Meridian Corp
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 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-Q
Period ended 2026-03-31; filed 2026-05-11.
0001750735-26-000050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001750735-26-000063
Item 2. 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 98 previous paragraphs and 113 current paragraphs.
52 unchanged; 37 reworded; 19 added; 9 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 15 previous and 16 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 (19)
Current report
•Portfolio loans increased $7.9 million, or 0.4%, to $2.2 billion as of June 30, 2026.
Current report
•Total deposits increased $36.3 million or 1.7% to $2.2 billion as of June 30, 2026.
Current report
•The overall provision for credit losses decreased $835 thousand when comparing the second quarter 2026 to the second quarter 2025. The provision on funded loans decreased $840 thousand over the three month comparable period in 2025 driven largely by a decrease of $940 thousand in charge-offs over this period, combined with a lower level of loan growth as well.
Current report
•Non-interest expense increased $870 thousand, or 4.1%, to $22.2 million due to largely to an increase of $312 thousand in data processing and software expense, a $135 thousand increase in occupancy and equipment expense, combined with a $392 thousand increase in other non-interest expense.
Current report
•Net income was $7.8 million, or $0.64 per diluted share, down $178 thousand, or 2.2%, driven by an increase in the provision for credit losses, a decrease in non-interest income, and an increase in non-interest expense.
Current report
•Net interest margin increased to 3.75% from 3.50% due to the impact of a reduction in deposit and borrowing costs outpacing the decreased yield on interest earnings assets, mainly loans.
Current report
•The overall provision for credit losses increased $1.4 million when comparing the six months ended June 30, 2026 to June 30, 2025, due to an increase in charge-offs, combined with providing for loan growth and an increase in certain loss factors.
Current report
•Non-interest income decreased $1.7 million, or 9.1%, to $16.9 million driven by a $2.0 million decrease in SBA loan income, and an overall $1.0 million negative impact of fair value changes related to mortgage banking activities. These changes were partially offset by a $1.5 million increase in mortgage banking income, and a $408 thousand increase in wealth management fee income.
Current report
For the three months ended June 30, 2026 as compared to the same period in 2025, tax-equivalent interest income decreased $430 thousand as favorable volume changes contributed $1.4 million to interest income, but this was offset by a $1.8 million unfavorable change in rates. The unfavorable change in rates led to a 32 basis point decline in the yield on loans held for investment, which had a $1.7 million unfavorable impact on interest income. Nearly half of this decline, $885 thousand or 14 bps, was due to the impact of interest reversal on loans that were placed on nonaccrual during the quarter. The loans held for investment average balances increased $67.5 million, leading to a favorable volume impact on interest income of $1.2 million, while the increase in loans held for sale average balances of $9.1 million had a small but favorable impact to interest income of $138 thousand. Growth in the loans held for investment portfolio was led by average balance increases in construction loans ($56.7 million), commercial real estate ($26.9 million), commercial loans ($26.9 million), and home equity loans ($13.9 million), partially offset by a decline in the average balance of residential real estate loans of ($21.1 million), and a decline of ($31.7 million) in the average balance of small business loans.
Current report
Overall, the $1.6 million increase in net interest income over this period was attributable largely to rate changes as unfavorable rate changes in interest-earning assets were offset by favorable rate changes on interest-bearing liabilities.
Current report
On the funding side, overall interest expense decreased $3.9 million. Interest expense on deposits decreased $3.2 million as the cost of all deposit types decreased. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 38 basis points, 61 basis points and 49 basis points, respectively, while the cost of borrowings decreased by 19 basis points as well. From a volume perspective, money market/savings account average balances increased $88.2 million, while time deposit average balances increased $28.1 million, and the average balance on interest-bearing demand deposits decreased $6.2 million, and borrowings decreased $21.5 million on average.
Current report
Overall, the $5.1 million increase in net interest income over this period was driven by rate changes as the drop in cost of interest bearing liabilities outpaced the decrease in the yield on interest earning assets.
Current report
Three and Six Months Ended June 30, 2026 Compared to the Same Periods in 2025
Current report
The total provision for credit losses increased $1.4 million on a net basis for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The provision on funded loans increased $1.4 million over the six month comparable period in 2025 as there was an increase of $4.2 million in charge-offs over this period, with $3.9 million of the increase in charge-offs coming from a loan participated to us by another financial institution that became non-performing in the first quarter of 2026. The provision increase was also partially due to providing for loan growth over the six month comparable periods and an increase in certain loss factors that are part of the ACL calculation. There was a $230 thousand provision on unfunded loan commitments for the six months ended June 30, 2026, while for the six months June 30, 2025 there was an unfunded provision of $170 thousand.
