株探米国株
英語
エドガーで原本を確認する
Meridian 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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
Or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 000-55983
MeridianCorporation.jpg
(Exact name of registrant as specified in its charter)
Pennsylvania 83-1561918
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer Identification No.)
9 Old Lincoln Highway, Malvern, Pennsylvania 19355
(Address of principal executive offices) (Zip Code)
(484) 568-5000
(Registrant’s telephone number, including area code)
Title of class Trading Symbol Name of exchange on which registered
Common Stock, $1 par value MRBK The NASDAQ Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ Accelerated Filer ☒
Non-accelerated Filer ☐ Smaller Reporting Company ☒
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 5, 2025 there were 11,517,456 outstanding shares of the issuer’s common stock, par value $1.00 per share.

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TABLE OF CONTENTS
Consolidated Balance Sheets – September 30, 2025 and December 31, 2024
Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2025 and 2024


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Glossary of Acronyms, Abbreviations, and Terms
The acronyms, abbreviations, and terms listed below are used in various sections of this report. As used throughout this report, the terms "Meridian", “we”, “our”, or “us” refer to Meridian Corporation and its consolidated subsidiaries, unless the context otherwise requires.
Acronym Description
ACBB Atlantic Central Bankers Bank
ACH Automated clearing house
ACL Allowance for credit losses
AFS Available-for-sale
ALCO Asset/Liability Committee
ALLL Allowance for loan and lease losses
ALM Asset / liability management
AOCI Accumulated other comprehensive income
ASC Accounting Standards Codification
ASU Accounting Standards Update
ATM
At the Market common stock offering
BHC Act Bank Holding Company Act of 1956
BOLI Bank owned life insurance
BSA-AML Bank Secrecy Act - Anti-Money Laundering
BTFP Federal Reserve Bank Term Funding Program
CBCA Change in Bank Control Act
CBLR Community Bank Leverage Ratio
CDARS Certificate of Deposit Account Registry Service
CECL Current expected credit losses
CET1 Common equity tier 1
CFPB Consumer Financial Protection Bureau
CMO Collateralized mortgage obligation
CRE Commercial real estate
DIF FDIC’s deposit insurance fund
ECOA Equal Credit Opportunity Act
ESOP Employee Stock Ownership Plan
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
Fed Federal Reserve System
FFIEC Federal Financial Institutions Examination Council
FHA Federal Housing Authority
FHFA Federal Housing Finance Agency
FHLB Federal Home Loan Bank of Pittsburgh
FHLMC Federal Home Loan Mortgage Corporation or Freddie Mac
FICO Financing Corporation
FNMA Federal National Mortgage Association or Fannie Mae
FRB Federal Reserve Bank of Philadelphia
FTE Fully taxable equivalent
GAAP U.S. generally accepted accounting principles
GLB Act Gramm-Leach-Bliley Act
GNMA Government National Mortgage Association or Ginnie Mae
GSE Government-sponsored entities
HTM Held-to-maturity
ICBA Independent Community Bankers of America
JOBS Act Jumpstart Our Business Startups Act of 2012

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LBP Look-back period
LEP Loss emergence period
LGD Loss given default
LIBOR London Inter-bank Offering Rate
LIHTC Low-income-housing tax credit
MBS Mortgage-backed securities
MSLP Main Street Lending Programs
MSR Mortgage servicing rights
OFAC Office of Foreign Assets Control
OREO Other real estate owned
PCAOB Public Company Accounting Oversight Board
PCD Purchased credit deteriorated
PD Probability of default
PDBS Pennsylvania Department of Banking and Securities
ROU Right-of-use
SBA Small Business Administration
SEC Securities and Exchange Commission
SERP Supplemental Executive Retirement Plan
SNC Shared national credit
SOFR Secure Overnight Financing Rate
TILA Truth in Lending Act
TDR Troubled debt restructuring
USDA U.S. Department of Agriculture
VA U.S. Department of Veteran’s Affairs

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MERIDIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(dollars in thousands, except share data) September 30,
2025		 December 31,
2024
Assets:
Cash and due from banks $ 12,605  $ 5,598 
Interest-bearing deposits at other banks 27,384  21,864 
Cash and cash equivalents 39,989  27,462 
Securities available-for-sale, at fair value (amortized cost of $200,682 and $183,764, respectively)
 194,268  174,304 
Securities held-to-maturity, at amortized cost (fair value of $29,853 and $30,492, respectively)
 32,593  33,771 
Equity investments 2,150  2,086 
Mortgage loans held for sale 28,016  32,413 
Loans and other finance receivables, net of fees and costs 2,162,845  2,030,437 
Allowance for credit losses (21,794) (18,438)
Loans and other finance receivables, net of the allowance for credit losses 2,141,051  2,011,999 
Restricted investment in bank stock 8,350  7,753 
Bank premises and equipment, net 12,413  12,151 
Bank owned life insurance 30,421  29,712 
Accrued interest receivable 10,944  9,958 
OREO and other repossessed assets 3,714  276 
Deferred income taxes 4,989  4,669 
Servicing assets 3,845  4,382 
Goodwill 899  899 
Intangible assets 2,614  2,767 
Other assets 24,874  31,265 
Total assets $ 2,541,130  $ 2,385,867 
Liabilities:
Deposits:
Non-interest bearing $ 239,614  $ 240,858 
Interest bearing 1,891,502  1,764,510 
Total deposits 2,131,116  2,005,368 
Borrowings 137,265  124,471 
Subordinated debentures 49,822  49,743 
Accrued interest payable 7,095  6,860 
Other liabilities 27,803  27,903 
Total liabilities 2,353,101  2,214,345 
Stockholders’ equity:
Common stock, $1 par value per share. 25,000,000 shares authorized; 13,520,639 and 13,243,258 shares issued and 11,517,456 and 11,240,075 shares outstanding, respectively
 13,521  13,243 
Surplus 85,122  81,545 
Treasury stock, 2,003,183 shares, at cost
 (26,079) (26,079)
Unearned common stock held by ESOP (1,006) (1,006)
Retained earnings 122,376  111,961 
Accumulated other comprehensive loss (5,905) (8,142)
Total stockholders’ equity 188,029  171,522 
Total liabilities and stockholders’ equity $ 2,541,130  $ 2,385,867 
See accompanying notes to the unaudited consolidated financial statements.
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MERIDIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
September 30,
Nine months ended
September 30,
(dollars in thousands, except per share data) 2025 2024 2025 2024
Interest income:
Loans and other finance receivables, including fees $ 40,477  $ 38,103  $ 115,723  $ 109,928 
Securities - taxable 1,895  1,480  5,380  4,055 
Securities - tax-exempt 325  320  933  969 
Cash and cash equivalents 412  416  1,452  1,047 
Total interest income 43,109  40,319  123,488  115,999 
Interest expense:
Deposits 17,418  19,313  51,587  55,696 
Borrowings and subordinated debentures 2,575  2,764  7,850  8,606 
       Total interest expense 19,993  22,077  59,437  64,302 
Net interest income 23,116  18,242  64,051  51,697 
Provision for credit losses 2,850  2,282  11,865  7,828 
Net interest income after provision for credit losses 20,266  15,960  52,186  43,869 
Non-interest income:
Mortgage banking income 5,914  6,474  15,069  15,528 
Wealth management income 1,610  1,447  4,637  4,208 
SBA loan income 1,431  544  4,167  2,315 
Earnings on investment in life insurance 246  222  708  644 
Net gain on sale of MSRs —  —  415  — 
Net change in the fair value of derivative instruments 129  (102) 176  176 
Net change in the fair value of loans held-for-sale (75) 169  198  138 
Net change in the fair value of loans held-for-investment 213  965  573  766 
Net (loss) gain on hedging activity (166) (197) (129) (279)
Other 651  1,309  2,751  4,563 
Total non-interest income 9,953  10,831  28,565  28,059 
Non-interest expense:
Salaries and employee benefits 13,613  12,829  38,177  34,839 
Occupancy and equipment 991  1,243  3,366  3,706 
Professional fees 1,092  1,106  3,019  3,633 
Data processing and software
 1,865  1,553  5,050  4,591 
Advertising and promotion 877  717  2,933  2,454 
Pennsylvania bank shares tax 254  181  792  729 
Other 2,854  2,917  8,309  7,786 
Total non-interest expense 21,546  20,546  61,646  57,738 
        Income before income taxes 8,673  6,245  19,105  14,190 
Income tax expense 2,014  1,502  4,455  3,445 
        Net income $ 6,659  $ 4,743  $ 14,650  $ 10,745 
Basic earnings per common share
 $ 0.59  $ 0.43  $ 1.30  $ 0.97 
Diluted earnings per common share
 $ 0.58  $ 0.42  $ 1.28  $ 0.96 
Basic weighted average shares outstanding
 11,325  11,110  11,252  11,098 
Diluted weighted average shares outstanding
 11,540  11,234  11,458  11,198 
See accompanying notes to the unaudited consolidated financial statements.
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MERIDIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Net income: $ 6,659  $ 4,743  $ 14,650  $ 10,745 
Net change in unrealized gains (losses) on investment securities available for sale:
Change in fair value of investment securities, net of tax of $487, $695, $718, and $1,063, respectively
 1,602  2,420  2,373  2,311 
Reclassification adjustment for net losses realized in net income, net of tax effect of $(10), $14, $(11), and $14, respectively,
 (35) 43  (35) 43 
Reclassification adjustment for investment securities transferred to held-to-maturity, net of tax effect of $7, $7, $21, and $21, respectively
 22  22  66  66 
Unrealized investment gains, net of tax effect of $484, $716, $728, and $1,098, respectively
 $ 1,589  $ 2,485  $ 2,404  $ 2,420 
Net change in unrealized (losses) gains on interest rate swaps used in cash flow hedges, net of tax effect of $17, $368, $(167), and $85, respectively
 17  (1,163) (167) (264)
Total other comprehensive income $ 1,606  $ 1,322  $ 2,237  $ 2,156 
Total comprehensive income $ 8,265  $ 6,065  $ 16,887  $ 12,901 
See accompanying notes to the unaudited consolidated financial statements.
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MERIDIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(dollars in thousands, except per share data)
Common
Stock
 Surplus Treasury
Stock		 Unearned
ESOP		 Retained
Earnings		 AOCI Total
Three Months Ended September 30, 2025
Balance at July 1, 2025
 $ 13,300  $ 82,184  $ (26,079) $ (1,006) $ 117,132  $ (7,511) $ 178,020 
Net income —  —  —  —  6,659  —  6,659 
Other comprehensive income —  —  —  —  —  1,606  1,606 
Dividends declared ($0.125 per share)
 —  —  —  —  (1,415) —  (1,415)
Net issuance of common stock 189  2,601  —  —  —  —  2,790 
Common stock issued through share-based awards and exercises 32  235  —  —  —  —  267 
Stock based compensation expense —  102  —  —  —  —  102 
Balance at September 30, 2025 $ 13,521  $ 85,122  $ (26,079) $ (1,006) $ 122,376  $ (5,905) $ 188,029 
(dollars in thousands, except per share data)
Common
Stock
 Surplus Treasury
Stock		 Unearned
ESOP		 Retained
Earnings		 AOCI Total
Nine Months Ended September 30, 2025
Balance at January 1, 2025 $ 13,243  $ 81,545  $ (26,079) $ (1,006) $ 111,961  $ (8,142) $ 171,522 
Net income —  —  —  —  14,650  —  14,650 
Other comprehensive income —  —  —  —  —  2,237  2,237 
Dividends declared ($0.375 per share)
 —  —  —  —  (4,235) —  (4,235)
Net issuance of common stock 189  2,601  —  —  —  —  2,790 
Common stock issued through share-based awards and exercises 89  700  —  —  —  —  789 
Stock based compensation expense —  276  —  —  —  —  276 
Balance at September 30, 2025 $ 13,521  $ 85,122  $ (26,079) $ (1,006) $ 122,376  $ (5,905) $ 188,029 
(dollars in thousands, except per share data)
Common
Stock
 Surplus Treasury
Stock		 Unearned
ESOP		 Retained
Earnings		 AOCI Total
Three Months Ended September 30, 2024
Balance at July 1, 2024
 $ 13,194  $ 80,639  $ (26,079) $ (1,204) $ 104,420  $ (8,588) $ 162,382 
Net income —  —  —  —  4,743  —  4,743 
Other comprehensive income —  —  —  —  —  1,322  1,322 
Dividends declared ($0.125 per share)
 —  —  —  —  (1,398) —  (1,398)
Common stock issued through share-based awards and exercises 38  297  —  —  —  —  335 
Stock based compensation expense —  66  —  —  —  —  66 
Balance at September 30, 2024 $ 13,232  $ 81,002  $ (26,079) $ (1,204) $ 107,765  $ (7,266) $ 167,450 
(dollars in thousands, except per share data)
Common
Stock
 Surplus Treasury
Stock		 Unearned
ESOP		 Retained
Earnings		 AOCI Total
Nine Months Ended September 30, 2024
Balance at January 1, 2024 $ 13,186  $ 80,325  $ (26,079) $ (1,204) $ 101,216  $ (9,422) $ 158,022 
Net income —  —  —  —  10,745  —  10,745 
Other comprehensive income —  —  —  —  —  2,156  2,156 
Dividends declared ($0.375 per share)
 —  —  —  —  (4,196) —  (4,196)
Common stock issued through share-based awards and exercises 46  358  —  —  —  —  404 
Stock based compensation expense —  319  —  —  —  —  319 
Balance at September 30, 2024 $ 13,232  $ 81,002  $ (26,079) $ (1,204) $ 107,765  $ (7,266) $ 167,450 
See accompanying notes to the unaudited consolidated financial statements.
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MERIDIAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(dollars in thousands) 2025 2024
Net income $ 14,650  $ 10,745 
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) loss on sale of investment securities available-for-sale
 (48) 57 
Net amortization of investment premiums and discounts and change in fair value of equity securities 1,630  2,873 
Depreciation and amortization (accretion), net (87) 276 
Provision for credit losses 11,865  7,828 
Amortization of issuance costs on subordinated debt 93  92 
Stock based compensation 276  319 
Net change in fair value of derivative instruments (176) (176)
Net change in fair value of loans held for sale (198) (138)
Net change in fair value of loans held for investment (573) (766)
Amortization and net impairment of servicing rights 450  994 
Net gain on sale of MSRs (415) — 
Gain on sale of OREO (15) — 
SBA loan income (4,167) (2,315)
Proceeds from sale of loans 584,846  594,669 
Loans originated for sale (565,183) (594,399)
Mortgage banking income (15,069) (15,528)
Increase in accrued interest receivable (986) (687)
Decrease (increase) in other assets 4,700  (438)
Earnings from investment in bank owned life insurance (708) (644)
(Increase) decrease in deferred income tax (977) 66 
Increase (decrease) in accrued interest payable 235  (3,307)
Increase in other liabilities
 333  10,780 
          Net cash provided by operating activities
 30,476  10,301 
Cash flows from investing activities:
Activity in available-for-sale securities:
Maturities, repayments and calls 12,223  12,436 
Sales 2,462  16,004 
Purchases (33,224) (61,024)
Activity in held-to-maturity securities:
Maturities, repayments and calls 1,000  1,720 
Proceeds from sale of OREO 15  — 
Proceeds from sale of MSRs 502  — 
Net purchases of restricted investments in bank stocks
 (597) (470)
Net increase in loans (136,888) (124,753)
Purchases of premises and equipment (1,338) (222)
Disposal of premise and equipment
 23  — 
          Net cash used in investing activities (155,822) (156,309)
Cash flows from financing activities:
Net increase in deposits 125,748  155,465 
Increase (decrease) in short-term borrowings
 28,039  (40,609)
(Decrease) increase in long-term debt
 (15,245) 10,594 
Repayment of subordinated debt (13) — 
Dividends paid (4,235) (4,196)
Share based awards and exercises 789  404 
Proceeds from issuance of common stock 2,790  — 
          Net cash provided by financing activities 137,873  121,658 
Net change in cash and cash equivalents 12,527  (24,350)
Cash and cash equivalents at beginning of period 27,462  56,697 
Cash and cash equivalents at end of period $ 39,989  $ 32,347 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 59,202  $ 67,609 
Income taxes 6,299  1,222 
Net loans sold, not settled 1,264  8,162 
Investment security purchases, not settled —  (7,380)
Non-cash transfers from loans receivable to OREO 1,297  — 
Non-cash transfers from loans receivable to repossessed assets 2,417  — 
See accompanying notes to the unaudited consolidated financial statements.
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MERIDIAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1)    Summary of Significant Accounting Policies
Basis of Presentation
The Corporation’s unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position and the results of operations for the interim periods presented have been included.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Amounts subject to significant estimates are items such as the allowance for credit losses, lending related commitments and the related unfunded commitment reserve, the fair value of financial instruments, other-than-temporary impairments of investment securities, and the valuations of goodwill, intangible assets, and servicing assets.
These unaudited consolidated financial statements should be read in conjunction with the Corporation’s filings with the SEC (including our Annual Report on Form 10-K for the year ended December 31, 2024), subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in Form 10-K and Form 10-Q filings, if any.
Certain prior period amounts have been reclassified to conform with current period presentation. Reclassifications had no effect on net income or stockholders’ equity. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any other period.

