MRBK 10-K & 10-Q changes, risk factors and insider trading

Our business and operations, which primarily consist of bankingcommercial banking, mortgage banking, and wealth management activities, including lending money to customers in the form of loans and borrowing money from customers in the form of deposits, are sensitive to general business and economic conditions in the United States generally, and in our local markets in particular. If economic conditions in the United States or any of our local markets weaken, our growth and profitability from our operations could be constrained. The current economic environment is characterized by interest rates nearat historicallya highmoderate levels,level after 3 rate cuts by the Fed during 2025, which impacts our ability to attract deposits and to generate attractive earnings through our loan and investment portfolios. All of these factors can individually or in the aggregate be detrimental to our business, and the interplay between these factors can be complex and unpredictable. Unfavorable market conditions can result in a deterioration in the credit quality of our borrowers and the demand for our products and services, an increase in the number of delinquencies, defaults and charge-offs, additional provisions for loan losses, a decline in the value of our collateral, and an overall material adverse effect on the quality of our loan portfolio.

As of December 31, 2024,2025, we owned $208.1$226 million of investment securities, which consisted primarily of our positions in U.S. government and government-sponsored enterprises and federal agency obligations, mortgage and asset-backed securities, corporate bonds, and municipal securities. As a result of inflationary pressures and the resulting rapid increases in interest rates in 2023 and early 2024, the trading value of previously issued government and other fixed income securities hashad declined significantly. TheAnd while interest rates have moderated in 2025, the Corporation conducts a periodic review of the securities portfolio to determine if any decline in the estimated fair value of any security below its cost basis is considered impaired. Factors which are considered in the analysis include, but are not limited to, the extent to which the fair value is less than the amortized cost basis, the financial condition, credit rating and future prospects of the issuer, whether the debtor is current on contractually obligated interest and principal payments and the Corporation’s intent and ability to retain the security for a period of time sufficient to allow for any anticipated recovery in fair value and the likelihood of any near-term fair value recovery. If such decline is deemed to be uncollectible, the security is written down to a new cost basis and the resulting loss will be recognized as a securities provision for credit losses through an allowance for credit losses.

Our earnings and cash flows are largely dependent upon our net interest income. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets. In response to the economic conditions resulting from the COVID-19 pandemic, the Federal Reserve's target federal funds rate was reduced nearly to 0% and the yields on Treasury notes declined to historic lows. However, due to elevated levels of inflation and corresponding pressure to raise interest rates, the Federal Reserve announced in January of 2022 that it would be slowing the pace of its bond purchasing and increasing the target range for the federal funds rate over time. The Federal Reserve then increased the target range eleven times throughout 2022 to July 2023. In further reassessment of inflation and other factors, the Federal Reserve decreased the range three times in late 2024.2024, and a further three times during 2025. As of December 31, 2025, the target range for the federal funds rate had been decreased to 3.50% from 3.75%. Our interest rate spread, net interest margin and net interest income improved during this period as our interest-bearing liabilities repriced at a faster pace than interest-earning assets.

TheASU change2016-13 to(Topic 326 - Credit Losses), commonly referenced as CECL, became effective for the CECLCorporation frameworkon requiredJanuary us1, to2023. greatlyUnder increaseCECL, credit losses are measured based on past events, current conditions and reasonable and supportable forecasts of future conditions that affect the data we collect and review to determine the appropriate levelcollectability of thefinancial allowance for credit losses.assets. The CECL framework maycan result in greater volatility in the level of the allowance for credit losses, depending on various factors and assumptions applied in the model, such as the reasonable and supportable forecasted economic conditions and loan payment behaviors. Determination of the allowance is inherently subjective as it requires significant estimates and management’s judgment of credit risks and future trends, all of which may undergo material changes. Deterioration in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require an increase in the allowance for credit losses. In addition, bank regulatory agencies periodically review our allowance and may require an increase in the provision for credit losses or the recognition of additional loan charge-offs, based on judgments different from those of management. Also, if charge-offs in future periods exceed the allowance for credit losses, we will need additional provisions to increase the allowance. Any increases in provisions will result in a decrease in net income and capital and may have a material adverse effect on our financial condition and results of operations.

Our mortgage lendingbanking business may not provide us with significant non-interest income.

