What changed in this filing

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Item 1. Business

2026-03-13 compared with 2025-03-17 · 94 added, 74 removed, 315 unchanged (35% of the section changed)

The Corporation is a bank holding company engaged in banking activities through its wholly-owned subsidiary, Meridian Bank (the “Bank”), a full-service, state-chartered commercial bank with offices in the Delaware Valley tri-state market, which includes Pennsylvania, New Jersey and Delaware, as well as in the Central Maryland market, and Florida.

We have a financial services business model with non-interest revenue streams from mortgage lending, SBA lending and wealth management services.

We have a financial services business model with non-interest revenue streams from mortgage banking, the sale of SBA loan guarantees and wealth management services.

We provide services to small and middle market businesses, professionals and retail customers throughout our market area.

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Our commercial and industrial lending department supports our small business and middle market borrowers with a comprehensive selection of loan products including financing solutions for wholesalers, manufacturers, distributors, service providers, importers and exporters, among others.

Our portfolio includes business lines of credit, term loans, SBA lending, lease financing, other financings, and SNCs.

Our portfolio includes business lines of credit, term loans, small business lending and financing, and lease financing.

We have no particular credit concentration.

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Wealth Management and Advisory Services

The second line of business is wealth management and advisory services.

Meridian 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.

Such clients include professionals, higher net worth individuals, companies seeking to provide benefits plans for their employees, and more.

Such clients include professionals, higher net worth individuals, companies seeking to provide benefits plans for their employees, business and consumer customers of the bank, and more.

Acquiring and sustaining wealth is a gradual progression, one that requires a considerable amount of thought and planning.

Our process takes a comprehensive approach to financial planning and encompasses all aspects of retirement, with an emphasis on sustainability.

Our process takes a comprehensive approach to financial planning and encompasses all aspects of retirement, with an emphasis on

sustainability.

Meridian Wealth offers a significant enhancement to both our capacity and the variety of tools we can use to help bring effective financial planning and wealth management services to a broad segment of customers.

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Our mortgage consultants guide our clients through the complex process of obtaining a loan to meet consumer needs.

Originations consist of consumer for-sale mortgage loans, loans to be held within our portfolio, and wholesale mortgage loans.

Originations consist of consumer for-sale mortgage loans, loans to be held within our portfolio, and wholesale mortgage loans and home equity loans.

Clients include homeowners and smaller scale investors.

The mortgage segment operates and originates mortgage loans in the Delaware Valley tri-state market, and Maryland markets, most typically for 1-4 family dwellings, with the intention of selling substantially all of these loans in the secondary market to qualified investors, while often retaining the servicing rights on these loans.

The mortgage segment operates and originates loans in the Delaware Valley tri-state market, Maryland markets and south Florida markets, most typically for 1-4 family dwellings, with the intention of selling substantially all of these loans in the secondary market to qualified investors, while often retaining the servicing rights on these loans.

Mortgages are originated through sales and marketing initiatives, as well as realtor, builder, bank, advertising and customer referral resources.

The mortgage division performs origination, processing, underwriting, closing and post-closing functions both from our Blue Bell mortgage headquarters with 5 other loan production offices in the Delaware Valley tri-state market, and from Maryland through our footprint of 3 other production/processing offices in the state.

Meridian is headquartered in Malvern, PA, and has an operations center in Exton, PA, and six full-service branches in Philadelphia and surrounding counties.

The mortgage division performs origination, processing, underwriting, closing and post-closing functions both from our East Norriton mortgage headquarters with 5 other loan production offices in the Delaware Valley tri-state market and also in Florida, and from Maryland through our footprint of 2 other production/processing offices in the state.

Meridian is headquartered in Malvern, PA, has an operations center in Exton, PA, and seven full-service branches in Philadelphia and surrounding counties.

Its main branch, in Wayne, serves the Main Line.

The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively.

Our sixth branch is in Philadelphia.

The West Chester and Media branches serve Chester and Delaware counties, respectively, while the Doylestown and Blue Bell branches serve Bucks and Montgomery counties, respectively, and our sixth branch is in Center City Philadelphia.

In 2025 we opened up our seventh branch in the southwest Florida town of Bonita Springs.

These branches provide “Relationship Hubs” for our regional lending groups and allow Meridian to serve markets at or near the county seat of counties in and surrounding Philadelphia.

In addition to our deposit taking branches, there are currently 10 other locations, including Corporate headquarters, that serve as loan production offices.

These offices extend from the Delaware Valley/Philadelphia market area to Delaware, Central Maryland, and Florida.