Pronouncements Adopted/Effective during the nine months ended September 30, 2025:

FASB ASU 2024-01 Stock Compensation - Scope Application of Profits Interest and Similar Awards
The amendments in this update improve the understandability of paragraph 718-10-15-3 apply to all entities that enter into share-based payments transactions and are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis. The adoption of this amendment did not have a material impact on the Corporation's consolidated financial statements.

Pronouncements Not Yet Effective as of September 30, 2025:

FASB ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative"
This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. For entities subject to the SEC's existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity.

FASB ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures”
The amendments in this update address investor requests for more transparency about income tax information through improvements to annual income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update will be effective for our annual reporting period ended December 31, 2025 and applied on a prospective basis.

FASB ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures"
This amendment requires enhanced disaggregation of certain expense categories within the income statement to provide more detailed information about the nature and function of expenses. The objective is to improve the transparency and usefulness of financial statements for users by offering greater insight into the components of operating expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026. These changes may be applied prospectively or retroactively. Early adoption is permitted. The Corporation is currently evaluating the impact on its disclosures.

FASB ASU 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date"
This amendment addresses questions that were raised regarding the effective date of ASU 2024-03 for public business entities with non-calendar year ends. The amendment clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.

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FASB ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)"
This ASU is intended to modernize old internal-use software guidance written in 1998 to adapt to the agile basis predominantly used to develop software today. This update is effective for annual and interim periods beginning after December 15, 2027. These changes may be applied prospectively, retroactively, or on a modified prospective basis. Early adoption is permitted. The Corporation will evaluate the impact on its disclosures as the applicability date gets closer.

(2)    Earnings per Common Share
Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period reduced by unearned ESOP Plan shares and treasury shares. Diluted earnings per common share takes into account the potential dilution computed pursuant to the treasury stock method that could occur if stock options were exercised and converted into common stock, and if restricted stock awards were vested. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive.
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands, except per share data) 2025 2024 2025 2024
Numerator for earnings per share:
Net income available to common stockholders $ 6,659  $ 4,743  $ 14,650  $ 10,745 
Denominators for earnings per share:
Weighted average shares outstanding 11,443  11,254  11,376  11,249 
Average unearned ESOP shares (118) (144) (124) (151)
Basic weighted averages shares outstanding 11,325  11,110  11,252  11,098 
Dilutive effects of assumed exercises of stock options 215  124  206  100 
Diluted weighted averages shares outstanding 11,540  11,234  11,458  11,198 
Basic earnings per share $ 0.59  $ 0.43  $ 1.30  $ 0.97 
Diluted earnings per share $ 0.58  $ 0.42  $ 1.28  $ 0.96 
Antidilutive shares excluded from computation of average dilutive earnings per share 357  489  359  586 

(3)    Securities
The following tables presents the amortized cost, allowance for credit losses, and fair value of securities at the dates indicated:
September 30, 2025
(dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Fair value # of Securities in unrealized loss position
Securities available-for-sale:
U.S. asset backed securities $ 27,144  $ 53  $ (290) $ —  $ 26,907  13 
U.S. government agency MBS 27,336  241  (262) —  27,315  9 
U.S. government agency CMO 58,518  305  (1,627) —  57,196  37 
State and municipal securities 43,471  136  (3,993) —  39,614  32 
U.S. Treasuries 17,040  —  (972) —  16,068  16 
Non-U.S. government agency CMO 9,531  34  (233) —  9,332  9 
Corporate bonds 17,642  598  (404) —  17,836  11 
Total securities available-for-sale $ 200,682  $ 1,367  $ (7,781) $ —  $ 194,268  127 
Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position
Securities held to maturity:
State and municipal securities $ 32,593  $ 6  $ (2,746) $ —  $ 29,853  19 
Total securities held-to-maturity $ 32,593  $ 6  $ (2,746) $ —  $ 29,853  19 


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December 31, 2024
(dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Fair value # of Securities in unrealized loss position
Securities available-for-sale:
U.S. asset backed securities $ 29,931  $ 73  $ (160) $ —  $ 29,844  12 
U.S. government agency MBS 21,392  96  (617) —  20,871  14 
U.S. government agency CMO 48,051  23  (2,461) —  45,613  42 
State and municipal securities 40,854  1  (4,159) —  36,696  31 
U.S. Treasuries 17,039  —  (1,589) —  15,450  16 
Non-U.S. government agency CMO 12,082  59  (412) —  11,729  9 
Corporate bonds 14,415  448  (762) —  14,101  15 
Total securities available-for-sale $ 183,764  $ 700  $ (10,160) $ —  $ 174,304  139 
(dollars in thousands) Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position
Securities held to maturity:
State and municipal securities $ 33,771  $ 7  $ (3,286) $ —  $ 30,492  19 
Total securities held-to-maturity $ 33,771  $ 7  $ (3,286) $ —  $ 30,492  19 
Although the Corporation’s investment portfolio overall is in a net unrealized loss position at September 30, 2025, the temporary impairment in the above noted securities is primarily the result of changes in market interest rates subsequent to purchase and it is more likely than not that the Corporation will not be required to sell these securities prior to recovery to satisfy liquidity needs, and therefore, no securities warranted an ACL.
The following table shows the Corporation’s investment gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at the dates indicated:
September 30, 2025
Less than 12 Months 12 Months or more Total
(dollars in thousands) Fair
value		 Unrealized losses Fair
value		 Unrealized losses Fair
value		 Unrealized losses
Securities available-for-sale:
U.S. asset backed securities $ 7,579  $ (82) $ 8,382  $ (208) $ 15,961  $ (290)
U.S. government agency MBS 986  (1) 8,350  (261) 9,336  (262)
U.S. government agency CMO 9,454  (67) 24,992  (1,560) 34,446  (1,627)
State and municipal securities 1,196  (4) 34,811  (3,989) 36,007  (3,993)
U.S. Treasuries —  —  16,068  (972) 16,068  (972)
Non-U.S. government agency CMO 513  —  5,421  (233) 5,934  (233)
Corporate bonds —  —  6,295  (404) 6,295  (404)
Total securities available-for-sale $ 19,728  $ (154) $ 104,319  $ (7,627) $ 124,047  $ (7,781)
Less than 12 Months 12 Months or more Total
(dollars in thousands) Fair
value		 Unrecognized
losses		 Fair
value		 Unrecognized
losses		 Fair
value		 Unrecognized
losses
Securities held-to-maturity:
State and municipal securities $ 3,094  $ (126) $ 24,567  $ (2,620) $ 27,661  $ (2,746)
Total securities held-to-maturity $ 3,094  $ (126) $ 24,567  $ (2,620) $ 27,661  $ (2,746)
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December 31, 2024
Less than 12 Months 12 Months or more Total
(dollars in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses
Securities available-for-sale:
U.S. asset backed securities $ 12,708  $ (56) $ 3,568  $ (104) $ 16,276  $ (160)
U.S. government agency MBS 5,773  (183) 9,050  (434) 14,823  (617)
U.S. government agency CMO 22,351  (506) 18,876  (1,955) 41,227  (2,461)
State and municipal securities —  —  35,199  (4,159) 35,199  (4,159)
U.S. Treasuries —  —  15,450  (1,589) 15,450  (1,589)
Non-U.S. government agency CMO 1,403  (12) 5,204  (400) 6,607  (412)
Corporate bonds 1,688  (41) 7,479  (721) 9,167  (762)
Total securities available-for-sale $ 43,923  $ (798) $ 94,826  $ (9,362) $ 138,749  $ (10,160)
Less than 12 Months 12 Months or more Total
(dollars in thousands) Fair
value		 Unrecognized
losses		 Fair
value		 Unrecognized
losses		 Fair
value		 Unrecognized
losses
Securities held-to-maturity:
State and municipal securities $ 1,048  $ (15) $ 27,271  $ (3,271) $ 28,319  $ (3,286)
Total securities held-to-maturity $ 1,048  $ (15) $ 27,271  $ (3,271) $ 28,319  $ (3,286)
As of September 30, 2025, substantially all of the Corporation’s available-for-sale investment securities were mortgage-backed securities or collateral mortgage obligations which were issued or guaranteed by U.S. government-sponsored entities and agencies. As of September 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.
The amortized cost and carrying value of securities are shown below by contractual maturities at the dates indicated. Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties.
September 30, 2025
Available-for-sale Held-to-maturity
(dollars in thousands) Amortized cost Fair value Amortized cost Fair value
Due in one year or less $ —  $ —  $ —  $ — 
Due after one year through five years 22,748  21,613  2,965  2,832 
Due after five years through ten years 22,107  22,175  5,769  5,032 
Due after ten years 60,442  56,637  23,859  21,989 
Subtotal 105,297  100,425  32,593  29,853 
Mortgage-related securities 95,385  93,843  —  — 
Total $ 200,682  $ 194,268  $ 32,593  $ 29,853 
There were sales of investment securities available for sale for the three and nine months ended September 30, 2025 totalling $2.5 million with $65 thousand in gross gains and $17 thousand in gross losses recognized. There were sales of investment securities available for sale for the three and nine month ended September 30, 2024 totaling $16.0 million with $57 thousand in gross losses recognized.
ACL on Securities AFS and HTM
We use credit ratings quarterly and the most recent financial information of securities' issuers annually to help evaluate the credit quality of our securities AFS and HTM portfolios on a quarterly basis. The securities portfolio consists primarily of U.S. government treasuries and U.S. government agency asset backed securities which have no probability of default. The remaining portfolio consists of highly rated municipal bonds, non-agency CMO, and corporate bonds that have a low probability of default.
For the three and nine months ended September 30, 2025 and 2024, we had no significant ACL or provision expense and no charge-offs or recoveries on AFS or HTM securities.
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Pledged Securities
As of September 30, 2025 and December 31, 2024, securities having a carrying value of $69.2 million and $43.3 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.
(4)    Loans and Other Finance Receivables
The following table presents loans and other finance receivables detailed by category at the dates indicated:
(dollars in thousands) September 30,
2025		 December 31,
2024
Real estate loans:
Commercial mortgage $ 872,497  $ 823,976 
Home equity lines and loans 105,109  90,721 
Residential mortgage 260,495  252,565 
Construction 315,095  259,553 
Total real estate loans 1,553,196  1,426,815 
Commercial and industrial 418,069  367,366 
Small business loans 137,894  155,775 
Consumer 336  349 
Leases, net 49,766  75,987 
Total loans and other finance receivables $ 2,159,261  $ 2,026,292 
Balances included in loans and other finance receivables, net of fees and costs:
Residential mortgage real estate loans accounted under fair value option, at fair value $ 14,454  $ 14,501 
Residential mortgage real estate loans accounted under fair value option, at amortized cost 16,312  16,543 
Unearned lease income included in leases, net (5,096) (9,057)
Unamortized deferred loan origination costs, net of deferred fees 3,584  4,145 
Fair Value Option for Residential Mortgage Real Estate Loans
Residential mortgage real estate loans that were originated by the Corporation and intended for sale in the secondary market to permanent investors, but were either repurchased or unsalable due to defect, and that the Corporation has the ability and intent to hold for the foreseeable future or until maturity or payoff are carried at fair value pursuant to the Corporation's election of the fair value option for these loans. The remaining loans, net of fees and costs are stated at their outstanding unpaid principal balances, net of deferred fees or costs, since the original intent for these loans was to hold them until payoff or maturity.
Nonaccrual and Past Due Loans and Other Finance Receivables
The following tables present an aging of the Corporation’s loans and other finance receivables at the dates indicated:
September 30, 2025
(dollars in thousands) 30-59 days past due 60-89 days past due 90+ days past due and still accruing Total past due Current Total accruing Nonaccrual Total loans and other finance receivables % Delinquent
Commercial mortgage $ 114  $ 426  $ —  $ 540  $ 870,716  $ 871,256  $ 1,241  $ 872,497  0.20  %
Home equity lines and loans 69  —  480  549  102,977  103,526  1,583  105,109  2.03 
Residential mortgage (1)
 —  339  —  339  249,806  250,145  10,350  260,495  4.10 
Construction —  —  —  —  304,787  304,787  10,308  315,095  3.27 
Commercial and industrial —  —  —  —  410,231  410,231  7,838  418,069  1.87 
Small business loans (2)
 119  —  —  119  116,519  116,638  21,256  137,894  15.50 
Consumer —  —  —  —  336  336  —  336  — 
Leases, net 354  568  —  922  46,543  47,465  2,301  49,766  6.48  %
Total $ 656  $ 1,333  $ 480  $ 2,469  $ 2,101,915  $ 2,104,384  $ 54,877  $ 2,159,261  2.66  %
(1) Includes $14.5 million of loans at fair value of which $14.5 million are current, $0 are 30-89 days past due and $510 thousand are nonaccrual.
(2) Includes $11.8 million of loans within nonaccrual category that are guaranteed by the SBA.

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December 31, 2024
(dollars in thousands) 30-59 days past due 60-89 days past due Total past due Current Total accruing Nonaccrual Total loans and other finance receivables % Delinquent
Commercial mortgage $ 1,290  $ —  $ 1,290  $ 821,877  $ 823,167  $ 809  $ 823,976  0.25  %
Home equity lines and loans 176  154  330  88,675  89,005  1,716  90,721  2.26 
Residential mortgage (1)
 3,259  —  3,259  241,406  244,665  7,900  252,565  4.42 
Construction 1,000  —  1,000  249,940  250,940  8,613  259,553  3.70 
Commercial and industrial —  —  —  355,400  355,400  11,966  367,366  3.26 
Small business loans (2)
 1,351  —  1,351  142,154  143,505  12,270  155,775  8.74 
Consumer —  —  —  349  349  —  349  — 
Leases, net 1,046  457  1,503  72,633  74,136  1,851  75,987  4.41 
Total $ 8,122  $ 611  $ 8,733  $ 1,972,434  $ 1,981,167  $ 45,125  $ 2,026,292  2.66  %
(1) Includes $14.5 million of loans at fair value of which $13.7 million are current, $473 thousand are 30-89 days past due and $340 thousand are nonaccrual.
(2) Includes $6.2 million of loans within nonaccrual category that are guaranteed by the SBA.

There was one loan of $480 thousand in the table above as of September 30, 2025, and no loans or other finance receivables as of December 31, 2024, that were 90+days past due and still accruing interest.