The residential mortgage business is highly competitive, and highly susceptible to changes in market interest rates, consumer confidence levels, employment statistics, availability of homes for sale, the capacity and willingness of secondary market purchasers to acquire and hold or securitize loans, and other factors beyond our control.

We generallymay sell the guaranteed portion of our SBA 7(a) program loans in the secondary market. These sales have resulted in premium income for us at the time of sale and created a stream of future servicing income.sale. We may not be able to continue originating these loans or selling them in the secondary market. Furthermore, even if we are able to continue originating and selling SBA 7(a) program loans in the secondary market, we might not continue to realize premiums upon the sale of the guaranteed portion of these loans. When we sell the guaranteed portion of our SBA 7(a) program loans, we incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on the non-guaranteed portion of a loan, we share any loss and recovery related to the loan pro-rata with the SBA. If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by us, the SBA may seek recovery of the principal loss related to the deficiency from us, which could adversely affect our business and earnings.

CRE loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulations. Commercial real estate markets were particularly impacted by the economic disruption resulting from the COVID-19 pandemic which was a catalyst for the evolution of various remote work options which may still have an impact on the long-term performance of some types of office properties within our commercial real estate portfolio. Accordingly, the federal banking regulatory agencies have expressed concerns about weaknesses in the current commercial real estate market. Failures in our risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which, accordingly, could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to our Wealth Management Business

The majority of the revenue from the wealth management business consists of investment advisory. Substantial revenues areis generated from investment advisory contracts with clients. Under these contracts, the investment advisory fees paid to us are typically based on the market value of assets under management. Assets under management may decline for various reasons including declines in the market value of the assets in the funds and accounts managed, which could be caused by price declines in the securities markets generally or by price declines in specific market segments. Assets under management may also decrease due to redemptions and other withdrawals by clients or termination of contracts. This could be in response to adverse market conditions or in pursuit of other investment opportunities. If our assets under management decline and there is a related decrease in fees, it will negatively affect our results of operations.

The wealth management business is subject to regulation by regulatory agencies that are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of customers participating in those markets. In the event of non-compliance with regulation, governmental regulators, including the SEC and the Financial Industry Regulatory Authority, may institute administrative or judicial proceedings that may result in censure, fines, civil money penalties, the issuance of cease-and-desist orders, the deregistration or suspension of the non-compliant introducing broker-dealer or investment adviser or other adverse consequences. The imposition of any such penalties or orders could have a material adverse effect on the wealth management segment's operating results and financial condition. The wealth management businesssegment also may be adversely affected as a result of new or revised legislation or regulations. Regulatory changes have imposed and may continue to impose additional costs, which could adversely impact our profitability.

We are subject to extensive regulation, supervision, and examination by our primary regulators, the Pennsylvania Department of Banking and Securities and federal regulators of the FDIC and Federalthe Reserve Bank of Philadelphia.FRB. Also, as a member of the FHLB, the Bank must comply with applicable regulations of the Federal Housing Finance AgencyFHFA and the FHLB. Regulation by these agencies is intended primarily for the protection of our depositors and the deposit insurance fund and not for the benefit of our shareholders. The Bank's activities are also regulated under consumer protection laws applicable to our lending, deposit, and other activities. A large claim against the Bank under these laws or an enforcement action by our regulators could have a material adverse effect on our financial condition and results of operations. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, comments on the classification of our assets, and determine the level of our allowance for credit losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financial institutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Changes in such regulation and oversight, whether in the form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgementsjudgments are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements. In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgementsjudgments inherent in that policy, is critical in understanding our financial statements. Management has presented the application of this policy to the audit committee of our board of directors.

Beginning on January 1, 2023, we adopted ASC 326, which replaced the former incurred loss methodology with an expected credit loss methodology that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of an asset. The ACL is a valuation reserve established and maintained by charges against operating income. It is an estimate of expected credit losses, measured over the contractual life of a loan, that considers historical loss experience, current conditions and forecasts of future economic conditions.

•Consolidated net income increased $3.1$5.5 million, or 23.4%.33.6%, to $21.8 million.

•Net interest income was up $2.1$16.7 million, or 3.0%23.5% due to higher levelsvolume of earning assets.

•Non-interest income increaseddecreased $9.4$2.2 million or 29.3%5.2% due largely to ana improveddecline mortgagein bankingMSR environment.sales and a decline in other non-interest income.