Current report
Total non-interest income decreased $1.7 million, despite a $1.5 million increase in mortgage banking over the six month comparable period. While there was with a 6 basis point decrease in the sales margin, the volume of residential mortgage loans sold increased by $54.3 million, or 15%, over the six month comparable period. Wealth management income improved $408 thousand, or 13.5%, as the amount of assets under management as of June 30, 2026 was up 9.2% since December 31, 2025. SBA loan income decreased $2.0 million over this period as the volume of SBA loans sold for the six months ended June 30, 2026 declined $33.1 million, or 64.0%, compared to the six months ended June 30, 2025, while the gross margin on sale was 8.1% for the six months ended June 30, 2026 compared to 6.8% for the six months ended June 30, 2025.
Current report
Included in the six months ended June 30, 2025 was the sale of $979 thousand in MSRs that resulted in a net gain on sale of $415 thousand, compared to a net loss on sale of MSRs of $159 thousand was recorded during the six months ended June 30, 2026.
Current report
Total non-interest expense increased $870 thousand, or 4.1%, as the result of increases in occupancy and equipment expense, data processing and software expense, and other non-interest expense. Occupancy and equipment expenses were up $135 thousand related to the opening of Meridian's first full-service branch in Bonita Springs, Florida which occurred late in 2025. Data processing and software expense increased $312 thousand over the three month comparable period as Meridian invests in technology at the customer and employee level to improve to continuously improve on the efficiency and security of the systems we use, combined with an increase in customer transaction volume. Other expense increased $392 thousand mainly due to an increase in OREO expenses and non-salary employee expenses in the current quarter.
Current report
Income tax expense for the three and six months ended June 30, 2026 was $1.7 million and $2.3 million, respectively, as compared to $1.7 million and $2.4 million for the same periods in 2025. Our effective tax rates were 22.4% and 22.4% for the three and six months ended June 30, 2026, compared to 23.3% and 23.4% for the same periods in 2025. The reduction in the three and six months tax rates in comparing 2025 to 2026 is primarily the result of increased stock compensation tax benefits recognized in 2026 as well as higher income from BOLI policies.
Current report
(2) Subsequent to June 30, 2026, a property in OREO valued at $719 thousand sold for a recorded gain of $218 thousand.
Removed paragraphs (9)
Previous report
•Portfolio loans increased $11.1 million, or 0.5%, to $2.2 billion as of March 31, 2026.
Previous report
•Total deposits increased $11.8 million or 0.5% to $2.2 billion as of March 31, 2026.
Previous report
•The overall provision for credit losses increased $2.3 million when comparing the first quarter 2026 to the first quarter 2025. The increase of $4.9 million in net charge-offs over this period was the driver for the increase in provision for credit losses, and was led by a $3.9 million charge-off taken during the first quarter 2026 on a loan purchase participation from another financial institution.
Previous report
(1)Yields and net interest income are reflected on a tax-equivalent basis.
Previous report
(1)Yields and net interest income are reflected on a tax-equivalent basis.
Previous report
The cost of borrowings decreased by 14 basis points, while the cost of subordinated debentures decreased 49 basis points as the interest rate on the $40 million in floating rate 2019 Debentures was lower in the current quarter, contributing a $60 thousand decrease to interest expense. Borrowing balances decreased $11.6 million on average.
Previous report
Overall, the $3.4 million increase in net interest income over this period was primarily driven by rate changes and secondarily through volume changes.
Previous report
Income tax expense for the three months ended March 31, 2026 was $582 thousand, as compared to $746 thousand for the same period in 2025. Our effective tax rate was 22.5% for the three months ended March 31, 2026, compared to 23.7% for the same period in 2025. While income tax expense decreased primarily due to the decrease in income before income taxes, the effective tax rate decreased slightly due to the impact of tax expense recognized in the prior-quarter related to the surrender of certain bank owned life insurance policies.