Foreclosed and Repossessed Assets
At September 30, 2025 and December 31, 2024, there were 9 and 4 consumer mortgage loans, respectively, secured by residential real estate properties (included in loans, net of fees and costs on the Consolidated Balance Sheets) totaling $2.5 million and $1.3 million, respectively, for which formal foreclosure proceedings were in process.
During the nine months ended September 30, 2025 the Corporation foreclosed on a commercial real estate property in partial satisfaction of a non-performing commercial loan relationship and repossessed a billboard asset from a separate commercial loan relationship. These assets were reclassified into OREO and other repossessed assets, respectively, on the balance sheet at September 30, 2025. The repossessed billboard was transferred into other repossessed assets with a value of $2.4 million, after consideration of estimated costs to sell, while the foreclosed real estate was transferred into OREO with a value of $1.3 million, after consideration of estimated costs to sell. The balance of repossessed assets as of December 31, 2024 largely consisted of a residential property, that was subsequently sold in the second quarter of 2025.

Risks and Uncertainties
Our commercial loans have been proactively managed in an effort to achieve a balanced portfolio with no unusual exposure to one industry. Additionally, most of our lending activity occurs within our primary market areas which are concentrated in southeastern Pennsylvania, Delaware, and Maryland as well as other contiguous markets and represents a geographic concentration. Commercial loans are generally viewed as having more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

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Past Due and Nonaccrual Status
The following tables presents the amortized costs basis of loans and other finance receivables on nonaccrual status and 90 days or more past due and still accruing, net of fees and costs as of September 30, 2025 and December 31, 2024. As of September 30, 2025 there was one loan of $480 thousand that was 90+ days past due and still accruing interest, and no loans or other finance receivables 90 days or more past due and still accruing as of December 31, 2024.
September 30, 2025
 December 31, 2024
(dollars in thousands) Nonaccrual without ACL Nonaccrual with ACL Total nonaccrual Nonaccrual without ACL Nonaccrual with ACL Total nonaccrual
Commercial mortgage $ 1,241  $ —  $ 1,241  $ 809  $ —  $ 809 
Home equity lines and loans 1,583  —  1,583  1,716  —  1,716 
Residential mortgage 8,770  1,580  10,350  7,518  382  7,900 
Construction 4,296  6,012  10,308  8,613  —  8,613 
Commercial and industrial 6,391  1,447  7,838  9,166  2,800  11,966 
Small business loans 16,127  5,129  21,256  8,179  4,091  12,270 
Leases, net —  2,301  2,301  —  1,851  1,851 
Total $ 38,408  $ 16,469  $ 54,877  $ 36,001  $ 9,124  $ 45,125 
The decrease in commercial and industrial nonaccrual loans with ACL relates to the repossession of property on a protracted commercial advertising loan relationship, combined with the foreclosure of a piece of real estate on another commercial loan. While the increase in nonaccrual SBA loans without ACL relates to additional risk rating downgrades leading to non-performing classification in the SBA loan portfolio.

Collateral-dependent Loans
The following tables presents the amortized cost basis of non-accruing collateral-dependent loans and other finance receivables by class as of September 30, 2025 and December 31, 2024 under the current expected credit loss model:
September 30, 2025 December 31, 2024
(dollars in thousands) Real estate Equipment and other Total Real estate Equipment and other Total
Commercial mortgage $ 1,241  $ —  $ 1,241  $ 809  $ —  $ 809 
Home equity lines and loans 1,583  —  1,583  1,716  —  1,716 
Residential mortgage 10,350  —  10,350  7,900  —  7,900 
Construction 10,308  —  10,308  8,613  —  8,613 
Commercial and industrial 2,376  5,462  7,838  1,344  10,622  11,966 
Small business loans 15,737  5,519  21,256  10,164  2,106  12,270 
Total $ 41,595  $ 10,981  $ 52,576  $ 30,546  $ 12,728  $ 43,274 

(5)    Allowance for Credit Losses
The ACL is maintained at a level considered adequate to provide for estimated expected credit losses within the loan and other finance receivables portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. Management’s periodic evaluation of the adequacy of the ACL is based on known and inherent risks in the portfolio, adverse situations that may affect the customer’s ability to repay, the estimated value of any underlying collateral, composition of the portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available.









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Roll-Forward of ACL by Portfolio Segment
The following tables provide the activity of our allowance for credit losses for the three and nine months ended September 30, 2025 and September 30, 2024 under the CECL model in accordance with ASC 326:
Three Months Ended September 30, 2025
(dollars in thousands) Beginning Balance Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending balance
Commercial mortgage $ 3,411  $ —  $ —  $ 385  $ 3,796 
Home equity lines and loans 1,264  —  1  76  1,341 
Residential mortgage 1,097  —  —  208  1,305 
Construction 1,581  —  —  224  1,805 
Commercial and industrial 3,653  (847) 55  975  3,836 
Small business loans 7,837  (997) 4  1,462  8,306 
Consumer —  (4) 1  3  — 
Leases 2,008  (273) 153  (483) 1,405 
Total $ 20,851  $ (2,121) $ 214  $ 2,850  $ 21,794 
Nine Months Ended September 30, 2025
(dollars in thousands) Beginning Balance Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending balance
Commercial mortgage $ 3,469  $ —  $ —  $ 327  $ 3,796 
Home equity lines and loans 1,147  —  4  190  1,341 
Residential mortgage 1,021  —  2  282  1,305 
Construction 923  (738) —  1,620  1,805 
Commercial and industrial 3,098  (3,135) 83  3,790  3,836 
Small business loans 6,304  (3,426) 36  5,392  8,306 
Consumer —  (11) 3  8  — 
Leases 2,476  (1,798) 641  86  1,405 
Total $ 18,438  $ (9,108) $ 769  $ 11,695  $ 21,794 

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Three Months Ended September 30, 2024
(dollars in thousands) Beginning Balance
Initial PCD on purchased loan
 Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending balance
Commercial mortgage $ 3,676  $ —  $ —  $ —  $ (33) $ 3,643 
Home equity lines and loans 1,114  —  —  1  (10) 1,105 
Residential mortgage 1,059  —  —  —  (78) 981 
Construction 591  —  —  —  (12) 579 
Commercial and industrial 4,811  574  (107) —  601  5,879 
Small business loans 7,498  —  (1,104) 41  732  7,167 
Consumer —  —  (2) 1  1  — 
Leases 2,954  —  (1,227) 109  775  2,611 
Total $ 21,703  $ 574  $ (2,440) $ 152  $ 1,976  $ 21,965 
Nine Months Ended September 30, 2024
(dollars in thousands) Beginning Balance
Initial PCD on purchased loan
 Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending balance
Commercial mortgage $ 4,375  $ —  $ —  $ —  $ (732) $ 3,643 
Home equity lines and loans 998  —  (86) 29  164  1,105 
Residential mortgage 1,020  —  —  —  (39) 981 
Construction 485  —  —  —  94  579 
Commercial and industrial 4,518  574  (1,935) 2  2,720  5,879 
Small business loans 7,005  —  (2,583) 108  2,637  7,167 
Consumer —  —  (3) 3  —  — 
Leases 3,706  —  (4,629) 382  3,152  2,611 
Total $ 22,107  $ 574  $ (9,236) $ 524  $ 7,996  $ 21,965 

Reconciliation of Provision for Credit Losses
The following table provides a reconciliation of the provision for credit losses on the consolidated statements of income between the funded and unfunded components at the dates indicated:
Three Months Ended
September 30,		 Nine Months Ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Provision for credit losses - funded loans $ 2,850  $ 1,976  $ 11,695  $ 7,996 
Provision (recovery) for credit losses - unfunded loans
 —  306  170  (168)
Total provision for credit losses $ 2,850  $ 2,282  $ 11,865  $ 7,828 


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Allowance Allocated by Portfolio Segment
The following tables detail the allocation of the ACL and the carrying value for loans and other finance receivables by portfolio segment based on the methodology used to evaluate the loans and other finance receivables at the dates indicated:
September 30, 2025
Allowance for credit losses Carrying value
(dollars in thousands) Individually evaluated Collectively evaluated Total Individually evaluated Collectively evaluated Total
Commercial mortgage $ 292  $ 3,504  $ 3,796  $ 1,241  $ 871,256  $ 872,497 
Home equity lines and loans —  1,341  1,341  1,583  103,526  105,109 
Residential mortgage 125  1,180  1,305  9,840  236,201  246,041 
Construction —  1,805  1,805  10,308  304,787  315,095 
Commercial and industrial 818  3,018  3,836  7,838  410,231  418,069 
Small business loans 2,111  6,195  8,306  21,256  116,638  137,894 
Consumer —  —  —  —  336  336 
Leases, net —  1,405  1,405  —  49,766  49,766 
Total $ 3,346  $ 18,448  $ 21,794  $ 52,066  $ 2,092,741  $ 2,144,807 
(1) Excludes deferred fees and loans carried at fair value.


December 31, 2024
Allowance for credit losses Carrying value
(dollars in thousands) Individually evaluated Collectively evaluated Total Individually evaluated Collectively evaluated Total
Commercial mortgage $ —  $ 3,469  $ 3,469  $ 809  $ 823,167  $ 823,976 
Home equity lines and loans —  1,147  1,147  1,716  89,005  90,721 
Residential mortgage 29  992  1,021  7,560  230,504  238,064 
Construction —  923  923  8,613  250,940  259,553 
Commercial and industrial 855  2,243  3,098  11,966  355,400  367,366 
Small business loans 1,808  4,496  6,304  12,270  143,505  155,775 
Consumer —  —  —  —  349  349 
Leases, net —  2,476  2,476  —  75,987  75,987 
Total $ 2,692  $ 15,746  $ 18,438  $ 42,934  $ 1,968,857  $ 2,011,791 
(1) Excludes deferred fees and loans carried at fair value.

Credit Quality Indicators
As part of the process of determining the ACL to the different segments of the loan and other finance receivables portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned. These internally assigned grades are as follows:
•Pass – Considered to be satisfactory with no indications of deterioration.
•Special mention – Classified as special mention have a potential weakness that deserves Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or of the institution’s credit position at some future date.
•Substandard – Classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
•Doubtful – Classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values.

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The following tables detail the carrying value of loans and other finance receivables by portfolio segment based on year of origination and the credit quality indicators used to determine the allowance for credit losses at the dates indicated:

September 30, 2025 Revolving Loans Converted to Term Loans Revolving Loans Total
Term Loans and Other Finance Receivables
(dollars in thousands) 2025 2024 2023 2022 2021 Prior
Commercial mortgage
Pass/Watch $ 82,437  $ 122,828  $ 107,235  $ 160,338  $ 137,557  $ 240,683  $ 184  $ —  $ 851,262 
Special Mention —  —  3,423  1,308  —  1,167  —  —  5,898 
Substandard —  —  200  8,127  —  7,010  —  —  15,337 
Total $ 82,437  $ 122,828  $ 110,858  $ 169,773  $ 137,557  $ 248,860  $ 184  $ —  $ 872,497 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Construction
Pass/Watch $ 63,309  $ 132,743  $ 37,291  $ 16,831  $ 3,503  $ 8,339  $ —  $ 32,141  $ 294,157 
Special Mention —  211  —  —  —  —  —  —  211 
Substandard 576  —  1,185  10,365  2,724  2,590  —  3,287  20,727 
Total $ 63,885  $ 132,954  $ 38,476  $ 27,196  $ 6,227  $ 10,929  $ —  $ 35,428  $ 315,095 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ (738) $ (738)
Commercial and industrial
Pass/Watch $ 66,558  $ 66,204  $ 16,788  $ 18,013  $ 9,783  $ 22,696  $ —  $ 191,195  $ 391,237 
Special Mention —  —  —  161  3,939  —  —  4,274  8,374 
Substandard —  —  850  —  1,348  7,596  —  8,664  18,458 
Total $ 66,558  $ 66,204  $ 17,638  $ 18,174  $ 15,070  $ 30,292  $ —  $ 204,133  $ 418,069 
Year-to-date gross charge-offs $ (90) $ (1,330) $ (160) $ (23) $ (264) $ —  $ —  $ (1,268) $ (3,135)
Small business loans
Pass/Watch $ 25,867  $ 18,083  $ 19,050  $ 17,354  $ 10,291  $ 9,565  $ —  $ 10,103  $ 110,313 
Special Mention —  199  77  —  34  —  —  50  360 
Substandard 2,938  1,935  3,328  834  9,879  4,137  —  4,170  27,221 
Total $ 28,805  $ 20,217  $ 22,455  $ 18,188  $ 20,204  $ 13,702  $ —  $ 14,323  $ 137,894 
Year-to-date gross charge-offs $ —  $ (432) $ (550) $ (233) $ (692) $ (944) $ —  $ (575) $ (3,426)
Total by risk rating
Pass/Watch $ 238,171  $ 339,858  $ 180,364  $ 212,536  $ 161,134  $ 281,283  $ 184  $ 233,439  $ 1,646,969 
Special Mention —  410  3,500  1,469  3,973  1,167  —  4,324  14,843 
Substandard 3,514  1,935  5,563  19,326  13,951  21,333  —  16,121  81,743 
Total $ 241,685  $ 342,203  $ 189,427  $ 233,331  $ 179,058  $ 303,783  $ 184  $ 253,884  $ 1,743,555 
Total year-to-date gross charge-offs $ (90) $ (1,762) $ (710) $ (256) $ (956) $ (944) $ —  $ (2,581) $ (7,299)



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December 31, 2024 Revolving Loans Converted to Term Loans Revolving Loans Total
Term Loans and Other Finance Receivables
(dollars in thousands) 2024 2023 2022 2021 2020 Prior
Commercial mortgage
Pass/Watch $ 118,289  $ 99,971  $ 162,831  $ 140,046  $ 92,705  $ 184,157  $ 511  $ 189  $ 798,699 
Special Mention —  3,471  11,258  972  47  767  667  —  17,182 
Substandard —  200  30  —  4,681  3,184  —  —  8,095 
Total $ 118,289  $ 103,642  $ 174,119  $ 141,018  $ 97,433  $ 188,108  $ 1,178  $ 189  $ 823,976 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Construction
Pass/Watch $ 89,417  $ 61,040  $ 38,315  $ 10,935  $ 7,015  $ 4,229  $ 123  $ 34,613  $ 245,687 
Special Mention 160  1,185  2,948  —  —  —  —  —  4,293 
Substandard —  —  1,277  1,605  516  2,608  —  3,567  9,573 
Total $ 89,577  $ 62,225  $ 42,540  $ 12,540  $ 7,531  $ 6,837  $ 123  $ 38,180  $ 259,553 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Commercial and industrial
Pass/Watch $ 81,352  $ 23,658  $ 16,844  $ 15,634  $ 8,499  $ 23,220  $ —  $ 162,980  $ 332,187 
Special Mention —  850  2,599  438  —  —  —  2,455  6,342 
Substandard —  115  3,813  2,365  —  9,978  —  12,566  28,837 
Total $ 81,352  $ 24,623  $ 23,256  $ 18,437  $ 8,499  $ 33,198  $ —  $ 178,001  $ 367,366 
Year-to-date gross charge-offs $ (351) $ (1,136) $ (41) $ —  $ —  $ (1,324) $ —  $ (3,515) $ (6,367)
Small business loans
Pass/Watch $ 35,720  $ 23,714  $ 24,446  $ 22,800  $ 6,699  $ 6,226  $ —  $ 13,818  $ 133,423 
Special Mention —  425  507  2,335  1,332  —  —  —  4,599 
Substandard —  1,804  1,294  8,481  4,085  —  —  2,089  17,753 
Total $ 35,720  $ 25,943  $ 26,247  $ 33,616  $ 12,116  $ 6,226  $ —  $ 15,907  $ 155,775 
Year-to-date gross charge-offs $ —  $ (118) $ (1,986) $ (1,064) $ (352) $ —  $ —  $ (780) $ (4,300)
Total by risk rating
Pass/Watch $ 324,778  $ 208,383  $ 242,436  $ 189,415  $ 114,918  $ 217,832  $ 634  $ 211,600  $ 1,509,996 
Special Mention 160  5,931  17,312  3,745  1,379  767  667  2,455  32,416 
Substandard —  2,119  6,414  12,451  9,282  15,770  —  18,222  64,258 
Total $ 324,938  $ 216,433  $ 266,162  $ 205,611  $ 125,579  $ 234,369  $ 1,301  $ 232,277  $ 1,606,670 
Total year-to-date gross charge-offs $ (351) $ (1,254) $ (2,027) $ (1,064) $ (352) $ (1,324) $ —  $ (4,295) $ (10,667)

The Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at September 30, 2025 and December 31, 2024.