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

•Non-interest Expense, which consists primarily of salaries and employee benefits, occupancy, professional fees, advertising & promotion, data processing,processing information& technology,software, loan expenses, and other operating expenses; and

Interest income increased $19.5$10.3 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $185.4$164.9 million, combinedoffset withsomewhat by a higherlower yield on earning assets, which increaseddecreased 325 basis points. Average total loans held for investment increased $136.1$139.4 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $158.7$160.7 million on average, combined. Home equity loans and residential real estate loans held in portfolio increased $33.6$14.4 million on average, combined. Residential loans for sale increaseddecreased $11.6$5.0 million on average. The average yield on loans held for investment increaseddecreased 355 basis points andwhile the yield on cash and investments increased 469 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.

Interest expense increaseddecreased $17.4$6.4 million, year over year, due primarily to market interest rate rises,declines, aspartially welloffset asby an increase of $178.0$166.4 million in average interest bearing deposits. Interest expense on deposits increaseddecreased $16.2$5.9 million with the cost of interest-bearing deposits increasinghaving 56decreased 71 basis points to 4.37%.3.66%. Total cost of deposits increaseddecreased 5859 basis points reflecting aan decreaseincrease of $25.4$9.0 million in average non-interest bearing deposits. Interest expense on borrowings increaseddecreased $612$1.7 thousandmillion as the cost decreased 516 basis points, and total average short-term borrowings increasedbalances $13.9decreased $29.7 million.

Net interest margin decreasedincreased 1948 basis points to 3.64% for the year ended December 31, 2025 from 3.16% for the year ended December 31, 2024 from 3.35% for the year ended December 31, 2023,2024, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the decline in yield on earnings assets was outpaced by the increasedecline in costs of funds, impacted also by the $25.4$9.0 million decreaseincrease in average non-interest bearing deposits.

The provision for credit losses was $11.4$15.2 million for the year ended December 31, 2024,2025, compared to a $6.8$11.4 million provision for the year ended December 31, 2023,2024, an increase of $4.6$3.8 million. The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments. The increase in provision for funded loans of $4.4$3.4 million for the year ended December 31, 20242025 was primarilythe dueresult toof an increase in net charge-offs yearon overconstruction year.and Whilesmall netbusiness charge-offsloans and the resulting increase in specific reserves as nonperforming loans increased $10.3$9.9 millionmillion, largely small business loans. The increase in 2024provision overwas 2023,also nearlyimpacted halfby ofan upgrade to the loansthird-party charged-offmacroeconomic wereforecast specificallymodel reservedused forto inestimate priorcredit periods.losses Thison increasethe loan portfolio. The model upgrade was partiallybased offseton byre-assessing the impact of favorable changes in certain portfolio baseline loss rates and somecurrent macroeconomic factorsvariable underlyingrelationships to expected results. The overall impact to the fundedACL loss model. The provision for unfunded loan commitments decreased $226 thousand duringfrom the yearmodel dueupgrade, tobefore favorableapplying changesqualitative inadjustments, certainwas portfolionot baselineconsidered loss rates and some macroeconomic factors underlying the unfunded loss model.material.

While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate alsodecreased increased.related to the impact of solar tax credits purchased at the end of 2025. The effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, and excess tax benefits from recognized stock compensation. These tax benefits are offset by the tax effect of stock-based compensation expense related to incentive stock options and a provision for state income tax expense.

Our loan portfolio is the largest category of our interest-earning assets. As of December 31, 20242025 and 2023,2024, our total loans and leasesother finance receivables amounted to $2.1$2.2 billion, and $1.9$2.1 billion, respectively. Our loan portfolio is comprised of loans originated to be held in portfolio, as well as residential mortgage loans originated for sale. Meridian engages in the origination of residential mortgages, most typically for 1-4 family dwellings, with the intention of the Corporation to principally sell substantially all of these loans in the secondary market to qualified investors. Our loans held in portfolio are originated by our commercial and consumer loan divisions. We have a strong credit culture that promotes diversity of lending products with a focus on commercial businesses. We have no particular credit concentration. Our commercial loans have been proactively managed in an effort to achieve a balanced portfolio with no unusual exposure to one industry.