Previous report
On February 20, 2025 the Corporation entered into an Equity Distribution Agreement (or Sales Agreement) relating to shares of our common stock. During 2025 the Corporation sold a total of 488,478 shares of common stock and raised approximately $7.5 million in net proceeds. We expect to use the net proceeds for general corporate purposes, which includes working capital and the funding of organic growth at Meridian Bank, as described in our prospectus filed with the SEC on February 20, 2025 pursuant to Rule 424(b)(5) under the Securities Act. There were no shares of the Corporation's common stock sold during the three months ended March 31, 2026, or 2025, respectively.
Reworded paragraphs (37)
Previous wording
The following items highlight the Corporation’s changes in its financial condition as of March 31, 2026 compared to December 31, 2025 and the results of operations for the three months ended March 31, 2026 compared to the same period in 2025. More detailed information related to these highlights can be found in the sections that follow.
Current wording
The following items highlight the Corporation’s changes in its financial condition as of June 30, 2026 compared to December 31, 2025 and the results of operations for the three and six months ended June 30, 2026 compared to the same periods in 2025. More detailed information related to these highlights can be found in the sections that follow.
Previous wording
•Total assets increased $14.6 million, or 0.6%, to $2.6 billion as of March 31, 2026.
Current wording
•Total assets increased $31.2 million, or 1.2%, to $2.6 billion as of June 30, 2026.
Previous wording
•Mortgage loans held for sale increased $5.2 million, or 15.4%, to $39.0 million as of March 31, 2026.
Current wording
•Mortgage loans held for sale increased $21.1 million, or 62.6%, to $54.9 million as of June 30, 2026.
Previous wording
•The Corporation earned net income of $2.0 million during the three months ended March 31, 2026 and returned $1.7 million of capital to Meridian shareholders during the three months ended March 31, 2026 through a $0.14 dividend per share in the first quarter of the year.
Current wording
•The Corporation earned net income of $7.8 million during the six months ended June 30, 2026 and returned $3.3 million of capital to Meridian shareholders during this period through a $0.14 dividend per share in each of the first two quarters of the year.
Previous wording
•Net income was $2.0 million, or $0.17 per diluted share, down $393 thousand, or 16.4%, driven by a higher provision for credit losses, lower non-interest income, and higher non-interest expense, offset somewhat by improved net interest income.
Current wording
•Net income was $5.8 million, or $0.48 per diluted share, up $215 thousand, or 3.8%, driven by higher net interest income and a lower level of provision for credit losses, partially offset by lower non-interest income, and higher non-interest expense.
Previous wording
•The return on average assets and return on average equity were 0.32% and 4.02%, respectively, for the first quarter 2026, compared to 0.40% and 5.57%, respectively, for the first quarter 2025.
Current wording
•The return on average assets and return on average equity were 0.90% and 11.42%, respectively, for the second quarter 2026, compared to 0.90% and 12.68%, respectively, for the second quarter 2025.
Previous wording
•Net interest income increased $3.4 million, or 17.3%, to $23.2 million and the net interest margin increased to 3.82% from 3.46%, due to the impact of deposit and borrowing cost declines as well as the increase in average noninterest-bearing deposits over the period.
Current wording
•Net interest income increased $1.6 million, or 7.7%, to $22.8 million and the net interest margin increased to 3.69% from 3.54%, due to the impact of deposit and borrowing cost declines as well as the increase in average noninterest-bearing deposits over the period.
Previous wording
•Non-interest income decreased $287 thousand, or 3.9%, to $7.0 million driven by a $598 thousand decline in SBA loan income, a decrease of $685 thousand in fair value adjustments related to the mortgage banking segment. These declines in non-interest income were partially offset by a $1.1 million increase in mortgage banking income.
Current wording
•Non-interest income decreased $1.4 million, or 12.4%, to $9.9 million driven by a $1.4 million decline in SBA loan income, and a $467 thousand decrease in the net gain on sale of MSR's. These declines in non-interest income were partially offset by a $333 thousand increase in mortgage banking income.
Previous wording
•Non-interest expense increased $1.4 million, or 7.5%, to $20.2 million due to a $1.0 million increase in salaries and employee benefits, and an increase of $494 thousand in data processing and software expense.
Current wording
•Non-interest expense increased $2.3 million, or 5.7%, to $42.4 million due to an increase of $1.0 million in salaries and employee benefits, an increase of $806 thousand in data processing and software expense, combined with a $211 thousand increase in professional fees, and an increase of $354 thousand in other non-interest expense.