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In addition to credit quality indicators as shown in the above tables, allowance allocations for home equity lines and loans, residential mortgages, consumer loans and leases are also applied based on their year of origination and performance status at the dates indicated:

September 30, 2025 Revolving Loans Total
Term Loans and Other Finance Receivables
(dollars in thousands) 2025 2024 2023 2022 2021 Prior
Home equity lines and loans
Performing $ 825  $ 661  $ 249  $ 605  $ 208  $ 3,247  $ 97,251  $ 103,046 
Nonperforming —  —  —  —  91  342  1,630  2,063 
Total $ 825  $ 661  $ 249  $ 605  $ 299  $ 3,589  $ 98,881  $ 105,109 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Residential mortgage (1)
Performing $ 22,076  $ 11,832  $ 38,129  $ 134,792  $ 15,885  $ 13,487  $ —  $ 236,201 
Nonperforming —  437  674  3,266  739  4,724  —  9,840 
Total $ 22,076  $ 12,269  $ 38,803  $ 138,058  $ 16,624  $ 18,211  $ —  $ 246,041 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Consumer
Performing $ 10  $ 5  $ 25  $ 14  $ —  $ 227  $ 55  $ 336 
Nonperforming —  —  —  —  —  —  —  — 
Total $ 10  $ 5  $ 25  $ 14  $ —  $ 227  $ 55  $ 336 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ (11) $ (11)
Leases, net
Performing $ 2,184  $ 548  $ 11,440  $ 23,274  $ 8,842  $ 1,177  $ —  $ 47,465 
Nonperforming —  —  483  1,275  506  37  —  2,301 
Total $ 2,184  $ 548  $ 11,923  $ 24,549  $ 9,348  $ 1,214  $ —  $ 49,766 
Year-to-date gross charge-offs $ —  $ —  $ (90) $ (1,010) $ (667) $ (31) $ —  $ (1,798)
Total by Payment Performance
Performing $ 25,095  $ 13,046  $ 49,843  $ 158,685  $ 24,935  $ 18,138  $ 97,306  $ 387,048 
Nonperforming —  437  1,157  4,541  1,336  5,103  1,630  14,204 
Total $ 25,095  $ 13,483  $ 51,000  $ 163,226  $ 26,271  $ 23,241  $ 98,936  $ 401,252 
Total year-to-date gross charge-offs $ —  $ —  $ (90) $ (1,010) $ (667) $ (31) $ (11) $ (1,809)
(1) Excludes $14.5 million of loans at fair value.




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December 31, 2024 Revolving Loans Total
Term Loans and Other Finance Receivables
(dollars in thousands) 2024 2023 2022 2021 2020 Prior
Home equity lines and loans
Performing $ 705  $ 332  $ 620  $ 211  $ 328  $ 3,313  $ 83,016  $ 88,525 
Nonperforming —  —  —  91  —  342  1,763  2,196 
Total $ 705  $ 332  $ 620  $ 302  $ 328  $ 3,655  $ 84,779  $ 90,721 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ (86) $ (86)
Residential mortgage (1)
Performing $ 13,878  $ 43,860  $ 140,953  $ 16,761  $ 6,808  $ 8,245  $ —  $ 230,505 
Nonperforming 129  253  2,323  752  357  3,745  —  7,559 
Total $ 14,007  $ 44,113  $ 143,276  $ 17,513  $ 7,165  $ 11,990  $ —  $ 238,064 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Consumer
Performing $ 14  $ 32  $ 22  $ —  $ —  $ 241  $ 40  $ 349 
Nonperforming —  —  —  —  —  —  —  — 
Total $ 14  $ 32  $ 22  $ —  $ —  $ 241  $ 40  $ 349 
Year-to-date gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ (5) $ (5)
Leases, net
Performing $ 741  $ 15,594  $ 36,229  $ 17,253  $ 4,326  $ —  $ —  $ 74,143 
Nonperforming —  298  945  493  108  —  —  1,844 
Total $ 741  $ 15,892  $ 37,174  $ 17,746  $ 4,434  $ —  $ —  $ 75,987 
Year-to-date gross charge-offs $ —  $ (968) $ (3,606) $ (1,077) $ (265) $ —  $ —  $ (5,916)
Total by Payment Performance
Performing $ 15,338  $ 59,818  $ 177,824  $ 34,225  $ 11,462  $ 11,799  $ 83,056  $ 393,522 
Nonperforming 129  551  3,268  1,336  465  4,087  1,763  11,599 
Total $ 15,467  $ 60,369  $ 181,092  $ 35,561  $ 11,927  $ 15,886  $ 84,819  $ 405,121 
Total year-to-date gross charge-offs $ —  $ (968) $ (3,606) $ (1,077) $ (265) $ —  $ (91) $ (6,007)
(1) Excludes $14.5 million of fair value loans.


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Modifications to Borrowers Experiencing Financial Difficulty
An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL on loans and other finance receivables, a change to the allowance for credit losses is generally not recorded upon modification. However, when principal forgiveness is provided, the amortized cost basis of the asset is written off against the ACL. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL.
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and 2024.
Three Months Ended September 30, 2025
Three Months Ended September 30, 2024
Number Amortized Cost Basis % of Total Class of Financing Receivable Related Reserve Number Amortized Cost Basis % of Total Class of Financing Receivable Related Reserve
(dollars in thousands)
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 5 $ 2,780  2.0  % $ —  2 $ 557  0.4  % $ — 
Construction — —  —  % —  1 319  0.1  % — 
Commercial mortgage 3 1,388  0.2  % —  — —  —  % — 
    Total 8 $ 4,168  $ —  3 $ 876  $ — 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Leases
 2 109  0.2  % —  — —  —  % — 
    Total 2 $ 109  $ —  — $ —  $ — 
Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Number Amortized Cost Basis % of Total Class of Financing Receivable Related Reserve Number Amortized Cost Basis % of Total Class of Financing Receivable Related Reserve
(dollars in thousands)
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 9 $ 5,186  3.8  % $ —  3 $ 722  0.5  % $ — 
Construction 4 11,068  3.5  % 868  1 319  0.1  % — 
Commercial mortgage 4 2,347  0.3  % —  — —  —  % — 
Commercial & industrial 3 1,949  0.5  % —  5 2,737  0.8  % — 
    Total 20 $ 20,550  $ 868  9 $ 3,778  $ — 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 1 $ 440  0.3  % $ —  1 $ 1,271  0.8  % $ 942 
Construction 1 3,287  1.0  % 474  — —  —  % — 
Commercial & industrial — —  —  % —  4 2,276  0.6  % — 
Leases 20 953  1.9  % —  — —  —  % — 
Residential mortgage 2 909  0.3  % —  — —  —  % — 
    Total 24 $ 5,589  $ 474  5 $ 3,547  $ 942 


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The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and 2024.
Three Months Ended September 30, 2025
 Three Months Ended September 30, 2024
Number Financial Effect Number Financial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 5 Extend maturity date 2 Extend maturity date
Construction — Extend maturity date 1 Extend maturity date
Commercial mortgage 3 Extend maturity date —
    Total 8 3
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Leases 2 Extend maturity date —
    Total 2 —
Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Number Financial Effect Number Financial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 9 Extend maturity date 3 Extend maturity date
Construction 4 Extend maturity date and allow additional funding 1 Extend maturity date
Commercial mortgage 4 Extend maturity date and allow additional funding —
Commercial & industrial 3 Extend maturity date 5 Extend maturity date and allow additional funding
    Total 20 9
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Small business loans 1 Extend maturity date 1 Extend maturity date
Construction 1 Extend maturity date —
Commercial & industrial — 4 Extend maturity date and allow additional funding
Leases 20 Extend maturity date —
Residential mortgage 2 Extend maturity date —
    Total 24 5

There were 10 and 3 modifications granted to borrowers experiencing financial difficulty during the three months ended September 30, 2025 and September 30, 2024, respectively. There were 44 and 14 modifications granted to borrowers experiencing financial difficulty for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The increase period over period in assistance provided to borrowers experiencing financial difficulty was seen in small business loans, leases, and construction and commercial mortgage loans. The primary factor for the financial difficulty generally comes from higher interest rates (small business loans) or higher rates for longer periods (which for construction, caused the borrower to go through their interest reserve quicker).

There were zero loans that had payment defaults during the nine months ended September 30, 2025, respectively, and zero during the nine months ended September 30, 2024, that were modified in the 12 months before default to borrowers experiencing financial difficulty. There were $1.3 million in commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the nine months ended September 30, 2025 and no commitments to lend additional funds to such borrowers during the nine months ended September 30, 2024.











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The following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of September 30, 2025 and 2024.

September 30, 2025
Current 30-59 days past due 60-89 days past due 90+ days past due and still accruing Nonaccrual loans and leases Total
(dollars in thousands)
Small business loans $ 5,186  $ —  $ —  $ —  $ 2,711  $ 7,897 
Construction 11,068  —  —  —  6,011  17,079 
Commercial mortgage 2,347  —  —  —  —  2,347 
Commercial & industrial 1,949  —  —  —  492  2,441 
Leases —  —  —  —  953  953 
Residential mortgage —  —  —  —  1,310  1,310 
    Total $ 20,550  $ —  $ —  $ —  $ 11,477  $ 32,027 

September 30, 2024
Current 30-59 days past due 60-89 days past due 90+ days past due and still accruing Nonaccrual loans and leases Total
(dollars in thousands)
Small business loans $ 722  $ —  $ —  $ —  $ 1,303  $ 2,025 
Construction 319  —  —  —  —  319 
Commercial & industrial 2,737  —  —  —  2,276  5,013 
    Total $ 3,778  $ —  $ —  $ —  $ 3,579  $ 7,357 


(6)    Short-Term Borrowings and Long-Term Debt
The Corporation’s short-term borrowings generally consist of federal funds purchased and short-term borrowings extended under agreements with the FHLB or other correspondent banks. The Corporation has 4 unsecured borrowing facilities with correspondent banks for up to $56 million in total. Federal funds purchased generally represent one-day borrowings. The Corporation had $0 and $0 in Federal funds purchased at September 30, 2025 and December 31, 2024. The Corporation also has a facility with the Federal Reserve Bank discount window of $5 million. This facility is fully secured by investment securities and pledged loans. There were no borrowings under this at September 30, 2025 and December 31, 2024. The Holding Company has a revolving line of credit with ACBB of $5 million that is used to fund operating activities of the Corporation.

The following table presents short-term borrowings at the dates indicated:
(dollars in thousands) Maturity
date		 Interest
rate		 September 30,
2025		 December 31,
2024
FHLB Mid-term Repo Fixed 10/14/2025 5.16% $ 9,492  $ 9,492 
FHLB Mid-term Repo Fixed 12/22/2025 4.23% 8,935  8,935 
FHLB Open Repo Plus Weekly 6/15/2026 4.47% 89,999  75,205 
FHLB Mid-term Repo Fixed 7/14/2026 4.57% 15,245  — 
ACBB Holding Company Revolving LOC 7/24/2026 7.50% 3,000  5,000 
Total Short-Term Borrowings $ 126,671  $ 98,632 

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The following table presents long-term borrowings at the dates indicated:
(dollars in thousands) Maturity
date		 Interest
rate		 September 30,
2025		 December 31,
2024
FHLB Mid-term Repo Fixed 5/20/2027 4.70% $ 10,594  $ 10,594 
FHLB Mid-term Repo Fixed 7/14/2026 4.57% —  15,245 
Total Long-Term Borrowings $ 10,594  $ 25,839 


The FHLB has also issued $183.2 million of letters of credit to the Corporation for the benefit of the Corporation’s public deposit funds and loan customers. These letters of credit expire throughout the remainder of 2025.
The Corporation has a maximum borrowing capacity with the FHLB of $746.0 million as of September 30, 2025 and $699.3 million as of December 31, 2024. All advances and letters of credit from the FHLB are secured by a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.

(7)    Servicing Assets
The Corporation sells certain residential mortgage loans and the guaranteed portion of certain SBA loans to third parties and retains servicing rights and receives servicing fees. All such transfers are accounted for as sales. When the Corporation sells a residential mortgage loan, it does not retain any portion of that loan and its continuing involvement in such transfers is limited to certain servicing responsibilities. While the Corporation may retain a portion of certain sold SBA loans, its continuing involvement in the portion of the loan that was sold is limited to certain servicing responsibilities. When the contractual servicing fees on loans sold with servicing retained are expected to be more than adequate compensation to a servicer for performing the servicing, a capitalized servicing asset is recognized.
Residential Mortgage Loans
The related MSR asset is amortized over the period of the estimated future net servicing life of the underlying assets. MSRs are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the MSR. The Corporation serviced $10 million and $122 million of residential mortgage loans as of September 30, 2025 and December 31, 2024, respectively. During the three and nine months ended September 30, 2025, the Corporation recognized servicing fee income of $5 thousand and $129 thousand, compared to $572 thousand and $1.7 million, during the three and nine months ended September 30, 2024.
Changes in the MSR balance are summarized as follows:
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Balance at beginning of the period $ 71  $ 8,026  $ 1,124  $ 8,621 
Servicing rights capitalized 14  48  22  80 
Amortization of servicing rights (3) (292) (85) (919)
Sale of servicing assets —  —  (979) — 
Balance at end of the period $ 82  $ 7,782  $ 82  $ 7,782 

The decrease in MSR balance in the table above from September 30, 2024 to September 30, 2025 was the result of the Corporation's sale of residential mortgage loan servicing rights during the fourth quarter of 2024, as well as during the second quarter of 2025. During the fourth quarter of 2024 the Corporation sold approximately $6.6 million of residential mortgage loan servicing rights associated with $777.2 million of serviced loans. During the second quarter of 2025 the Corporation sold approximately $979 thousand of residential mortgage loan servicing rights associated with $110.2 million of serviced loans.
The Corporation uses assumptions and estimates in determining the fair value of MSRs. These assumptions include prepayment speeds and discount rates. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At September 30, 2025, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 9.07% and a discount rate equal to 9.50%. At December 31, 2024, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 10.97% and a discount rate equal to 9.50%.
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The sensitivity of the current fair value of the residential mortgage servicing rights to immediate 10% and 20% adverse changes in key economic assumptions are included in the following table.
(dollars in thousands) September 30,
2025		 December 31,
2024
Fair value of residential mortgage servicing rights $ 109  $ 1,494 
Weighted average life (months) 47 43
Prepayment speed 9.07  % 10.97  %
Impact on fair value:
10% adverse change $ (5) $ (63)
20% adverse change (9) (121)
Discount rate 9.50  % 9.50  %
Impact on fair value:
10% adverse change $ (4) $ (53)
20% adverse change (8) (102)
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change.
SBA Loans
SBA loan servicing assets are amortized over the period of the estimated future net servicing life of the underlying assets. SBA loan servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the SBA loan servicing asset. The Corporation serviced $294.1 million and $246.3 million of SBA loans, as of September 30, 2025 and December 31, 2024, respectively.
Changes in the SBA loan servicing asset balance are summarized as follows:
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Balance at beginning of the period $ 3,587  $ 3,315  $ 3,258  $ 3,127 
Servicing rights capitalized 454  208  1,339  661 
Amortization of servicing rights (275) (325) (865) (785)
Change in valuation allowance (3) (7) 31  188 
Balance at end of the period $ 3,763  $ 3,191  $ 3,763  $ 3,191 
Activity in the valuation allowance for SBA loan servicing assets was as follows:
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Valuation allowance, beginning of period $ (40) $ (73) $ (74) $ (268)
Impairment (3) (7) (3) (7)
Recovery —  —  34  195 
Valuation allowance, end of period $ (43) $ (80) $ (43) $ (80)
The Corporation uses assumptions and estimates in determining the fair value of SBA loan servicing rights. These assumptions include prepayment speeds, discount rates, and other assumptions. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At September 30, 2025, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 17.30% and a discount rate equal to 12.68%. At December 31, 2024, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 17.18% and a discount rate equal to 13.40%.
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The sensitivity of the current fair value of the SBA loan servicing rights to immediate 10% and 20% adverse changes in key economic assumptions are included in the following table.
(dollars in thousands) September 30,
2025		 December 31,
2024
Fair value of SBA loan servicing rights $ 4,346  $ 3,670 
Weighted average life (years) 3.1 3.2
Prepayment speed 17.30  % 17.18  %
Impact on fair value:
10% adverse change $ (197) $ (166)
20% adverse change (377) (317)
Discount rate 12.68  % 13.40  %
Impact on fair value:
10% adverse change $ (97) $ (81)
20% adverse change (189) (159)
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the SBA servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change.