The following table presents our loanloans and leaseother finance receivables portfolio at the dates indicated:

The following table shows the amounts of loans and other finance receivables outstanding as of December 31, 20242025 which, based on remaining scheduled repayments of principal, are due in the periods indicated:

The amounts have been classified according to sensitivity to changes in interest rates for amounts due after one year, as of December 31, 2024.2025. Variance rate loans are those loans with floating or adjustable interest rates.

Commercial and Industrial Loans (C & I) and Other Finance Receivables

We provide a variety of variable and fixed rate commercial business loans and lines of credit. These loans andloans, lines of credit and other financing facilities. These credit facilities are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses. Additionally, we lend to companies in the technology, healthcare, real estate and financial service industries. Commercial business loans generally include lines of credit and term loans with a maturity of five years or less. Other finance receivables include advances to merchants for short-term cash flow needs. The primary source of repayment for commercial business loanscredit is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees. Our C & I loans increased $64.5$61.6 million, or 21.3%,16.8%, to $429.0 million at December 31, 2025 from $367.4 million at December 31, 2024 from $302.9 million at December 31, 2023.2024. C & I loans overall represented 17.8%19.5% and 15.8%17.8% of our total loan portfolio at December 31, 20242025 and 2023,2024, respectively.

Our 10 largest C & I relationships represented 13%11% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2024.2025. The average loan size outstanding in C & I portfolio, excluding leases, was $413$403 thousand at December 31, 20242025 and the weighted average risk rating of the C & I portfolio is 4.1 (pass),pass, based on our credit rating scale of 1 through 9, where ratings 1 through 5 are considered pass.

We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs. Our small business loans increaseddecreased by $13.4$16.0 million, or 9.4%,10.3%, to $139.8 million at December 31, 2025 from $155.8 million at December 31, 20242024, fromdue $142.3to millionan atincrease Decemberin 31,sale 2023.of such loans during 2025. During 20242025 we sold $59.4$97.8 million in SBA loans, aan decreaseincrease of $25.6$38.3 million, or 30.1%,64.4%, from $85.0$59.4 million in SBA loans sold in 2023.2024. The small business loans portfolio represented 7.6%6.3% and 7.4%7.6% of our total loan portfolio at December 31, 20242025 and 2023,2024, respectively.

As of December 31, 20242025 our available-for-sale investment portfolio had a fair value of $174.3$193.5 million, with an effective tax equivalent yield of 3.72%3.84% and an estimated duration of approximately 3.83.7 years. The largest category of this investment portfolio, or 38.1%,45.7%, consists of U.S. agency securities, along with 21.1%20.7% in municipal securities, and 8.9%8.4% in U.S. Treasury securities. The remainder of our available-for-sale securities portfolio is invested in other securities. We regularly evaluate the composition of our investment portfolio as the interest rate yield curve changes and may sell investment securities from time to time to adjust our exposure to interest rates or to provide liquidity to meet loan demand. Not included in the tables below are equity investments that had fair values of $2.2 million and $2.1 millionmillion, as of December 31, 20242025 and 2023.2024, respectively. As of December 31, 20242025 we also had a held-to-maturity investment portfolio with amortized cost of $33.8$32.5 million.

The ratio of non-performing assetsloans to total assetsloans increased to 1.90%2.50% as of December 31, 2024,2025, from 1.58%2.19% as of December 31, 2023. There was $159 thousand in other real estate property included in non-performing assets as of December 31, 2024 and 2023 related to a well secured residential property.2024. Total non-performing loans were $45.1$55.1 million and $33.8$45.1 million as of December 31, 20242025 and December 31, 2023,2024, respectively. The increase in non-performing loans over the period was due to increases in non-performing constructionsmall business loans, residential real estatemortgage loans, and smallcommercial businessmortgage loans of $6.0$12.5 million, $3.4$2.5 million, $2.8and $1.7 million, respectively, partially offset by a decrease of $3.4$5.2 million in non-performing commercial loans due to a $3.5 million partialthe charge-off of a few commercial loanloans. relationship.Included in non-performing small business loans as of December 31, 2025 and December 31, 2024, are $13.2 million and $6.5 million in SBA guarantees, respectively. Non-performing loans, net of the SBA guaranteed portion, as a percent of total loans were 1.90% and 1.87% as of December 31, 2025, and 2024, respectively.

