus away from lease originations.
Current wording
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.
Previous wording
As of December 31, 2024 there were specific reserves of $2.7 million against individually evaluated loans, a decrease from $6.5 million as of December 31, 2023. The drivers of the decrease related to a $2.9 million decrease in a commercial loan relationship specific reserve due to the charge-off note above, combined with a decline of $1 million in SBA loan specific reserves.
Current wording
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.
Previous wording
Total deposits were $2.0 billion as of December 31, 2024, up $181.9 million, or 10.0%, from December 31, 2023. Non-interest bearing deposits increased $1.6 million, or 0.7%, from December 31, 2023. Interest-bearing demand deposits decreased $9.5 million, or 6.3%, from December 31, 2023, while money market accounts/savings accounts increased $165.7 million, or 22.2%, during the period. Business accounts comprised 50% of all deposits, consumer accounts and municipal deposits comprised 13% and 12%, respectively, and wholesale funding was approximately 25%. Wholesale funding supports loan growth as business accounts from lending relationships tend to lag and wholesale funding can easily be managed through term.
Current wording
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.
Previous wording
Consolidated stockholders’ equity of the Corporation was $171.5 million, or 7.2% of total assets as of December 31, 2024 as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023. The increase in stockholders’ equity is the result of year-to-date net income of $16.3 million, and comprehensive income of $1.3 million, partially offset by dividends paid of $5.6 million, and $456 thousand in stock-based compensation and stock options exercised.
Current wording
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.
Previous wording
The tables below provides the non-GAAP reconciliation for the Corporation’s pre-tax, pre-provision income.
Current wording
The tables below provides the non-GAAP reconciliation for the Corporation’s pre-provision net revenue.
Previous wording
The following is a reconciliation of the allowance for credit losses to total loans held for investment ratio at December 31, 2024. 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.
Current wording
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.
Previous wording
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 $315.8 million at December 31, 2024, compared to $273.4 million at December 31, 2023, includes investments, SNCs, Federal funds sold, mortgages held-for-sale and cash and cash equivalents, less the amount of securities required to be pledged for certain liabilities. Meridian also anticipates scheduled payments and prepayments on its loan and mortgage-backed securities portfolios.
Current wording
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.
Previous wording
In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the FRB to meet short-term liquidity needs. Through its relationship at the FRB, Meridian had available credit of approximately $5.4 million at December 31, 2024. At December 31, 2024, Meridian had $0 in borrowings from the Federal Reserve. As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of December 31, 2024, Meridian’s maximum borrowing capacity with the FHLB was $699.3 million. At December 31, 2024, Meridian had borrowed $119.5 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $183.5 million against its available credit lines. At December 31, 2024, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $242.5 million of available short or long term funding through the CDARS program and $334.6 million of available short or long term funding through brokered CD arrangements. 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 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.
Previous wording
At December 31, 2024, Meridian had $618.6 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, 2024 totaled $411.2 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, 2024, Meridian had a reserve for unfunded loan commitments of $817 thousand.
Current wording
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.
Previous wording
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%. The Bank’s CBLR was 9.21% and 9.46% as of December 31, 2024 and 2023, respectively, but reports all ratios for comparative purposes.
Current wording
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%. The Bank’s CBLR was 9.50% and 9.21% as of December 31, 2025 and 2024, respectively, but reports all ratios for comparative purposes.