(8)    Fair Value Measurements and Disclosures
The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Corporation’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation techniques or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
In accordance with this guidance, the Corporation groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.
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Table of Contents

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis.
Securities
The fair value of securities available-for-sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.
Mortgage Loans Held for Sale
The fair value of loans held for sale is based on secondary market prices.
Mortgage Loans Held for Investment
The fair value of mortgage loans held for investment is based on the price secondary markets are currently offering for similar loans using observable market data.
Derivative Financial Instruments
The fair values of forward commitments and interest rate swaps are based on market pricing and therefore are considered Level 2. Derivatives classified as Level 3 consist of interest rate lock commitments related to mortgage loan commitments. The determination of fair value includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. A significant increase or decrease in the external market price would result in a significantly higher or lower fair value measurement.

The following table presents the fair value of financial assets measured at fair value on a recurring basis by level within the fair value hierarchy at the dates indicated:
September 30, 2025
(dollars in thousands) Total Level 1 Level 2 Level 3
Assets
Securities available for sale:
U.S. asset backed securities $ 26,907  $ —  $ 26,907  $ — 
U.S. government agency MBS 27,315  —  27,315  — 
U.S. government agency CMO 57,196  —  57,196  — 
State and municipal securities 39,614  —  39,614  — 
U.S. Treasuries 16,068  16,068  —  — 
Non-U.S. government agency CMO 9,332  —  9,332 
Corporate bonds 17,836  —  17,836  — 
Equity investments 2,150  —  2,150  — 
Mortgage loans held for sale 28,016  —  28,016  — 
Mortgage loans held for investment 14,454  —  14,454  — 
Interest rate lock commitments 351  —  —  351 
Forward commitments 17  —  —  17 
Customer derivatives - interest rate swaps 2,053  —  2,053  — 
Fair Value Hedge 16  —  16  — 
Total $ 241,325  $ 16,068  $ 224,889  $ 368 
Liabilities
Interest rate lock commitments $ 61  $ —  $ —  $ 61 
Forward commitments 20  —  —  20 
Customer derivatives - interest rate swaps 2,082  —  2,082  — 
Risk Participation Agreements 12  —  12  — 
Interest rate swaps 304  —  304  — 
Total $ 2,479  $ —  $ 2,398  $ 81 

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December 31, 2024
(dollars in thousands) Total Level 1 Level 2 Level 3
Assets
Securities available for sale:
U.S. asset backed securities $ 29,844  $ —  $ 29,844  $ — 
U.S. government agency MBS 20,871  —  20,871  — 
U.S. government agency CMO 45,613  —  45,613  — 
State and municipal securities 36,696  —  36,696  — 
U.S. Treasuries 15,450  15,450  —  — 
Non-U.S. government agency CMO 11,729  —  11,729  — 
Corporate bonds 14,101  —  14,101  — 
Equity investments 2,086  —  2,086  — 
Mortgage loans held for sale 32,413  —  32,413  — 
Mortgage loans held for investment 14,501  —  14,501  — 
Interest rate lock commitments 216  —  —  216 
Forward commitments 30  —  30  — 
Customer derivatives - interest rate swaps 2,755  —  2,755  — 
Fair Value Hedge 3  —  3  — 
Interest rate swaps 9  —  9  — 
Total $ 226,317  $ 15,450  $ 210,651  $ 216 
Liabilities
Interest rate lock commitments $ 35  $ —  $ —  $ 35 
Forward commitments 2,745  —  2,745  — 
Customer derivatives - interest rate swaps 91  —  91  — 
Risk Participation Agreements 61  —  61  — 
Total $ 2,932  $ —  $ 2,897  $ 35 
The following table presents assets measured at fair value on a nonrecurring basis at the dates indicated:
(dollars in thousands) September 30,
2025		 December 31,
2024
Mortgage servicing rights $ 82  $ 1,124 
SBA loan servicing rights 3,763  3,258 
Individually evaluated loans (1)
Commercial and industrial 629 1,944
     Construction 5,720 —
Small business loans 3,018 2,284
Total $ 13,212  $ 8,610 
(1) Individually evaluated loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. The increase in individually evaluated commercial and industrial loans noted above was due to reassessing how we evaluate the impairment on a loan relationship to now be based on the fair value of collateral.
The following table details the valuation techniques for Level 3 individually evaluated loans.
(dollars in thousands) Fair Value Valuation Technique Significant Unobservable Input Range of Inputs
September 30, 2025 $ 9,367  Appraisal of collateral Management adjustments on appraisals for property type and recent activity
2%-33% discount
December 31, 2024 4,228  Appraisal of collateral Management adjustments on appraisals for property type and recent activity
2%-33% discount
Below is management’s estimate of the fair value of all financial instruments, whether carried at cost or fair value on the Corporation’s balance sheet. The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful.
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The following methods and assumptions were used to estimate the fair value of the Corporation’s financial instruments:
Cash and Cash Equivalents
The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values.
Loans Receivable
The fair value of loans receivable is estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value below is reflective of an exit price.
Servicing Assets
The Corporation estimates the fair value of mortgage servicing rights and SBA loan servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the interest rates of the portfolios serviced. These servicing rights are classified within Level 3 in the fair value hierarchy based upon management’s assessment of the inputs. The Corporation reviews the servicing rights portfolios on a quarterly basis for impairment.
Individually Evaluated Loans
Individually evaluated loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third party appraisals of the properties, or discounted cash flows based upon the expected proceeds. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Individually evaluated loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the ACL policy.
Accrued Interest Receivable and Payable
The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.
Deposit Liabilities
The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.
Short-Term Borrowings
The carrying amounts of short-term borrowings approximate their fair values.
Long-Term Debt
Fair values of FHLB advances and the acquisition purchase note payable are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.

Subordinated Debt
Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity.
Off-Balance Sheet Financial Instruments
Off-balance sheet instruments are primarily comprised of loan commitments, which are generally priced at market at the time of funding. Fees on commitments to extend credit and stand-by letters of credit are deemed to be immaterial and these instruments are expected to be settled at face value or expire unused. It is impractical to assign any fair value to these instruments and as a result they are not included in the table below. Fair values assigned to the notional value of interest rate lock commitments and forward sale contracts are based on market quotes.
Derivative Financial Instruments
The fair value of forward commitments and interest rate swaps is based on market pricing and therefore are considered Level 2. Derivatives classified as Level 3 consist of interest rate lock commitments related to mortgage loan commitments. The determination of fair value includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. A significant increase or decrease in the external market price would result in a significantly higher or lower fair value measurement.

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The following table presents the estimated fair values of the Corporation’s financial instruments at the dates indicated:
Fair Value
Hierarchy Level		 September 30, 2025 December 31, 2024
(dollars in thousands) Carrying
amount		 Fair value Carrying
amount		 Fair value
Financial assets:
Cash and cash equivalents Level 1 $ 39,989  $ 39,989  $ 27,462  $ 27,462 
Mortgage loans held for sale Level 2 28,016  28,016  32,413  32,413 
Loans and other finance receivables, net of ACL Level 3 2,148,391  2,091,630  2,015,936  1,967,986 
Mortgage loans held for investment Level 2 14,454  14,454  14,501  14,501 
Financial liabilities:
Deposits Level 2 $ 2,131,116  $ 2,169,100  $ 2,005,368  $ 2,014,200 
Borrowings Level 2 137,265  137,800  124,471  133,200 
Subordinated debentures Level 2 49,822  49,522  49,743  48,572 
The following table includes a rollforward of interest rate lock commitments for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the periods indicated.
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Balance at beginning of the period $ 346  $ 451  $ 216  $ 214 
Increase in value 5  (32) 135  205 
Balance at end of the period $ 351  $ 419  $ 351  $ 419 
The following table details the valuation techniques for Level 3 interest rate lock commitments.
(dollars in thousands) Fair Value Valuation Technique Significant Unobservable Input Range of Inputs Weighted Average
September 30, 2025 $ 351  Market comparable pricing Pull through
1 - 99%
 89.56%
December 31, 2024 216  Market comparable pricing Pull through
1 - 99%
 83.27%

(9)    Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Corporation is exposed to certain risk arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Corporation’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation’s known or expected cash receipts and its known or expected cash payments principally related to the Corporation’s loan portfolio.
Interest Rate Swaps
The Corporation uses interest rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation’s credit exposure on interest rate swaps includes changes in fair value and any collateral that is held by a third party.
In June 2023 the Corporation entered into three interest rate swaps classified as cash flow hedges with notional amounts of $25 million each, to hedge the interest payments paid on short term borrowings. Under the terms of the three swap agreements, the Corporation pays average fixed rates of 4.070%, 4.027% and 4.117%, and receives variable rates in return indexed to SOFR. The swaps mature between May, June, and December 2026. The Corporation performed an assessment of the hedge for effectiveness at the inception of the hedge and performs an assessment on a recurring basis and determined that the derivative currently is and is expected to be highly effective in offsetting changes in cash flows of the hedged item. For the three and nine months ended September 30, 2025, approximately $17 thousand and $167 thousand, net of tax, is recorded in total comprehensive income as an unrealized gain and an unrealized loss, respectively, while for the three and nine months ended September 30, 2024, approximately $1.2 million and $264 thousand, net of tax, is recorded in total comprehensive income as unrealized losses. These amounts could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to September 30, 2025.
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At September 30, 2025 and December 31, 2024, the combined notional amount of the interest rate swaps was $75 million and $75 million, respectively, and the fair value was a liability of $304 thousand and $52 thousand, respectively.
In August 2024 the Corporation entered into an interest rate swap classified as a fair value hedge with a notional amount of $40 million, to hedge the interest payments received on a pool of residential mortgage loans held in portfolio. Under the terms of the swap agreement, the Corporation pays an average fixed rate of 3.60% and receives a variable rate in return indexed to SOFR. The swap matures August 2027. The Corporation performed an assessment of the hedge for effectiveness at the inception of the hedge and performs an assessment on a recurring basis and determined that the derivative currently is and is expected to be highly effective in offsetting changes in fair value of the hedged item. For the three and nine months ended September 30, 2025, approximately $9 thousand and $13 thousand, respectively, net of tax, is recorded as a fair values adjustment. These amounts could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to September 30, 2025.

Mortgage Banking Derivatives
In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation may enter into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Interest rate lock commitments and forward commitments are recorded within other assets/liabilities on the consolidated balance sheets, with changes in fair values during the period recorded within net change in the fair value of derivative instruments on the consolidated statements of income.
Customer Derivatives
Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain customers to swap a fixed rate product for a variable rate product, or vice versa. The Corporation executes interest rate derivatives with commercial banking customers to facilitate their respective risk management strategies. Those interest rate derivatives are simultaneously hedged by offsetting derivatives that the Corporation executes with a third party, such that the Corporation minimizes its net interest rate risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.
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The following table presents a summary of notional amounts and fair values of derivative financial instruments at the dates indicated:
September 30, 2025 December 31, 2024
(dollars in thousands) Balance Sheet Line Item Notional Amount Asset (Liability) Fair Value Notional Amount Asset (Liability) Fair Value
Interest Rate Lock Commitments
Positive fair values Other assets $ 56,137  $ 351  $ 35,820  $ 216 
Negative fair values Other liabilities 14,146  (61) 9,049  (35)
Total $ 70,283  $ 290  $ 44,869  $ 181 
Forward Commitments
Positive fair values Other assets $ 7,750  $ 17  $ 4,250  $ 30 
Negative fair values Other liabilities 5,250  (20) 500  — 
Total $ 13,000  $ (3) $ 4,750  $ 30 
Customer Derivatives - Interest Rate Swaps
Positive fair values Other assets $ 54,489  $ 2,053  $ 47,676  $ 2,755 
Negative fair values Other liabilities 54,489  (2,082) 47,676  (2,745)
Total $ 108,978  $ (29) $ 95,352  $ 10 
Customer Derivatives - Risk Participation Agreements
Positive fair values Other assets $ —  $ —  $ —  $ — 
Negative fair values Other liabilities 13,435  (12) 7,382  (91)
Total $ 13,435  $ (12) $ 7,382  $ (91)
Fair Value Hedge
Positive fair values Other assets $ 40,000  $ 16  $ 40,000  $ 3 
Negative fair values Other liabilities —  —  —  — 
Total $ 40,000  $ 16  $ 40,000  $ 3 
Interest Rate Swaps
Positive fair values Other assets $ —  $ —  $ 25,000  $ 9 
Negative fair values Other liabilities 75,000  (304) 50,000  (61)
Total $ 75,000  $ (304) $ 75,000  $ (52)
Total derivative financial instruments $ 320,696  $ (42) $ 267,353  $ 81 
Interest rate lock commitments are considered Level 3 in the fair value hierarchy, while the forward commitments and interest rate swaps are considered Level 2 in the fair value hierarchy.
The following table presents a summary of the net change in the fair value of derivative instruments:
Three months ended
September 30,		 Nine months ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Interest Rate Lock Commitments $ (17) $ (30) $ 109  $ 172 
Forward Commitments 108  4  (33) 47 
Customer Derivatives - Interest Rate Swaps 7  (30) (39) (5)
Customer Derivatives - Risk Participation Agreements 31  (46) 139  (38)
Net change in the fair value of derivative instruments $ 129  $ (102) $ 176  $ 176 
Net realized losses on derivative hedging activities were $166 thousand and $129 thousand, for the three and nine months ended September 30, 2025, and net realized losses of $197 thousand and $279 thousand, for the three and nine months ended September 30, 2024, and are included in non-interest income in the consolidated statements of income.
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(10)    Segments
ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations.
Our Banking segment (“Bank”) consists of commercial and retail banking. The Banking segment generates interest income from its lending and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of available for sale investment securities, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income, title insurance fees, and other less significant non-interest income.
Meridian Wealth (“Wealth”), a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future. The unit generates non-interest income through advisory fees.
Meridian’s mortgage banking segment (“Mortgage”) consists of 8 loan production offices throughout suburban Philadelphia and Maryland. The Mortgage segment originates 1 – 4 family residential mortgages and sells nearly all of its production to third party investors. The unit generates net interest income on the loans it originates and holds temporarily, then earns fee income (primarily gain on sales) at the time of the sale. The unit also recognizes income from document preparation fees, changes in portfolio pipeline fair values and net hedging gains (losses), if any.
The table below summarizes income and expenses, directly attributable to each business line, which have been included in the statement of operations. Total assets for each segment is also provided.
Segment Information
Three Months Ended September 30, 2025
Three Months Ended September 30, 2024
(dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total
Interest income $ 42,584  $ —  $ 525  $ 43,109  $ 39,555  $ —  $ 764  $ 40,319 
Interest expense 19,612  (43) 424  19,993  21,404  (46) 719  22,077 
Net interest income 22,972  43  101  23,116  18,151  46  45  18,242 
Provision for credit losses 2,850  —  —  2,850  2,282  —  —  2,282 
Net interest income after provision 20,122  43  101  20,266  15,869  46  45  15,960 
Non-interest Income:
Mortgage banking income 76  —  5,838  5,914  (7) —  6,481  6,474 
Wealth management income —  1,610  —  1,610  —  1,447  —  1,447 
SBA loan income 1,431  —  —  1,431  544  —  —  544 
Net change in fair values 38  —  229  267  (76) —  1,108  1,032 
Net gain (loss) on hedging activity —  —  (166) (166) —  —  (197) (197)
Other 818  —  79  897  897  —  634  1,531 
Non-interest income 2,363  1,610  5,980  9,953  1,358  1,447  8,026  10,831 
Non-interest expense:
Salaries and employee benefits 8,270  817  4,526  13,613  7,292  557  4,980  12,829 
Occupancy and equipment 748  2  241  991  783  18  442  1,243 
Professional fees 947  62  83  1,092  961  14  131  1,106 
Data processing and software
 1,441  44  380  1,865  1,129  44  380  1,553 
Advertising and promotion 657  105  115  877  518  96  103  717 
Pennsylvania bank shares tax 250  4  —  254  178  3  —  181 
Other
 2,518  107  229  2,854  2,426  108  383  2,917 
Non-interest expense 14,831  1,141  5,574  21,546  13,287  840  6,419  20,546 
Income before income taxes $ 7,654  $ 512  $ 507  $ 8,673  $ 3,940  $ 653  $ 1,652  $ 6,245 
Total Assets $ 2,478,694  $ 12,559  $ 49,877  $ 2,541,130  $ 2,319,072  $ 10,543  $ 58,106  $ 2,387,721 