Meridian realized net charge-offs of $11.9 million, or 0.55%, of total average loans for the year ended December 31, 2025, compared to net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024, compared to net charge-offs of $5.6 million, or 0.30%, of total average loans for the year ended December 31, 2023.2024. A majority of net charge-offs for the year ended December 31, 20242025 were from equipmentsmall leases,business $5.9loans of $5.0 million, commercial loans,loans $4.8of $2.4 million, finance receivables of $2.2 million, and smallequipment businessleases loans,of $4.3$1.5 million. The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.00% as of December 31, 2025 compared to 0.91% as of December 31, 2024 compared to 1.17% as of December 31, 2023.2024. The declineincrease in this coverage ratio was largely impacteddriven by netseveral charge-offsfactors ofincluding: individuallyreserving evaluatedfor the year over year increase in non-performing loans of $4.8 million and $4.2an millionincrease in the commercialbaseline andloss industrialrates loan,used andin smallthe businessACL loancalculation portfolios,for respectively,portfolios that drove the increase in non-performing loans, combined with thean declineincrease in ACLqualitative onreserve leasesfactors as we continue to refocus away from lease originations.year-over-year.

As of December 31, 20242025 there were specific reserves of $2.7$3.4 million against individually evaluated loans, aan decreaseincrease from $6.5$2.7 million as of December 31, 2023.2024. The drivers of the decreaseincrease related to a $2.9$1.2 million decrease in a commercial loan relationship specific reserve due to the charge-off note above, combined with a decline of $1 millionincrease in SBA loan specific reserves.reserves, partially offset with a $524 thousand decline in specific reserves on commercial loans.

Total deposits were $2.0$2.2 billion as of December 31, 2024,2025, up $181.9$152.8 million, or 10.0%,7.6%, from December 31, 2023.2024. Non-interest bearing deposits increased $1.6$4.5 million, or 0.7%,1.9%, from December 31, 2023.2024. Interest-bearing demand deposits decreasedincreased $9.5$15.9 million, or 6.3%,11.3%, from December 31, 2023,2024, while money market accounts/ and savings accountsdeposits increased $165.7$109.8 million, or 22.2%,12.0%, during the period. Business accounts comprised 50%52% of all deposits, consumer accounts and municipal deposits comprised 13%14% and 12%, respectively, and wholesale funding was approximately 25%.22%. Wholesale funding supports loan growth as business accounts from lending relationships tend to lag and wholesale funding can easily be managed through term.

Consolidated stockholders’ equity of the Corporation was $199.7 million, or 7.8% of total assets as of December 31, 2025 as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024 as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023.2024. The increase in stockholders’ equity is the result of year-to-date net income for the year ended December 31, 2025 of $16.3$21.8 million, andnet proceeds from the sale of common stock of $7.5 million, comprehensive income of $1.3 million, partially offset by dividends paid of $5.6$2.9 million, and $456$596 thousand in stock-based compensation and stock options exercised.exercised, partially offset by dividends paid of $5.7 million, and an increase of $425 thousand in ESOP leverage.

The tables below provides the non-GAAP reconciliation for the Corporation’s pre-tax, pre-provision income.net revenue.

The following is a reconciliation of the allowance for credit losses to total loans heldand forother investmentfinance receivables ratio at December 31, 2024.2025. 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.

In addition, Meridian maintains borrowing arrangements with various correspondent banks, the FHLB and the FRB to meet short-term liquidity needs. Through its relationship at the FRB, Meridian had available credit of approximately $5.4$4.2 million at December 31, 2024.2025. At December 31, 2024,2025, Meridian had $0 in borrowings from the Federal Reserve. As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral. As of December 31, 2024,2025, Meridian’s maximum borrowing capacity with the FHLB was $699.3$751.5 million. At December 31, 2024,2025, Meridian had borrowed $119.5$115.8 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $183.5$178.6 million against its available credit lines. At December 31, 2024,2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $242.5$306.8 million of available short or long term funding through the CDARS program and $334.6 million of available short or long term funding through brokered CD arrangements. Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.

The following items highlight the Corporation’s changes in its financial condition as of MarchJune 31,30, 2026 compared to December 31, 2025 and the results of operations for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025. More detailed information related to these highlights can be found in the sections that follow.