Previous wording
Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three months ended March 31, 2026 and 2025, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.
Current wording
Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three and six months ended June 30, 2026 and 2025, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.
Previous wording
The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the three months ended March 31, 2026 as compared to the same period in 2025, allocated by rate and volume. Changes in interest income and/or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.
Current wording
The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the three and six months ended June 30, 2026 as compared to the same periods in 2025, 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
On the funding side, overall interest expense decreased $1.9 million, largely driven by 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 $1.6 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 47 basis points, 64 basis points and 54 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 $105.3 million, and the average balances on time increased $26.1 million.
Current wording
On the funding side, overall interest expense decreased $2.1 million, largely driven by the continued impact that the Fed's prior period rate hikes have had on the cost of deposits and borrowings. The cost of deposits was down across the board, leading to a $1.6 million decrease to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits decreased 30, 57, and 44 basis points, respectively, while the cost of borrowings decreased 23 basis points. Interest expense was down overall due to these rate changes, an increase in average balances had an unfavorable impact of $451 thousand on interest expense. Money market/savings accounts were the largest drivers of the volume increase as average balances on such accounts increased $71.3 million, time deposit average balances increased $30.1 million, but the average balances on interest-bearing demand deposits decreased $10.6 million, and borrowings decreased $31.2 million on average.
Previous wording
For the three months ended March 31, 2026 as compared to the same period in 2025, tax-equivalent interest income increased $1.5 million as favorable volume changes contributed $2.5 million to interest income, partially offset by rate changes that had a $925 thousand unfavorable impact on interest income. The loans held for investment average balances increased $136.3 million, leading to a favorable volume impact on interest income of $2.4 million, while the increase in loans held for sale average balances of $3.2 million had a favorable impact on interest income of $48 thousand. Growth in the loans held for investment portfolio was led by average balance increases in construction loans ($82.9 million), commercial mortgage loans ($40.3 million), commercial and industrial loans ($27.6 million), and home equity lines and loans ($15.6 million). The change in rates led to decreased yields on loans held for sale (down 79 basis points) and loans held for investment (down 15 basis points) that unfavorably impact interest income by $835 thousand, overall.
Current wording
For the six months ended June 30, 2026 as compared to the same period in 2025, tax-equivalent interest income increased $1.1 million as favorable volume changes contributed $3.8 million to interest income, but this was partially offset by a $2.7 million unfavorable change in rates. The loans held for investment average balances increased $101.7 million, leading to a favorable volume impact on interest income of $3.6 million, while the increase in loans held for sale average balances of $6.1 million had a favorable impact to interest income of $184 thousand. Growth in the loans held for investment portfolio was led by average balance increases in construction loans ($24.7 million), commercial real estate ($11.9 million), commercial loans ($8.8 million), residential real estate ($4.2 million), and home equity loans ($4.8 million). The unfavorable change in rates led to decreased yields on loans held for sale (down 42 basis points) and loans held for investment (down 24 basis points) that unfavorably impact interest income by $2.5 million, overall.
Previous wording
The total provision for credit losses increased $2.3 million on a net basis for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The provision on funded loans increased $2.2 million over the three month comparable period in 2025 driven largely by an increase of $3.9 million in commercial mortgage charge-offs from a loan participated to us by another financial institution that became non-performing as of March 31, 2026. There was a $55 thousand provision on unfunded loan commitments for the three months ended March 31, 2026, while for the three months March 31, 2025 there was no provision on unfunded loan commitments.
Current wording
The total provision for credit losses decreased $835 thousand on a net basis for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The provision on funded loans decreased $840 thousand over the three month comparable period in 2025 driven largely by a decrease of $940 thousand in charge-offs over this period, combined with a lower level of loan growth as well. There was a $175 thousand provision on unfunded loan commitments for the three months ended June 30, 2026, while for the three months June 30, 2025 there was a $170 thousand provision on unfunded loan commitments.
Previous wording
Mortgage banking income increased $1.1 million over the comparable quarterly period as the volume of loans sold increased by $18.4 million, with a 28 basis point increase in the sales margin. Despite this 33.5% increase in mortgage banking income, total non-interest income decreased $287 thousand largely due to negative fair value adjustments, a decrease in SBA loan income, and an increase in net loss recorded on the sale of MSRs.