These offices extend from the Delaware Valley/Philadelphia market area to Delaware, Central Maryland, and southwest Florida.

Demographic information for the five county Philadelphia metropolitan area (Philadelphia County, Chester County, Delaware County, Montgomery County, Bucks County) shows our primary market to be stable, with moderate population growth.

According to the U.S.

Census Bureau – 2020, the median household income in this area is $88,336 compared to the national average of $62,843, while the total population in this market was 4,198,000.

Census Bureau – 2024, the median household income in this area is $101 thousand compared to the national average of $82 thousand, while the total population in this market was 4,218,131.

Demographic information for the five county Baltimore metropolitan area (Baltimore County, Howard County, Montgomery County, Anne Arundel County, Prince George’s County) also shows that this secondary market is stable.

According to the U.S.

Census Bureau – 2020, the median household income in the Baltimore metropolitan area is $105,582 compared to the national average of $62,843, while the total population in this market was 3,774,350.

The Delaware and Florida markets were serve are also stable with moderate population growth.

Census Bureau – 2024, the median household income in the Baltimore metropolitan area is $116 thousand compared to the national average of $82 thousand, while the total population in this market was 4,183,315.

The Delaware and Florida markets we serve are also stable with moderate population growth.

(dollars in thousands / population actual) United States Pennsylvania Maryland

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None of these employees are covered by collective bargaining agreements, and Meridian believes it enjoys good relations with its personnel.

The Bank was named to American Bankers 2022 Top 200 Community Banks as well as being listed by the Philadelphia Inquirer in their '’Top Work Places of 2022.” In December of 2020, the Bank was named by the ICBA as one of their ‘Best Community Banks to Work For’.

As an integrated full-service financial institution, approximately 62% of our employees are employed through our banking segment, 34% through our mortgage segment, and 4% for our wealth segment.

Meridian is committed to giving back to our communities.

In 2024, we donated $546 thousand to over 100 organizations throughout the various communities that we serve in Pennsylvania, New Jersey, Delaware, Maryland, and Florida.

Meridian also sponsors individual / group service days and provides time off to employees to participate in charitable activities in the communities we serve.

The Bank is listed by the Philadelphia Inquirer in their “Top Work Places of 2025”, and was named to American Bankers 2023 Top 200 Community Banks.

Meridian has also been listed by the Baltimore Sun and the News Journal in their respective “Top Workplace in the Region 2025”.

Since inception, Meridian has been committed to giving back to worthy organizations and institutions throughout the communities that we serve and live in.

In 2025, we donated $727 thousand in total to over 100 such organizations and institutions throughout the communities that we serve in Pennsylvania, New Jersey, Delaware, Maryland, and Florida.

Meridian also sponsors individual / group service days and provides time off to employees to participate in charitable activities.

Meridian encourages employees to serve on boards of community organizations.

In order to compete effectively and continue to provide excellent service to our clients, we must attract, retain, and motivate qualified professionals.

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Regulatory Capital Requirements

The Federal Reserve monitors the capital adequacy of the holding company on a consolidated basis, and the FDIC and the PDBS monitor the capital adequacy of the Bank.

The banking regulators use a combination of risk-based guidelines and a leverage ratio to evaluate capital adequacy.

The risk-based capital guidelines applicable to us are based on capital framework, known as Basel III, as implemented by the federal banking regulators.

The risk-based guidelines are intended to make regulatory capital requirements sensitive to differences in credit and market risk profiles among banks and bank holding companies, to account for off-balance sheet exposure and to minimize disincentives for holding liquid assets.

Under the Basel III Capital Rules, the minimum capital ratios are (i) 4.5% CET1 to risk-weighted assets, (ii) 6% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets, (iii) 8% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets and (iv) 4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).

The current Capital Rules also include a capital conservation buffer designed to absorb losses during periods of economic stress.

The capital conservation buffer is composed entirely of CET1, on top of these minimum risk-weighted asset ratios.

The Capital Rules require us to maintain an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) 7% CET1 to risk-weighted assets, (ii) 8.5% Tier 1 capital to risk-weighted assets, (iii) 10.5% total capital to risk-weighted assets and (iv) a minimum leverage ratio of 4%.

The Capital Rules provide for a number of deductions from and adjustments to CET1.

These include, for example, the requirement that mortgage servicing rights, certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1.

In addition, the Capital Rules provide for a countercyclical capital buffer applicable only to certain covered institutions.

We do not expect the countercyclical capital buffer to be applicable to us.

Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

In addition, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.