Changes in Financial Condition - MarchJune 31,30, 2026 Compared to December 31, 2025

•Total assets increased $14.6$31.2 million, or 0.6%,1.2%, to $2.6 billion as of MarchJune 31,30, 2026.

•Portfolio loans increased $11.1$7.9 million, or 0.5%,0.4%, to $2.2 billion as of MarchJune 31,30, 2026.

•Mortgage loans held for sale increased $5.2$21.1 million, or 15.4%,62.6%, to $39.0$54.9 million as of MarchJune 31,30, 2026.

•Total deposits increased $11.8$36.3 million or 0.5%1.7% to $2.2 billion as of MarchJune 31,30, 2026.

•The Corporation earned net income of $2.0$7.8 million during the threesix months ended MarchJune 31,30, 2026 and returned $1.7$3.3 million of capital to Meridian shareholders during thethis three months ended March 31, 2026period through a $0.14 dividend per share in each of the first quartertwo quarters of the year.

Three Month Results of Operations - MarchJune 31,30, 2026 Compared to MarchJune 31,30, 2025

•Net income was $2.0$5.8 million, or $0.17$0.48 per diluted share, downup $393$215 thousand, or 16.4%,3.8%, driven by higher net interest income and a higherlower level of provision for credit losses, partially offset by lower non-interest income, and higher non-interest expense, offset somewhat by improved net interest income.expense.

•The return on average assets and return on average equity were 0.32%0.90% and 4.02%,11.42%, respectively, for the firstsecond quarter 2026, compared to 0.40%0.90% and 5.57%,12.68%, respectively, for the firstsecond quarter 2025.

•Non-interest income decreased $287$1.4 thousand,million, or 3.9%,12.4%, to $7.0$9.9 million driven by a $598$1.4 thousandmillion decline in SBA loan income, and a $467 thousand decrease of $685 thousand in fair value adjustments related to the mortgagenet bankinggain segment.on sale of MSR's. These declines in non-interest income were partially offset by a $1.1$333 millionthousand increase in mortgage banking income.

•Non-interest expense increased $1.4$870 million,thousand, or 7.5%,4.1%, to $20.2$22.2 million due to alargely $1.0 million increase in salaries and employee benefits, andto an increase of $494$312 thousand in data processing and software expense, a $135 thousand increase in occupancy and equipment expense, combined with a $392 thousand increase in other non-interest expense.

Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three and six months ended MarchJune 31,30, 2026 and 2025, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.

The total provision for credit losses increaseddecreased $2.3$835 millionthousand on a net basis for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The provision on funded loans increaseddecreased $2.2$840 millionthousand over the three month comparable period in 2025 driven largely by ana increasedecrease of $3.9$940 millionthousand in commercial mortgage charge-offs fromover this period, combined with a lower level of loan participated to us by another financial institution that became non-performinggrowth as of March 31, 2026.well. There was a $55$175 thousand provision on unfunded loan commitments for the three months ended MarchJune 31,30, 2026, while for the three months MarchJune 31,30, 2025 there was noa $170 thousand provision on unfunded loan commitments.

Mortgage banking income increased $1.1$333 millionthousand over the comparable quarterly periodperiod, despite a 29 basis point decrease in the sales margin, as the volume of loans sold increased by $18.4$35.9 million, withor a17%. 28Partially basis point increase in the sales margin. Despiteoffsetting this 33.5%5.8% increase in mortgage banking income, total non-interest income decreased $287$1.4 thousandmillion largely due to negative fair value adjustments, a decrease in SBA loan income, and ana increasedecrease in the net lossgain recorded on the sale of MSRs.

SBA loan income also decreased $598$1.4 thousandmillion over this period due to a decline in the volume of SBA loans sold. The valuevolume of SBA loans sold for the quarter-ended MarchJune 31,30, 2026 was $5.4$27.6 million, or 44.8%,million lower than the sale of such loans for the quarter-ended MarchJune 31,30, 2025, while the gross margin on salesales was 8.5%7.9% for the quarter-ended MarchJune 31,30, 20262026, comparedan toimprovement 8.7%from 6.2% for the quarter-ended MarchJune 31,30, 2025. There was also a net gain on sale of MSRs for the quarter-ended June 30, 2025, downwith slightly.no comparable sale taking place for the quarter-ended June 30, 2026.