Current wording
Mortgage banking income increased $333 thousand over the comparable quarterly period, despite a 29 basis point decrease in the sales margin, as the volume of loans sold increased by $35.9 million, or 17%. Partially offsetting this 5.8% increase in mortgage banking income, total non-interest income decreased $1.4 million largely due to a decrease in SBA loan income, and a decrease in the net gain recorded on the sale of MSRs.
Previous wording
SBA loan income also decreased $598 thousand over this period due to a decline in the volume of SBA loans sold. The value of SBA loans sold for the quarter-ended March 31, 2026 was $5.4 million, or 44.8%, lower than the quarter-ended March 31, 2025, while the gross margin on sale was 8.5% for the quarter-ended March 31, 2026 compared to 8.7% for the quarter-ended March 31, 2025, down slightly.
Current wording
SBA loan income decreased $1.4 million over this period due to a decline in the volume of SBA loans sold. The volume of SBA loans sold for the quarter-ended June 30, 2026 was $27.6 million lower than the sale of such loans for the quarter-ended June 30, 2025, while the gross margin on sales was 7.9% for the quarter-ended June 30, 2026, an improvement from 6.2% for the quarter-ended June 30, 2025. There was also a net gain on sale of MSRs for the quarter-ended June 30, 2025, with no comparable sale taking place for the quarter-ended June 30, 2026.
Previous wording
Total non-interest expense increased $1.4 million, or 7.5%, primarily as the result of 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 $1.0 million due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of six full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits. Data processing and software expenses increased $494 thousand, reflecting greater customer transaction activity and Meridian's ongoing commitment to technology investments. Professional fees increased $211 thousand, largely related to loan work out expenses. Meanwhile, there was a decline of $155 thousand in occupancy and equipment expense largely due to a prior year early termination of office lease space.
Current wording
Total non-interest expense increased $2.3 million, or 5.7%, largely attributable to increases in salaries and employee benefits, professional fees, data processing and software expenses, as well as other non-interest expense. Salaries and employee benefits increased $1.0 million due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of nearly 14 full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits. The $211 thousand increase in professional fees was due to expenses related to non-performing loans. Other expense increased $354 thousand mainly due to an increase in OREO expenses and non-salary employee expenses in the current year-to-date period, compared to the prior year period.
Previous wording
As of March 31, 2026, total assets were $2.6 billion which increased $14.6 million, or 0.6%, from December 31, 2025. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:
Current wording
As of June 30, 2026, total assets were $2.6 billion which increased $31.2 million, or 1.2%, from December 31, 2025. This increase in assets was due primarily to loan portfolio growth, as detailed in the following table:
Previous wording
Total loans and other finance receivables increased $11.1 million, to $2.2 billion as of March 31, 2026, from $2.2 billion as of December 31, 2025. Overall portfolio loan growth was 0.5% since December 31, 2025, or 2.0% on an annualized basis for 2026. Construction loans increased $12.8 million, or 3.9%, and commercial and industrial loans increased $15.4 million, or 3.6%. While commercial real estate loans decreased $8.9 million, or 1.0%, and SBA loans decreased $5.3 million, or 3.8% due to loan sales described above.
Current wording
Total loans and other finance receivables increased $7.9 million, to $2.2 billion as of June 30, 2026, from $2.2 billion as of December 31, 2025. Overall portfolio loan growth was 0.4% since December 31, 2025, or 1% on an annualized basis for 2026. Leading the increase were commercial real estate loans which increased $32.3 million, or 3.7%, while commercial and industrial loans increased $16.6 million, or 3.9%. Partially offsetting the portfolio increases were construction loans which decreased $15.0 million, or 4.5%, SBA loans decreased $15.2 million, or 10.9% due to loan sales described above, and leases which decreased $10.3 million, or 22.7%.
Previous wording
As of March 31, 2026, included within the commercial real estate loans total of $870.5 million was $290.3 million of owner-occupied commercial loans, as well as $104.2 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.
Current wording
As of June 30, 2026, included within the commercial real estate loans total of $911.7 million was $286 million of owner-occupied commercial loans, as well as $102.0 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 $11.8 million, or 0.5%, since December 31, 2025. Total interest-bearing deposits increased $13.8 million during the period, whereas noninterest-bearing deposits decreased $1.9 million. Time deposits increased $23.7 million, or 3.2%, largely due to customer preference for the higher interest rates offered by these products.