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Segment Information
Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
(Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total
Interest income $ 122,141  $ —  $ 1,347  $ 123,488  $ 114,349  $ —  $ 1,650  $ 115,999 
Interest expense 58,440  (116) 1,113  59,437  62,821  (76) 1,557  64,302 
Net interest income 63,701  116  234  64,051  51,528  76  93  51,697 
Provision for credit losses 11,865  —  —  11,865  7,828  —  —  7,828 
Net interest income after provision 51,836  116  234  52,186  43,700  76  93  43,869 
Non-interest Income:
Mortgage banking income 126  —  14,943  15,069  147  —  15,381  15,528 
Wealth management income (1) 4,638  —  4,637  1  4,207  —  4,208 
SBA loan income 4,167  —  —  4,167  2,315  —  —  2,315 
Gain on sale of MSRs 32  —  383  415  —  —  —  — 
Net change in fair values 101  —  846  947  (42) —  1,122  1,080 
Net loss on hedging activity —  —  (129) (129) —  —  (279) (279)
Other 2,879  —  580  3,459  2,487  —  2,720  5,207 
Non-interest income 7,304  4,638  16,623  28,565  4,908  4,207  18,944  28,059 
Non-interest expense:
Salaries and employee benefits 23,663  2,030  12,484  38,177  20,624  1,666  12,549  34,839 
Occupancy and equipment 2,269  12  1,085  3,366  2,256  81  1,369  3,706 
Professional fees 2,643  124  252  3,019  2,617  31  985  3,633 
Data processing and software
 3,799  129  1,122  5,050  3,440  125  1,026  4,591 
Advertising and promotion 2,301  297  335  2,933  1,879  261  314  2,454 
Pennsylvania bank shares tax 779  13  —  792  715  14  —  729 
Other 7,185  303  821  8,309  6,431  301  1,054  7,786 
Non-interest expense 42,639  2,908  16,099  61,646  37,962  2,479  17,297  57,738 
Income before income taxes $ 16,501  $ 1,846  $ 758  $ 19,105  $ 10,646  $ 1,804  $ 1,740  $ 14,190 
Total Assets $ 2,478,694  $ 12,559  $ 49,877  $ 2,541,130  $ 2,319,072  $ 10,543  $ 58,106  $ 2,387,721 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis in conjunction with the unaudited consolidated interim financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024 included in Meridian Corporation’s Annual Report on Form 10-K filed with the SEC.
Forward-Looking Statements
Meridian Corporation may from time to time make written or oral “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation: credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; the impact of uncertain or changing political conditions or any current or future federal government shutdown and uncertainty regarding the federal government's debt limit; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; legislation affecting the financial services industry as a whole, and Meridian Corporation, in particular; changes in accounting policies, practices or guidance; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements.
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Meridian Corporation cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Meridian Corporation’s filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Meridian Corporation or by or on behalf of Meridian Bank.

Critical Accounting Policies and Estimates
Our critical accounting policies are described in detail in the "Critical Accounting Policies" section within Item 7 of our 2024 Annual Form 10-K. The SEC defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. See Note 1, "Summary of Significant Accounting Policies" for additional information on the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans and leases, now referred to as the allowance for credit losses. Management considers the measurement of the allowance for credit losses to be a critical accounting policy.

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

Changes in Financial Condition - September 30, 2025 Compared to December 31, 2024
•Total assets increased $155.3 million, or 6.5%, to $2.5 billion as of September 30, 2025.
•Portfolio loans increased $133.0 million, or 6.6%, to $2.2 billion as of September 30, 2025.
•Mortgage loans held for sale decreased $4.4 million, or 13.6%, to $28.0 million as of September 30, 2025.
•Total deposits increased $125.7 million or 6.3% to $2.1 billion as of September 30, 2025.
•The Corporation raised $2.8 million in common equity through an ATM offering during the nine months ended September 30, 2025.
•The Corporation earned net income of $14.7 million during the nine months ended September 30, 2025 and returned $4.2 million of capital to Meridian shareholders during the nine months ended September 30, 2025 through a $0.125 dividend per share in each of the first three quarters of the year.

Three Month Results of Operations - September 30, 2025 Compared to the Same Period in 2024
•Net income was $6.7 million, or $0.58 per diluted share, up $1.9 million, or 40.4%, driven by higher net interest income, offset somewhat by a higher provision for credit losses and higher non-interest expense.
•The return on average assets and return on average equity were 1.04% and 14.42%, respectively, for the third quarter 2025, compared to 0.80% and 11.41%, respectively, for the third quarter 2024.
•Net interest income increased $4.9 million, or 26.7%, to $23.1 million and the net interest margin increased to 3.77% from 3.20%, due to the impact of deposit and borrowing cost declines as well as the in increase in average noninterest-bearing deposits over the period.
•The overall provision for credit losses increased $568 thousand when comparing the third quarter 2025 to the third quarter 2024. While net-charge offs were down over this period, the increase in provision was driven by providing for loan growth, an increase in non-performing loans, and adjusting for macro-economic impacts due to the current economic and market uncertainty.
•Non-interest income decreased $878 thousand, or 8.1%, to $10.0 million driven by a $560 thousand decline in mortgage banking income, a $731 thousand decline the fair value of mortgage related items, partially offset by a $887 thousand increase in SBA loan income.
•Non-interest expense increased $1.0 million, or 4.9%, to $21.5 million due to a $784 thousand increase in salaries and employee benefits, and an increase of $312 thousand in data processing and software expense.

Nine Month Results of Operations - September 30, 2025 Compared to the Same Period in 2024
•Net income was $14.7 million, or $1.28 per diluted share, an increase of $3.9 million, or 36.3%, driven by a higher level of net interest income and non-interest income, offset somewhat by a higher provision for credit losses and higher non-interest expense.
•The return on average assets and return on average equity were 0.79% and 10.98%, respectively, for the nine months ended September 30, 2025, compared to 0.62% and 8.84%, respectively, for the nine months ended September 30, 2024.
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•Net interest income increased $12.4 million, or 23.9%, to $64.1 million and the net interest margin increased to 3.59% from 3.12%, largely due to the impact of deposit and borrowing cost declines as well as the in increase in average noninterest-bearing deposits over the period.
•The overall provision for credit losses increased $4.0 million when comparing the nine months ended September 30, 2025 to nine months ended September 30, 2024 as we provided for loan growth, experienced an increase in non-performing loans, and while adjusting for macro-economic impacts due to the current economic and market uncertainty.
•Non-interest income increased $506 thousand, or 1.8%, to $28.6 million driven by a $1.9 million increase in SBA loan income, a $415 thousand net gain on sale of MSRs, and a $429 thousand increase in wealth management income, partially offset by a $459 thousand decline in mortgage banking income, and an overall $1.8 million decline in other non-interest income.
•Non-interest expense increased $3.9 million, or 6.8%, to $61.6 million due to a $3.3 million increase in salaries and employee benefits, and an increase of $523 thousand in other non-interest expense, partially offset by a decrease of $614 thousand in professional fees.


Key Performance Ratios
The following table presents key financial performance ratios for the periods indicated:
Three months ended
September 30,		 Nine months ended
September 30,
2025 2024 2025 2024
Return on average assets, annualized 1.04  % 0.80  % 0.79  % 0.62  %
Return on average equity, annualized 14.42  % 11.41  % 10.98  % 8.84  %
Net interest margin (tax effected yield) 3.77  % 3.20  % 3.59  % 3.12  %
Basic earnings per share $ 0.59  $ 0.43  $ 1.30  $ 0.97 
Diluted earnings per share $ 0.58  $ 0.42  $ 1.28  $ 0.96 
The following table presents certain key period-end balances and ratios at the dates indicated:
(dollars in thousands, except per share amounts) September 30,
2025		 December 31,
2024
Book value per common share $ 16.33  $ 15.26 
Tangible book value per common share (1)
 $ 16.02  $ 14.93 
Allowance as a percentage of loans and other finance receivables (excluding loans at fair value) 1.01  % 0.91  %
Tier I capital to risk weighted assets 8.41  % 8.13  %
Tangible common equity to tangible assets ratio (1)
7.27  % 7.05  %
Loans and other finance receivables, net of fees and costs $ 2,162,845  $ 2,030,437 
Total assets $ 2,541,130  $ 2,385,867 
Total stockholders’ equity $ 188,029  $ 171,522 
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for Non-GAAP to GAAP reconciliation.
Components of Net Income
Net income is comprised of five major elements:
•Net Interest Income, or the difference between the interest income earned on loans, leases and investments and the interest expense paid on deposits and borrowed funds;
•Provision For Credit Losses, or the amount added to the Allowance to provide for current expected credit losses on portfolio loans and other finance receivables;
•Non-interest Income, which is made up primarily of mortgage banking income, wealth management income, SBA loan sale income, fair value adjustments, gains and losses from the sale of loans, gains and losses from the sale of investment securities available for sale and other fees from loan and deposit services;
•Non-interest Expense, which consists primarily of salaries and employee benefits, occupancy, professional fees, advertising & promotion, data processing, information technology, loan expenses, and other operating expenses; and
•Income Taxes, which include state and federal jurisdictions.
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NET INTEREST INCOME
Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three and nine months ended September 30, 2025 and 2024, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.
Analyses of Interest Rates and Interest Differential
The table below present the major asset and liability categories on an average daily balance basis for the periods presented, along with interest income, interest expense and key rates and yields on a tax equivalent basis.
For the Three Months Ended September 30,
(dollars in thousands) 2025 2024
Average Balance Interest Income/ Expense Yields/ Rates Average Balance Interest Income/ Expense Yields/ Rates
Assets:
Cash and cash equivalents $ 37,001  $ 412  4.42  % $ 30,519  $ 416  5.43  %
Investment securities - taxable 172,404  1,895  4.36  145,845  1,480  4.04 
Investment securities - tax exempt (1)
 53,909  400  2.94  56,408  397  2.80 
Loans held for sale 33,296  536  6.39  47,177  766  6.46 
Loans held for investment (1)
 2,146,651  39,942  7.38  1,997,574  37,339  7.44 
Total loans 2,179,947  40,478  7.37  2,044,751  38,105  7.41 
Total interest-earning assets 2,443,261  43,185  7.01  % 2,277,523  40,398  7.06  %
Noninterest earning assets 91,304  95,738 
Total assets $ 2,534,565  $ 2,373,261 
Liabilities and stockholders' equity:
Interest-bearing demand deposits $ 173,023  $ 1,314  3.01  % $ 132,257  $ 1,390  4.18  %
Money market and savings deposits 973,952  8,322  3.39  800,406  8,391  4.17 
Time deposits 743,472  7,782  4.15  781,172  9,532  4.85 
Total interest - bearing deposits 1,890,447  17,418  3.66  1,713,835  19,313  4.48 
Borrowings 123,695  1,495  4.80  160,063  1,985  4.93 
Subordinated debentures 49,802  1,080  8.60  49,908  779  6.21 
Total interest-bearing liabilities 2,063,944  19,993  3.84  1,923,806  22,077  4.57 
Noninterest-bearing deposits 253,374  246,310 
Other noninterest-bearing liabilities 34,005  37,836 
Total liabilities 2,351,323  2,207,952 
Total stockholders' equity 183,242  165,309 
Total stockholders' equity and liabilities $ 2,534,565  $ 2,373,261 
Net interest income and spread (1)
 $ 23,192  3.17  $ 18,321  2.49 
Net interest margin (1)
 3.77  % 3.20  %
(1)Yields and net interest income are reflected on a tax-equivalent basis.
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For the Nine Months Ended September 30,
(dollars in thousands) 2025 2024
Average Balance Interest Income/ Expense Yields/ Rates Average Balance Interest Income/ Expense Yields/ Rates
Assets:
Cash and cash equivalents $ 43,574  $ 1,452  4.46  % $ 25,712  $ 1,047  5.44  %
Investment securities - taxable 166,431  5,380  4.32  136,275  4,055  3.97 
Investment securities - tax exempt (1)
 54,350  1,150  2.83  57,007  1,204  2.82 
Loans held for sale 28,567  1,364  6.38  33,914  1,661  6.54 
Loans held for investment (1)
 2,100,305  114,364  7.28  1,971,595  108,274  7.34 
Total loans 2,128,872  115,728  7.27  2,005,509  109,935  7.32 
Total interest-earning assets 2,393,227  123,710  6.91  % 2,224,503  116,241  6.98  %
Noninterest earning assets 89,446  96,228 
Total assets $ 2,482,673  $ 2,320,731 
Liabilities and stockholders' equity:
Interest-bearing demand deposits $ 165,309  $ 3,897  3.15  % $ 134,814  $ 4,036  4.00  %
Money market and savings deposits 944,118  24,227  3.43  786,345  24,512  4.16 
Time deposits 733,526  23,463  4.28  744,025  27,148  4.87 
Total interest - bearing deposits 1,842,953  51,587  3.74  1,665,184  55,696  4.47 
Borrowings 128,526  4,636  4.82  169,265  6,271  4.95 
Subordinated debentures 49,775  3,214  8.63  49,877  2,335  6.25 
Total interest-bearing liabilities 2,021,254  59,437  3.93  1,884,326  64,302  4.56 
Noninterest-bearing deposits 249,127  236,239 
Other noninterest-bearing liabilities 33,954  37,739 
Total liabilities 2,304,335  2,158,304 
Total stockholders' equity 178,338  162,427 
Total stockholders' equity and liabilities $ 2,482,673  $ 2,320,731 
Net interest income and spread (1)
 $ 64,273  2.98  $ 51,939  2.42 
Net interest margin (1)
 3.59  % 3.12  %
(1)Yields and net interest income are reflected on a tax-equivalent basis.