Total non-interest expense increased $1.4$2.3 million, or 7.5%,5.7%, primarilylargely asattributable theto result of an increaseincreases in salaries and employee benefitsbenefits, andprofessional fees, data processing and software expense,expenses, partiallyas offsetwell byas aother decline in occupancy and equipmentnon-interest expense. Salaries and employee benefits increased $1.0 million due largely to overall employee merit, benefit, and tax related increases for existing employees, as well as an increase of sixnearly 14 full-time equivalent employees, combined with an increase in mortgage segment related commissions and other benefits. DataThe processing$211 andthousand softwareincrease expensesin increasedprofessional $494fees thousand,was reflecting greater customer transaction activity and Meridian's ongoing commitmentdue to technology investments. Professional fees increased $211 thousand, largelyexpenses related to loannon-performing workloans. outOther expenses.expense Meanwhile,increased there was a decline of $155$354 thousand in occupancy and equipment expense largelymainly due to aan increase in OREO expenses and non-salary employee expenses in the current year-to-date period, compared to the prior year early termination of office lease space.period.

Income tax expense for the three and six months ended MarchJune 31,30, 2026 was $582$1.7 thousand,million and $2.3 million, respectively, as compared to $746$1.7 thousandmillion and $2.4 million for the same periodperiods in 2025. Our effective tax raterates waswere 22.5%22.4% and 22.4% for the three and six months ended MarchJune 31,30, 2026, compared to 23.7%23.3% and 23.4% for the same periodperiods in 2025. WhileThe incomereduction in the three and six months tax expenserates decreasedin comparing 2025 to 2026 is primarily due to the decreaseresult inof incomeincreased beforestock income taxes, the effectivecompensation tax rate decreased slightly due to the impact of tax expensebenefits recognized in the2026 prior-quarteras relatedwell toas thehigher surrenderincome offrom certain bank owned life insuranceBOLI policies.

As of MarchJune 31,30, 2026, total assets were $2.6 billion which increased $14.6$31.2 million, or 0.6%,1.2%, from December 31, 2025. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:

Total loans and other finance receivables increased $11.1$7.9 million, to $2.2 billion as of MarchJune 31,30, 2026, from $2.2 billion as of December 31, 2025. Overall portfolio loan growth was 0.5%0.4% since December 31, 2025, or 2.0%1% on an annualized basis for 2026. ConstructionLeading the increase were commercial real estate loans which increased $12.8$32.3 million, or 3.9%,3.7%, andwhile commercial and industrial loans increased $15.4$16.6 million, or 3.6%.3.9%. WhilePartially commercialoffsetting realthe estateportfolio increases were construction loans which decreased $8.9$15.0 million, or 1.0%, and4.5%, SBA loans decreased $5.3$15.2 million, or 3.8%10.9% due to loan sales described above.above, and leases which decreased $10.3 million, or 22.7%.

As of MarchJune 31,30, 2026, included within the commercial real estate loans total of $870.5$911.7 million was $290.3$286 million of owner-occupied commercial loans, as well as $104.2$102.0 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

Total deposits increased $11.8$36.3 million, or 0.5%,1.7%, since December 31, 2025. Total interest-bearing deposits increased $13.8$35.3 million during the period, whereasand noninterest-bearing deposits decreasedincreased $1.9$1.0 million. Time deposits increased $23.7$31.7 million, or 3.2%,4.3%, largely due to customer preference for the higher interest rates offered by these products.

The majority of Meridian's deposit base is comprised of business deposits, 51%,50%, with consumer deposits amounting to 15% at MarchJune 31,30, 2026. Municipal deposits at 11%12% and brokered deposits at 23% provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At MarchJune 31,30, 2026, 64%65% of business accounts and 89%87% of consumer accounts were fully insured by the FDIC. The municipal deposits are 100% collateralized and brokered deposits are 100% FDIC insured. The level of uninsured deposits for the entire deposit base was 20% at MarchJune 31,30, 2026.

Consolidated stockholders’ equity of the Corporation was $200.2$204.8 million, or 7.8%7.9% of total assets as of MarchJune 31,30, 2026, as compared to $199.7 million, or 7.8% of total assets as of December 31, 2025. On AprilJuly 23,30, 2026, the Board of Directors declared a quarterly cash dividend of $0.14 per common share payable MayAugust 11,17, 2026 to shareholders of record as of MayAugust 4,10, 2026.