Current wording
Total deposits increased $36.3 million, or 1.7%, since December 31, 2025. Total interest-bearing deposits increased $35.3 million during the period, and noninterest-bearing deposits increased $1.0 million. Time deposits increased $31.7 million, or 4.3%, largely due to customer preference for the higher interest rates offered by these products.
Previous wording
The majority of Meridian's deposit base is comprised of business deposits, 51%, with consumer deposits amounting to 15% at March 31, 2026. Municipal deposits at 11% 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 March 31, 2026, 64% of business accounts and 89% 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 20% at March 31, 2026.
Current wording
Meridian's deposit base is comprised of business deposits, 50%, with consumer deposits amounting to 15% at June 30, 2026. Municipal deposits at 12% 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 June 30, 2026, 65% of business accounts and 87% 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 20% at June 30, 2026.
Previous wording
Consolidated stockholders’ equity of the Corporation was $200.2 million, or 7.8% of total assets as of March 31, 2026, as compared to $199.7 million, or 7.8% of total assets as of December 31, 2025. On April 23, 2026, the Board of Directors declared a quarterly cash dividend of $0.14 per common share payable May 11, 2026 to shareholders of record as of May 4, 2026.
Current wording
Consolidated stockholders’ equity of the Corporation was $204.8 million, or 7.9% of total assets as of June 30, 2026, as compared to $199.7 million, or 7.8% of total assets as of December 31, 2025. On July 30, 2026, the Board of Directors declared a quarterly cash dividend of $0.14 per common share payable August 17, 2026 to shareholders of record as of August 10, 2026.
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 9.58% and 9.50% at March 31, 2026 and December 31, 2025, 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 9.72% and 9.50% at June 30, 2026 and December 31, 2025, respectively. The Corporation is exempt from CBLR.
Previous wording
The ratio of non-performing assets to total assets was 2.51% as of March 31, 2026, compared to 2.38% reported as of December 31, 2025. Total non-performing loans of $58.7 million as of March 31, 2026, increased $3.6 million from $55.1 million as of December 31, 2025. Included in non-performing loans at March 31, 2026 is $12.9 million of SBA loan guarantees, while non-performing loans at December 31, 2025 included $13.2 million of SBA loan guarantees. The overall increase was primarily the result of risk rating downgrades leading to non-performing loan classification mainly in the commercial mortgage and construction portfolios, partially offset by a $870 thousand decline in non-performing SBA loans due to charge-offs. The increase in commercial mortgage non-performing came largely from a purchased participation loan that is secured by a first lien on the leasehold interests of Class A office property with multiple buildings and tenants where an April 2026 appraisal, representative of conditions existing as of March 31, 2026, showed a significantly lower value than the original appraisal at the time of our participation. As of March 31, 2026 there were specific reserves of $2.8 million against non-performing loans, a decrease from $3.4 million as of December 31, 2025.
Current wording
The ratio of non-performing assets to total assets was 3.40% as of June 30, 2026, compared to 2.38% reported as of December 31, 2025. Total non-performing loans of $82.1 million as of June 30, 2026, increased $27.0 million from $55.1 million as of December 31, 2025, with the largest increases coming from land development loans ($21.7 million) and commercial mortgage loans ($9.8 million) that were downgraded during the current quarter, partially offset by payoffs of $3.4 million of several CRE & SBA loans combined. The downgraded land development loan relationships were all well collateralized and therefore did not require any specific reserve as of June 30, 2026. Of the increase in commercial mortgage non-performing loans, $2.9 million came from a purchased participation loan that is secured by a first lien on the leasehold interests of Class A office property with multiple buildings and tenants where an April 2026 appraisal, representative of conditions existing as of March 31, 2026, showed a significantly lower value than the original appraisal at the time of our participation, leading to a charge-off at March 31, 2026. The remaining increase in commercial mortgage non-performing loan relationships were well collateralized and therefore did not require any specific reserve as of June 30, 2026. SBA loans make up $24.6 million of total non-performing loans, with $11.9 million, or 48.4%, guaranteed by the SBA. The SBA portfolio was subject to the Fed's rapid rate increase with 49.7%, of total non-performing SBA loans having been originated in 2020-2021 when rates were lower by over 500 basis points.