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Rate / Volume Analysis
The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the three and nine months ended September 30, 2025 as compared to the same periods in 2024, allocated by rate and volume. Changes in interest income and/or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.
Three Months Ended September 30,
Nine Months Ended September 30,
2025 Compared to 2024
(dollars in thousands) Rate Volume Total Rate Volume Total
Interest income:
Cash and cash equivalents $ (83) $ 79  $ (4) $ (217) $ 622  $ 405 
Investment securities - taxable 130  285  415  372  953  1,325 
Investment securities - tax exempt (1)
 21  (18) 3  2  (56) (54)
Loans held for sale (6) (224) (230) (41) (256) (297)
Loans held for investment (1)
 (172) 2,775  2,603  (925) 7,015  6,090 
Total loans (178) 2,551  2,373  (966) 6,759  5,793 
Total interest income $ (110) $ 2,897  $ 2,787  $ (809) $ 8,278  $ 7,469 
Interest expense:
Interest-bearing demand deposits $ (442) $ 366  $ (76) $ (952) $ 813  $ (139)
Money market and savings deposits (1,707) 1,638  (69) (4,741) 4,456  (285)
Time deposits (1,307) (443) (1,750) (3,307) (378) (3,685)
Total interest - bearing deposits (3,456) 1,561  (1,895) (9,000) 4,891  (4,109)
Borrowings (49) (441) (490) (162) (1,473) (1,635)
Subordinated debentures 303  (2) 301  884  (5) 879 
Total interest expense $ (3,202) $ 1,118  $ (2,084) $ (8,278) $ 3,413  $ (4,865)
Interest differential $ 3,092  $ 1,779  $ 4,871  $ 7,469  $ 4,865  $ 12,334 
(1)Yields and net interest income are reflected on a tax-equivalent basis.

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

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

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

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

Nine Months Ended September 30, 2025 Compared to the Same Period in 2024
For the nine months ended September 30, 2025 as compared to the same period in 2024, tax-equivalent interest income increased $7.5 million as favorable volume changes contributed $8.3 million to interest income, partially offset by rate changes that had a $809 thousand unfavorable impact on interest income. The loans held for investment average balances increased $128.7 million, leading to a favorable volume impact on interest income of $7.0 million. Growth in the loans held for investment portfolio was led by average balance increases in commercial mortgage loans ($76.2 million), commercial and industrial loans ($32.7 million), construction loans ($27.3 million), and home equity lines and loans ($17.1 million).
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The change in rates led to decreased yields on loans held for sale (down 16 basis points) and loans held for investment (down 6 basis points) that unfavorably impacted interest income by $966 thousand, overall.

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

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

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


PROVISION FOR CREDIT LOSSES
Three and Nine Months Ended September 30, 2025 Compared to the Same Period in 2024
The total provision for credit losses increased $568 thousand on a net basis for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The provision on funded loans increased $874 thousand over the three month comparable period in 2024 driven by provisioning for loan growth and charge-offs, as well as an increase in baseline loss rates on certain portfolios. There was no provision on unfunded loan commitments for the three months ended September 30, 2025, while for the three months September 30, 2024 there was a $306 thousand provision on unfunded loan commitments.
The total provision for credit losses increased $4.0 million on a net basis for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The provision on funded loans increased $3.7 million over the nine month comparable period in 2024 for similar reasons noted above for the three month comparable period. There was a $170 thousand provision on unfunded loan commitments for the nine months ended September 30, 2025, while for the nine months September 30, 2024 there was an unfunded provision reversal of $168 thousand.

NON-INTEREST INCOME
Three Months Ended September 30, 2025 Compared to the Same Period in 2024
The following table presents the components of non-interest income for the periods indicated:
Three Months Ended
(dollars in thousands) September 30,
2025		 September 30,
2024		 $ Change % Change
Mortgage banking income $ 5,914  $ 6,474  $ (560) (8.6) %
Wealth management income 1,610  1,447  163  11.3  %
SBA loan income 1,431  544  887  163.1  %
Earnings on investment in life insurance 246  222  24  10.8  %
Net change in the fair value of derivative instruments 129  (102) 231  (226.5) %
Net change in the fair value of loans held-for-sale (75) 169  (244) (144.4) %
Net change in the fair value of loans held-for-investment 213  965  (752) (77.9) %
Net (loss) gain on hedging activity (166) (197) 31  (15.7) %
Other 651  1,309  (658) (50.3) %
Total non-interest income $ 9,953  $ 10,831  $ (878) (8.1) %
Total non-interest income decreased $878 thousand largely due to a decrease in mortgage banking income, fair value adjustments, and other income, compared to the prior year quarterly period. Mortgage banking income decreased $560 thousand over the comparable quarterly period due to a decrease in volume of loans sold of $39.9 million. On a positive note, the overall margin improved by 11 basis points, attributed to changes in the program mix and investor pricing. Other income decreased $658 thousand due to a lower level of other mortgage segment related income.
Partially offsetting the overall decrease in non-interest income was an increase in SBA loan income. SBA loan income increased $887 thousand over this period as the value of SBA loans sold for the quarter-ended September 30, 2025 was $13.4 million, or 112.8%, higher than the quarter-ended September 30, 2024, while the gross margin on sale was 7.4% for the quarter-ended September 30, 2025 compared to 7.9% for the quarter-ended September 30, 2024.
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Nine Months Ended September 30, 2025 Compared to the Same Period in 2024
The following table presents the components of non-interest income for the periods indicated:
Nine Months Ended
(dollars in thousands) September 30,
2025		 September 30,
2024		 $ Change % Change
Mortgage banking income $ 15,069  $ 15,528  $ (459) (3.0) %
Wealth management income 4,637  4,208  429  10.2  %
SBA loan income 4,167  2,315  1,852  80.0  %
Earnings on investment in life insurance 708  644  64  9.9  %
Net gain on sale of MSRs 415  —  415  100.0  %
Net change in the fair value of derivative instruments 176  176  —  —  %
Net change in the fair value of loans held-for-sale 198  138  60  43.5  %
Net change in the fair value of loans held-for-investment 573  766  (193) (25.2) %
Net (loss) gain on hedging activity (129) (279) 150  (53.8) %
Other 2,751  4,563  (1,812) (39.7) %
Total non-interest income $ 28,565  $ 28,059  $ 506  1.8  %
Total non-interest income increased $506 thousand as the result of several drivers, including an increase in SBA loan income, increased wealth management income from our Meridian Wealth Partners segment, and a net gain on sale of MSRs. These increases were partially offset by a decline in other non-interest income and mortgage banking income.
SBA loan income increased $1.9 million over this period as the value of SBA loans sold for the nine months ended September 30, 2025 was $37.4 million, or 94.7%, higher than the nine months ended September 30, 2024, while the gross margin on sale was 7.0% for the nine months ended September 30, 2025 compared to 8.2% for the nine months ended September 30, 2024. Wealth management income increased $429 thousand as the value of the markets improved over this period. From the MSR sale discussed above, there was a net gain on sale of $415 thousand over the nine month comparable period.
Other non-interest income decreased $1.8 million due to lower levels of FHLB stock dividend income, broker fees and other mortgage segment related income, partially offset by an increase in business credit card fee income and swap fee income.

NON-INTEREST EXPENSE
Three Months Ended September 30, 2025 Compared to the Same Period in 2024
The following table presents the components of non-interest expense for the periods indicated:
Three Months Ended
(dollars in thousands) September 30,
2025		 September 30,
2024		 $ Change % Change
Salaries and employee benefits $ 13,613  $ 12,829  $ 784  6.1  %
Occupancy and equipment 991  1,243  (252) (20.3) %
Professional fees 1,092  1,106  (14) (1.3) %
Data processing and software 1,865  1,553  312  20.1  %
Advertising and promotion 877  717  160  22.3  %
Pennsylvania bank shares tax 254  181  73  40.3  %
Other 2,854  2,917  (63) (2.2) %
Total non-interest expense $ 21,546  $ 20,546  $ 1,000  4.9  %
Total non-interest expense increased $1.0 million, or 4.9%, largely attributable to an increase in salaries and employee benefits and data processing and software expense, partially offset by a decline in occupancy and equipment expense. Salaries and employee benefits increased $784 thousand due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of 4 full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits. There was a decline of $252 thousand in occupancy and equipment expense due to the early termination of office lease space, as discussed in prior earnings filings. Data processing and software expense increased $312 thousand due to an increase in customer transaction volume and the impact of Meridian's continued investment in technology.


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Nine Months Ended September 30, 2025 Compared to the Same Period in 2024
The following table presents the components of non-interest expense for the periods indicated:
Nine Months Ended
(dollars in thousands) September 30,
2025		 September 30,
2024		 $ Change % Change
Salaries and employee benefits $ 38,177  $ 34,839  $ 3,338  9.6  %
Occupancy and equipment 3,366  3,706  (340) (9.2) %
Professional fees 3,019  3,633  (614) (16.9) %
Data processing and software 5,050  4,591  459  10.0  %
Advertising and promotion 2,933  2,454  479  19.5  %
Pennsylvania bank shares tax 792  729  63  8.6  %
Other 8,309  7,786  523  6.7  %
Total non-interest expense $ 61,646  $ 57,738  $ 3,908  6.8  %
Total non-interest expense increased $3.9 million, or 6.8%, largely attributable to an increase in salaries and employee benefits and other non-interest expense. Data processing and software expenses, along with advertising expenses increased over this period as well. Salaries and employee benefits increased $3.3 million due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of 4 full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits.
Professional fees decreased $614 thousand over the prior period due to the results of cost control efforts on certain internal audit fees, combined with a lower level of OREO expense over the comparable period. Data processing and software expense increased $459 thousand due to an increase in customer transaction volume and the impact of Meridian's continued investment in technology. Advertising and promotion expense increased $479 thousand over the comparable period due to a multimedia marketing campaign run during the current year, combined with the impact from an increase in customer engagement activities. Other non-interest expense increased $523 thousand due to an increase in certain loan related expenses, combined with an increase in employee travel and training activities.

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

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted into law in the U.S. The Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.

BALANCE SHEET ANALYSIS
As of September 30, 2025, total assets were $2.5 billion which increased $155.3 million, or 6.5%, from December 31, 2024. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:
(dollars in thousands) September 30,
2025		 December 31,
2024		 $ Change % Change
Mortgage loans held for sale $ 28,016  $ 32,413  $ (4,397) (13.6) %
Real estate loans:
     Commercial mortgage 872,497  823,976  48,521  5.9 
     Home equity lines and loans 105,109  90,721  14,388  15.9 
     Residential mortgage 260,495  252,565  7,930  3.1 
Construction 315,095  259,553  55,542  21.4 
Total real estate loans 1,553,196  1,426,815  126,381  8.9 
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(dollars in thousands) September 30,
2025		 December 31,
2024		 $ Change % Change
Commercial and industrial 418,069  367,366  50,703  13.8 
Small business loans 137,894  155,775  (17,881) (11.5)
Consumer 336  349  (13) (3.7)
Leases, net 49,766  75,987  (26,221) (34.5)
Total loans and other finance receivables $ 2,159,261  $ 2,026,292  $ 132,969  6.6 
Total loans and leases $ 2,187,277  $ 2,058,705  $ 128,572  6.2  %
Total loans and other finance receivables increased $133.0 million, to $2.2 billion as of September 30, 2025, from $2.0 billion as of December 31, 2024. Overall portfolio loan growth was 6.6% since December 31, 2024, or 8.7% on an annualized basis for 2025. Commercial real estate loans increased $48.5 million, or 5.9%, construction loans increased $55.5 million, or 21.4%, SBA loans decreased $17.9 million, or 11.5% due to loan sales described above, and commercial and industrial loans increased $50.7 million, or 13.8%.
As of September 30, 2025, included within the commercial real estate loans total of $872.5 million was $282.4 million of owner-occupied commercial loans, as well as $125.0 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

The following table presents the major categories of deposits at the dates indicated:
(Dollars in thousands) September 30,
2025		 December 31,
2024		 $ Change % Change
Noninterest-bearing deposits $ 239,614  $ 240,858  $ (1,244) (0.5) %
Interest-bearing deposits:
Interest-bearing demand deposits 151,973  141,439  10,534  7.4  %
Money market and savings deposits 996,126  913,536  82,590  9.0  %
Time deposits 743,403  709,535  33,868  4.8  %
Total interest-bearing deposits $ 1,891,502  $ 1,764,510  $ 126,992  7.2  %
Total deposits $ 2,131,116  $ 2,005,368  $ 125,748  6.3  %
Total deposits increased $125.7 million, or 6.3%, since December 31, 2024. Total interest-bearing deposits increased $127.0 million during the period, while noninterest-bearing deposits decreased $1.2 million. The overall increase in interest-bearing accounts was largely due to customer preference for money market deposits which carry higher interest rates than demand deposits. Time deposits increased $33.9 million, or 4.8%, largely due customer preference for the higher term interest rates offered by these products.
The majority of Meridian's deposit base is comprised of business deposits, 50%, with consumer deposits amounting to 14% at September 30, 2025. Municipal deposits at 13% and brokered deposits at 23% provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At September 30, 2025, 61% of business accounts and 90% of consumer accounts were fully insured by the FDIC. The municipal deposits are 100% collateralized and brokered deposits are 100% FDIC insured. The level of uninsured deposits for the entire deposit base was 21% at September 30, 2025.

Capital
Consolidated stockholders’ equity of the Corporation was $188.0 million, or 7.4% of total assets as of September 30, 2025, as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024. On October 23, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable November 17, 2025 to shareholders of record as of November 10, 2025.
In February 2025, the Corporation entered into an Equity Distribution Agreement with D.A. Davidson & Co., as distribution agent, relating to the sale of up to 1,000,000 shares of its common stock, from time to time, pursuant to an at-the-market (ATM) program. During the three months ended September 30, 2025, the Corporation sold, and subsequently settled the issuance of 188,478 shares of common stock directly through the distribution agent under its ATM at an average price per share of $15.75. Total net proceeds from these sales of common stock amounted to $2.8 million during the three months ended September 30, 2025. As of September 30, 2025, 811,522 shares of common stock remain available for issuance under the ATM program.

Under the Community Bank Leverage Ratio framework, a community banking organization that is less than $10 billion in total consolidated assets, and has limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9% can elect to report a single regulatory capital ratio. The Corporation has elected to be measured under this framework for Bank capital adequacy and had ratios of 9.41% and 9.21% at September 30, 2025 and December 31, 2024, respectively.
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The Corporation is exempt from CBLR.

The following table presents the Bank’s capital ratios and the minimum capital requirements to be considered “well capitalized” by regulators at the periods indicated:
Bank Well-capitalized minimum
September 30,
2025		 December 31,
2024
Tier 1 leverage ratio 9.41  % 9.21  % 5.00  %
Common tier 1 risk-based capital ratio 10.52  % 10.33  % 6.50  %
Tier 1 risk-based capital ratio 10.52  % 10.33  % 8.00  %
Total risk-based capital ratio 11.54  % 11.20  % 10.00  %
In December 2018, the Federal Reserve announced that a banking organization that experiences a reduction in retained earnings due to the CECL adoption as of the beginning of the fiscal year in which CECL is adopted may elect to phase in the regulatory capital impact of adopting CECL. Transitional amounts are calculated for the following items: retained earnings, temporary difference deferred tax assets and credit loss allowances eligible for inclusion in regulatory capital. When calculating regulatory capital ratios, 25% of the transitional amounts are phased in during the first year. An additional 25% of the transitional amounts are phased in over each of the next two years and at the beginning of the fourth year, the day-one effects of CECL are completely reflected in regulatory capital. As of September 30, 2025, Meridian has phased in 75% of the day-one effects of CECL.