Previous wording
Meridian realized net charge-offs of 0.35% of total average loans for the three months ending March 31, 2026, which had increased from 0.14% reported for the same period in 2025. Net charge-offs for the quarter ended March 31, 2026 were $7.8 million, compared to net charge-offs of $2.8 million for the quarter ended March 31, 2025. Net charge-offs for the current quarter comprised of $8.2 million in total charge-offs, of which $3.9 million related to a commercial mortgage purchased participation and $2.5 million related to SBA. There were $407 thousand in recoveries during the period, largely related to leases.
Current wording
Meridian realized net charge-offs of 0.12% of total average loans for the three months ending June 30, 2026, a decrease from 0.17% reported for the same period in 2025. Net charge-offs for the quarter ended June 30, 2026 were $2.6 million, compared to net charge-offs of $3.6 million for the quarter ended June 30, 2025. Net charge-offs for the current quarter comprised of $3.0 million in total gross charge-offs, $2.2 million from commercial, industrial & other finance receivables, $414 thousand related to SBA loans, and $455 thousand in small equipment leases. There were $467 thousand in recoveries during the period related to commercial loans, finance receivables and leases.
Previous wording
The ratio of allowance for credit losses to total loans and other finance receivables, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 0.98% as of March 31, 2026 compared to 1.00% as of December 31, 2025. Despite net charge-offs having increased as noted above, the level of provision for credit losses in the first quarter helped to maintain the allowance coverage level.
Current wording
The ratio of allowance for credit losses to total loans and other finance receivables, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Non-GAAP Financial Measures), was 0.99% as of June 30, 2026 compared to 1.00% as of December 31, 2025. The level of provision for credit losses in the first six months of 2026, combined with lower loan growth, helped to maintain the allowance coverage level.
Previous wording
The Corporation believes it is proactive with its loan review process that utilizes the engagement of an independent outside loan review firm, which helps identify developing credit issues. For example, the Corporation procures additional collateral (preferably outside the current loan structure) whenever possible and frequent contact with the borrower. The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss.
Current wording
The Corporation believes it is proactive with its loan review process that utilizes the engagement of an independent outside loan review firm, which helps identify developing credit issues. For example, the Corporation procures additional collateral (preferably outside the current loan structure) whenever possible and maintains frequent contact with the borrower. The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss.
Previous wording
(1) Included in non-performing small business loans as of March 31, 2026 and December 31, 2025, respectively, are $12.9 million and $13.2 million in SBA guarantees.
Current wording
(1) Included in non-performing small business loans as of June 30, 2026 and December 31, 2025, respectively, are $11.9 million and $13.2 million in SBA guarantees.
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 $348.0 million at March 31, 2026, compared to $346.3 million at December 31, 2025, 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 $378.4 million at June 30, 2026, compared to $346.3 million at December 31, 2025, 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 and has access to approximately $744.9 million in liquidity from these sources. Through its relationship at the Federal Reserve, Meridian had available credit of approximately $4.3 million at March 31, 2026. At March 31, 2026, Meridian had $0 in borrowings from the Federal Reserve. As a member of the FHLB, Meridian is eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of March 31, 2026, Meridian’s maximum borrowing capacity with the FHLB was $732.0 million. At March 31, 2026, Meridian had borrowed $120.8 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $170.1 million against its available credit lines. At March 31, 2026, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $304.1 million of available short or long term wholesale funding arrangements through the CDARS/ICS one-way buy program and conventional brokered CDs. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.
Current wording
In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the FRB to meet short-term liquidity needs and has access to approximately $783.7 million in liquidity from these sources. Through its relationship at the Federal Reserve, Meridian had available credit of approximately $3.9 million at June 30, 2026. At June 30, 2026, Meridian had $0 in borrowings from the Federal Reserve. As a member of the FHLB, Meridian is eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of June 30, 2026, Meridian’s maximum borrowing capacity with the FHLB was $736.9 million. At June 30, 2026, Meridian had borrowed $106.0 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $161.0 million against its available credit lines. At June 30, 2026, Meridian also has $56.0 million of unsecured federal funds lines of credit with other financial institutions, with outstanding borrowings of $2 million as of June 30, 2026, as well as $314.2 million of available short or long term wholesale funding arrangements through the CDARS/ICS one-way buy program and conventional brokered CDs. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.
Previous wording
The Banking Segment recorded income before tax of $3.0 million for the three months ended March 31, 2026, as compared to income before tax of $3.6 million for the same period in 2025. The Banking Segment provided 116.7% of the Corporation’s pre-tax profit for the three months ended March 31, 2026, as compared to 116.0% for the same period in 2025.
Current wording
The Banking Segment recorded income before tax of $6.4 million and $9.4 million for the three and six months ended June 30, 2026, as compared to income before tax of $5.2 million and $8.8 million for the same periods in 2025. The Banking Segment provided 85.8% and 93.8% of the Corporation’s pre-tax profit for the three and six months ended June 30, 2026, as compared to 71.4% and 84.8% for the same periods in 2025.
Previous wording
The Wealth Management Segment recorded income before tax of $811 thousand for the three months ended March 31, 2026, as compared to income before tax of $726 thousand for the same period in 2025.
Current wording
The Wealth Management Segment recorded income before tax of $574 thousand and $1.4 million for the three and six months ended June 30, 2026, as compared to income before tax of $604 thousand and $1.3 million for the same periods in 2025.
Previous wording
The Mortgage Banking Segment recorded a loss before tax of $1.2 million for the three months ended March 31, 2026, as compared to a loss before tax of $1.2 million for the same period in 2025. Mortgage Banking income and expenses related to loan originations and sales increased over the comparable periods due to higher loan origination and sales volume.
Current wording
The Mortgage Banking Segment recorded income before tax of $486 thousand and a pre-tax loss $755 thousand for the three and six months ended June 30, 2026, as compared to income before tax of $1.5 million and $252 thousand for the same periods in 2025. Mortgage Banking income and expenses related to loan originations and sales increased over the comparable periods due to higher loan origination and sales volume.
Previous wording
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan agreement. Total commitments to extend credit at March 31, 2026 were $656.1 million as compared to $641.9 million at December 31, 2025.
Current wording
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan agreement. Total commitments to extend credit at June 30, 2026 were $648.8 million as compared to $641.9 million at December 31, 2025.
Previous wording
Standby letters of credit are conditional commitments issued by the Corporation to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in granting loan facilities to customers. The Corporation’s obligation under standby letters of credit at March 31, 2026 amounted to $10.3 million as compared to $9.4 million at December 31, 2025.
Current wording
Standby letters of credit are conditional commitments issued by the Corporation to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in granting loan facilities to customers. The Corporation’s obligation under standby letters of credit at June 30, 2026 amounted to $10.4 million as compared to $9.4 million at December 31, 2025.
Previous wording
In certain circumstances the Corporation may be required to repurchase residential mortgage loans from investors under the terms of loan sale agreements. Generally, these circumstances include the breach of representations and warranties made to investors regarding borrower default or early payment, as well as a violation of the applicable federal, state, or local lending laws. The Corporation agrees to repurchase loans if the representations and warranties made with respect to such loans are breached. Based on the obligations described above, the Corporation repurchased no loans for the three months ended March 31, 2026, and March 31, 2025, respectively.
Current wording
In certain circumstances the Corporation may be required to repurchase residential mortgage loans from investors under the terms of loan sale agreements. Generally, these circumstances include the breach of representations and warranties made to investors regarding borrower default or early payment, as well as a violation of the applicable federal, state, or local lending laws. The Corporation agrees to repurchase loans if the representations and warranties made with respect to such loans are breached. Based on the obligations described above, the Corporation repurchased 1 loan of $285 thousand for the three and six months ended June 30, 2026, while the Corporation repurchased 1 loan of $425 thousand for the three and six months ended June 30, 2025,
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Six Month Results of Operations - June 30, 2026 Compared to June 30, 2025
Current report — wording carried from elsewhere
•The return on average assets and return on average equity were 0.61% and 7.75%, respectively, for the six months ended June 30, 2026, compared to 0.66% and 9.16%, respectively, for the six months ended June 30, 2025
Current report — wording carried from elsewhere
The following table presents the components of non-interest income for the periods indicated:
Current report — wording carried from elsewhere
The following table presents the components of non-interest expense for the periods indicated:
Current report — wording carried from elsewhere
As of June 30, 2026 there were specific reserves of $3.3 million against non-performing loans, a slight decrease from $3.4 million as of December 31, 2025.