Asset Quality Summary
The ratio of non-performing assets to total assets was 2.32% as of September 30, 2025, up from 1.90% reported as of December 31, 2024. Total non-performing loans of $55.4 million as of September 30, 2025, increased $10.3 million from $45.1 million as December 31, 2024. Included in non-performing loans at September 30, 2025 is $11.8 million of SBA guaranteed loans. The overall increase was the result of risk rating downgrades leading to non-performing loan classification mainly in the SBA loan portfolio and to a lesser degree in construction loans and residential mortgages, partially offset by a $4.1 million decline in non-performing commercial loans due to the repossession of a billboard on a advertising based commercial loan relationship and the foreclosure of real estate collateral from another commercial loan. The repossessed billboard was transferred into other repossessed assets with a value of $2.4 million, after adjustment for estimated costs to sell, while the foreclosed real estate from another commercial loan was transferred into OREO with a value of $1.3 million, after adjustment for estimated costs to sell.
Meridian realized net charge-offs of 0.09% of total average loans for the three months ending September 30, 2025, which was down slightly from 0.11% reported for the same period in 2024. Net charge-offs for the quarter ended September 30, 2025 were $1.9 million, compared to net charge-offs of $2.3 million for the quarter ended September 30, 2024. Net charge-offs for the current quarter comprised of $2.1 million in charge-offs, with $214 thousand in recoveries, and were split between commercial loans, leases, and SBA loans.
The ratio of allowance for credit losses to total loans and other finance receivables, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.01% as of September 30, 2025 compared to 0.91% as of December 31, 2024. As of September 30, 2025 there were specific reserves of $3.3 million against non-performing loans, a increase from $2.7 million as of December 31, 2024. The increase in ACL coverage over this period was driven by an increase in baseline quantitative and qualitative reserving for loan growth and economic factors, as well as an increase in baseline loss rates for certain portfolios.
The Corporation is proactive with its loan review process that utilizes the engagement of an independent outside loan review firm, which helps identify developing credit issues. Proactive steps that are taken include the procurement of additional collateral (preferably outside the current loan structure) whenever possible and frequent contact with the borrower. The Corporation believes that timely identification of credit issues and appropriate actions early in the process serve to mitigate overall risk of loss.
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Nonperforming Assets and Related Ratios
The following table presents nonperforming assets and related ratios for the periods indicated:
(dollars in thousands) September 30,
2025		 December 31,
2024
Non-performing assets:
Nonaccrual loans and leases:
Real estate loans:
Commercial mortgage $ 1,241  $ 809 
Home equity lines and loans 1,583  1,716 
Residential mortgage 10,350  7,900 
Construction 10,308  8,613 
Total real estate loans 23,482  19,038 
Commercial and industrial 7,838  11,966 
Small business loans 21,256  12,270 
Leases 2,301  1,851 
Total nonaccrual loans and leases 54,877  45,125 
Loans 90+ days past due and still accruing 480  — 
Other real estate owned 1,297  159 
Repossessed assets 2,417  117 
Total non-performing assets $ 59,071  $ 45,401 
Asset quality ratios:
Non-performing assets to total assets 2.32  % 1.90  %
Non-performing loans to:
Total loans and other finance receivables 2.56  % 2.22  %
Total loans and other finance receivables (excluding loans at fair value) (1)
 2.58  % 2.24  %
Non-performing loans (excluding guaranteed portion of SBA loans) to total loans and leases (1)
 1.99  % 1.87  %
Allowance for credit losses to:
Total loans and other finance receivables 1.01  % 0.91  %
Total loans and other finance receivables (excluding loans at fair value) (1)
 1.01  % 0.91  %
Non-performing loans 39.37  % 40.86  %
Total loans and leases $ 2,190,861  $ 2,062,850 
Total loans and other finance receivables 2,162,845  2,030,437 
Total loans and other finance receivables (excluding loans at fair value) 2,148,391  2,015,936 
Allowance for credit losses 21,794  18,438 
(1) The allowance for credit losses to total loans and other finance receivables (excluding loans at fair value) ratio is a non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation of this measure to its most comparable GAAP measure.

Liquidity
Management maintains liquidity to meet depositors’ needs for funds, to satisfy or fund loan commitments, and for other operating purposes. Meridian’s foundation for liquidity is a stable and loyal customer deposit base, cash and cash equivalents, and a marketable investment portfolio that provides periodic cash flow through regular maturities and amortization or that can be used as collateral to secure funding.

In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the Federal Reserve Bank of Philadelphia to meet short-term liquidity needs and has access to approximately $680.4 million in liquidity from these sources. Through its relationship at the Federal Reserve, Meridian had available credit of approximately $5.0 million at September 30, 2025. As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of September 30, 2025, Meridian’s maximum borrowing capacity with the FHLB was $746.0 million.
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At September 30, 2025, Meridian had borrowed $134.3 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $183.2 million against its available credit lines. At September 30, 2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $292.1 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.

Discussion of Segments
As of September 30, 2025, the Corporation has three principal segments as defined by FASB ASC 280, “Segment Reporting.” The segments are Banking, Mortgage Banking and Wealth Management (see Note 10 in the accompanying Notes to Unaudited Consolidated Financial Statements).
The Banking Segment recorded income before tax of $7.7 million and $16.5 million for the three and nine months ended September 30, 2025, as compared to income before tax of $3.9 million and $10.6 million for the same periods in 2024. The Banking Segment provided 88.3% and 86.4% of the Corporation’s pre-tax profit for the three and nine months ended September 30, 2025, as compared to 63.1% and 75.0% for the same periods in 2024.
The Wealth Management Segment recorded income before tax of $512 thousand and $1.8 million for the three and nine months ended September 30, 2025, as compared to income before tax of $653 thousand and $1.8 million for the same periods in 2024.
The Mortgage Banking Segment recorded income before tax of $507 thousand and $758 thousand for the three and nine months ended September 30, 2025, as compared to income before tax of $1.7 million and $1.7 million for the same periods in 2024. Mortgage Banking income and expenses related to loan originations and sales increased over the comparable periods due to higher loan origination and sales volume.

Off Balance Sheet Risk
The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit, and loan repurchase commitments.
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 September 30, 2025 were $617.3 million as compared to $603.1 million at December 31, 2024.
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 September 30, 2025 amounted to $15.4 million as compared to $15.5 million at December 31, 2024.
Estimated fair values of the Corporation’s off-balance sheet instruments are based on fees and rates currently charged to enter into similar loan agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Since fees and rates charged for off-balance sheet items are at market levels when set, there is no material difference between the stated amount and the estimated fair value of off-balance sheet instruments.
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 September 30, 2025, and one loan of $425 thousand for the nine months ended September 30, 2025, while the Corporation repurchased one loan and 5 loans of $257 thousand and $1.1 million in total for the three and nine months ended September 30, 2024, respectively.

Non-GAAP Financial Measures
Meridian believes that non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate performance trends and the adequacy of common equity. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for performance and financial condition measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Meridian’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Our management used the measure of the tangible common equity ratio to assess our capital strength. We believe that this non-GAAP financial measure is useful to investors because, by removing the impact of our goodwill and other intangible assets, it allows investors to more easily assess our capital adequacy. This non-GAAP financial measure should not be considered a substitute for any regulatory capital ratios and may not be comparable to other similarly titled measures used by other companies.

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The table below provides the non-GAAP reconciliation for our tangible common equity ratio and tangible book value per common share:
(dollars in thousands, except share data) September 30,
2025		 December 31,
2024
Total stockholders' equity (GAAP) $ 188,029  $ 171,522 
Less: Goodwill and intangible assets (3,513) (3,666)
Tangible common equity (non-GAAP) 184,516  167,856 
Total assets (GAAP) 2,541,130  2,385,867 
Less: Goodwill and intangible assets (3,513) (3,666)
Tangible assets (non-GAAP) $ 2,537,617  $ 2,382,201 
Stockholders' equity to total assets (GAAP) 7.40  % 7.19  %
Tangible common equity to tangible assets (non-GAAP) 7.27  % 7.05  %
Shares outstanding 11,517  11,240 
Book value per share (GAAP) $ 16.33  $ 15.26 
Tangible book value per share (non-GAAP) $ 16.02  $ 14.93 
The following is a reconciliation of the allowance for credit losses to total loans held for investment ratio at September 30, 2025. This is considered a non-GAAP measure as the calculation excludes the impact of loans held for investment that are fair valued as these loan types are not included in the allowance for credit losses calculation.
(dollars in thousands) September 30,
2025		 December 31,
2024
Allowance for credit losses (GAAP) $ 21,794  $ 18,438 
Loans and other finance receivables (GAAP) 2,162,845  2,030,437 
Less: Loans at fair value (14,454) (14,501)
Loans and other finance receivables, excluding loans at fair value (non-GAAP) $ 2,148,391  $ 2,015,936 
Allowance for credit losses to loans and other finance receivables (GAAP) 1.01  % 0.91  %
Allowance for credit losses to loans and other finance receivables, excluding loans at fair value (non-GAAP) 1.01  % 0.91  %

The following is a reconciliation of non-performing loans, excluding the guaranteed portion of SBA loans that are classified as non-performing loans, to total loans and leases at September 30, 2025. This is considered a non-GAAP measure as the calculation excludes the impact of SBA guarantees from non-performing loans.
(dollars in thousands) September 30,
2025		 December 31,
2024
Non-performing loans (GAAP)
 $ 55,357  $ 45,125 
Less: Guaranteed portion of SBA loans classified as non-performing
 $ (11,811) $ (6,520)
Non-performing loans, excluding guaranteed portion of SBA loans (non-GAAP)
 $ 43,546  $ 38,605 
Total loans and leases
 $ 2,190,861  $ 2,062,850 
Non-performing loans (excluding guaranteed portion of SBA loans) to total loans and leases
 1.99  % 1.87  %


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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Simulations of Net Interest Income
We use a simulation model on a quarterly basis to measure and evaluate potential changes in our net interest income resulting from various hypothetical interest rate scenarios. Our model incorporates various assumptions that management believes to be reasonable, but which may have a significant impact on results such as:
•The timing of changes in interest rates;
•Shifts or rotations in the yield curve;
•Repricing characteristics for market rate sensitive instruments on the balance sheet;
•Differing sensitivities of financial instruments due to differing underlying rate indices;
•Varying timing of loan prepayments for different interest rate scenarios;
•The effect of interest rate floors, periodic loan caps and lifetime loan caps;
•Overall growth rates and product mix of interest-earning assets and interest-bearing liabilities.
Because of the limitations inherent in any approach used to measure interest rate risk, simulated results are not intended to be used as a forecast of the actual effect of a change in market interest rates on our results, but rather as a means to better plan and execute appropriate ALM strategies.
Potential increase (decrease) to our net interest income between a flat interest rate scenario and hypothetical rising and declining interest rate scenarios, measured over a one-year period as of the dates indicated, are presented in the following table which assuming rate shifts occur upward and downward on the yield curve in even increments over the first twelve months (ramp) followed by rates held constant thereafter.
September 30,
Changes in Market Interest Rates 2025 2024
+300 basis points over next 12 months 1.64  % 2.04  %
+200 basis points over next 12 months 1.34  % 1.62  %
+100 basis points over next 12 months 0.78  % 0.96  %
No Change
-100 basis points over next 12 months (0.61) % (1.31) %
-200 basis points over next 12 months (0.85) % (2.54) %
-300 basis points over next 12 months (0.26) % (3.10) %
The above interest rate simulation suggests as of September 30, 2025 that the Corporation’s balance sheet is neutrally positioned over the next 12 months. The simulated exposure to a change in interest rates is manageable and well within policy guidelines. The results continue to drive our funding strategy of increasing relationship-based accounts (core deposits) and utilizing term deposits to fund short to medium duration assets.
Simulation of economic value of equity
To quantify the amount of capital required to absorb potential losses in value of our interest-earning assets and interest-bearing liabilities resulting from adverse market movements, we calculate economic value of equity on a quarterly basis. We define economic value of equity as the net present value of our balance sheet’s cash flow, and we calculate economic value of equity by discounting anticipated principal and interest cash flows under the prevailing and hypothetical interest rate environments. Potential changes to our economic value of equity between a flat rate scenario and hypothetical rising and declining rate scenarios are presented in the following table. The projections assume shifts upward and downward in the yield curve of 100, 200 and 300 basis points occurring immediately.
September 30,
Changes in Market Interest Rates 2025 2024
+300 basis points 9  % 9  %
+200 basis points 8  % 9  %
+100 basis points 5  % 6  %
No Change
-100 basis points (8) % (9) %
-200 basis points (21) % (25) %
-300 basis points (40) % (47) %
This economic value of equity profile at September 30, 2025 suggests that an instantaneous decrease in rates would have a negative impact on value of the Banks' balance sheet. While an instantaneous shift in interest rates is used in this analysis to provide an estimate of exposure, we believe that a gradual shift in interest rates would have a much more modest impact.
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Since economic value of equity measures the discounted present value of cash flows over the estimated lives of instruments, the change in economic value of equity does not directly correlate to the degree that earnings would be impacted over a shorter time horizon.
The results of our net interest income and economic value of equity simulation analysis are purely hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. For example, if the timing and magnitude of interest rate changes differ from that projected, our net interest income might vary significantly. Non-parallel yield curve shifts or changes in interest rate spreads would also cause net interest income to be different from that projected. An increasing interest rate environment could reduce projected net interest income if deposits and other short-term interest-bearing liabilities reprice faster than expected or faster than our interest-earning assets. Actual results could differ from those projected if interest-earning assets and interest-bearing liabilities grow faster or slower than estimated, or otherwise change its mix of products. Actual results could also differ from those projected if actual repayment speeds in the loan portfolio are substantially different than those assumed in the simulation model. Furthermore, the results do not take into account the impact of changes in loan prepayment rates on loan discount accretion. If loan prepayment rates were to increase, any remaining loan discounts would be recognized into interest income. This would result in a current period offset to declining net interest income caused by higher rate loans prepaying. Finally, these simulation results do not contemplate all the actions that management may undertake in response to changes in interest rates, such as changes to loan, investment, deposit, funding or other strategies.
Management has and continues to employ strategies to mitigate risk in the Net Interest Income and Economic Value simulations.

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, the Corporation’s CEO and CFO have concluded that the Corporation’s disclosure controls and procedures were effective as of September 30, 2025 to ensure that the information required to be disclosed by the Corporation in the reports that the Corporation files or submits under the Exchange Act is recorded, processed, summarized, and reported completely and accurately within the time periods specified in SEC rules and forms.
Changes in Internal Control Over Financial Reporting
There was no change in the Corporation’s internal control over financial reporting identified during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.


PART II–OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors.

There have been no material changes in the risk factors faced by the Corporation from those disclosed in the Corporation’s Annual
Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None

Item 3. Defaults upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable
Item 5. Other Information.
None
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Item 6. Exhibits.
EXHIBIT INDEX
Exhibit
Number		 Description
3.1
3.2


31.1
31.2
32
101.INS XBRL Instance Document – The instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 104 Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 7, 2025 Meridian Corporation
By: /s/ Christopher J. Annas
Christopher J. Annas
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Denise Lindsay
Denise Lindsay
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
52
EX-31.1 2 mrbk_ex31x1x9302025.htm EX-31.1 Document

Exhibit 31.1
RULE 13a -14(a) CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER
I, Christopher J. Annas, certify that:
1.           I have reviewed this Quarterly Report on Form 10-Q of Meridian Corporation;
2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:   November 7, 2025
 /s/ Christopher J. Annas
Christopher J. Annas
President and Chief Executive Officer
(Principal Executive Officer)


EX-31.2 3 mrbk_ex31x2x9302025.htm EX-31.2 Document

Exhibit 31.2
RULE 13a-14(a) CERTIFICATION
OF THE PRINCIPAL FINANCIAL OFFICER
I, Denise Lindsay, certify that:
1.           I have reviewed this Quarterly Report on Form 10-Q of Meridian Corporation;
2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:   November 7, 2025
 /s/ Denise Lindsay
Denise Lindsay
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)


EX-32 4 mrbk_ex32x9302025.htm EX-32 Document

Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Meridian Corporation on Form 10-Q for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Meridian Corporation.
/s/ Christopher J. Annas
Christopher J. Annas
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Denise Lindsay
Denise Lindsay
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date:    November 7, 2025