Under the Capital Rules, the effects of certain accumulated other comprehensive income items are not excluded;

however, non-advanced approaches banking organizations, including the Bank, were able to make a one-time permanent election to continue to exclude these items.

The Bank made this election.

The Capital Rules prescribe a new standardized approach for risk weightings that expanded the risk-weighting categories from the current four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0%, for U.S.

government and agency securities, to 600%, for certain equity exposures, and resulting in higher risk weights for a variety of asset categories.

Community banks have long raised concerns with bank regulators about the regulatory burden, complexity, and costs associated with certain provisions of the Basel III Rule.

In response, Congress provided an “off-ramp” for institutions, like us, with total consolidated assets of less than $10 billion.

Section 201 of the Regulatory Relief Act instructed the federal banking regulators to establish a single CBLR of between 8 and 10%.

Under the final rule, a community banking organization is eligible to elect the new framework if it has:

less than $10 billion in total consolidated assets, limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9%.

During the first quarter of 2020, the Bank adopted the community bank leverage ratio framework as its primary regulatory capital ratio.

The Corporation and the Bank remain subject to regulatory capital standards administered by the Federal Reserve, the FDIC, and the Pennsylvania Department of Banking and Securities, each of which monitors capital adequacy through a combination of risk‑based measures and leverage requirements.

Basel III / U.S.

Capital Framework

banking organizations continue to operate under the Basel III regulatory capital regime;

however, the framework is undergoing significant revision due to the federal banking agencies’ ongoing “Basel III Endgame” reform process.

In July 2025, U.S.

regulators reaffirmed plans to implement a revised capital rule that would materially change how credit, market, and operational risks are measured, including reducing reliance on internal models and adopting enhanced standardized approaches.

These reforms—initially proposed in 2023—have since been reevaluated after substantial industry feedback, with regulators signaling a more “industry‑friendly” and less punitive capital framework expected to be re‑proposed in early 2026.

In August 2025, the Federal Reserve publicly confirmed it is abandoning the prior, more stringent 2023 Basel III Endgame proposal in favor of a new, simplified capital framework designed to reduce unnecessary regulatory burden while maintaining safety and soundness.

Although final requirements are still forthcoming, these developments reflect active regulatory recalibration that may affect future risk‑based capital ratios, buffer requirements, and the treatment of certain asset classes.

Until the revised capital rule becomes effective, minimum Basel III regulatory capital requirements applicable to the Corporation and the Bank remain in place, including:

(i) 4.5% CET1 to risk-weighted assets, (ii) 6% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets, (iii) 8% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets and (iv) 4% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).

Institutions must also maintain a 2.5% capital conservation buffer, resulting in effective minimum ratios of 7% CET1, 8.5% Tier 1, and 10.5% Total capital.

Mortgage servicing assets, deferred tax assets, and certain other exposures remain subject to CET1 deduction thresholds.

These requirements will remain applicable until superseded by the forthcoming Basel III Endgame revisions.

Community Bank Leverage Ratio (CBLR)

The Bank elected the CBLR framework in 2020.

Historically, the CBLR required a leverage ratio greater than 9% for qualifying institutions.

In late 2025, however, the federal banking agencies issued coordinated proposals to meaningfully revise the framework.

On November 25, 2025, the OCC, Federal Reserve, and FDIC jointly proposed lowering the CBLR threshold from greater than 9% to greater than 8%, as authorized by federal statute.

The proposed rule would also extend the “grace period” for qualifying institutions that temporarily fall below the required CBLR from two quarters to four quarters, provided the leverage ratio remains above 7%.

A parallel Federal Register notice published on December 1, 2025, confirms the same proposed reduction and expanded grace‑period structure.

Federal Reserve statements issued the same week similarly support reducing the requirement to 8% while preserving a capital level consistent with safe and sound banking.

Additional industry commentary indicates that lowering the CBLR threshold is intended to broaden eligibility, reduce regulatory burden, and increase lending capacity for community banks.

As of December 31, 2025, these CBLR revisions remain proposed but not yet final.

With respect to the Bank, the Capital Rules also revised the prompt corrective action regulations pursuant to Section 38 of the FDIA.

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Prompt Corrective Action Framework

The FDIA, requires among other things, that the federal banking agencies take “prompt corrective action” with respect to banks that do not meet minimum capital requirements.

The FDIA sets forth the following five capital tiers for purposes of implementing the PCA regulations:

“well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.”

The FDIC’s Prompt Corrective Action framework, used to classify institutions based on capital levels, remains unchanged.

Basel III Endgame discussions have not modified PCA thresholds, and institutions must continue to maintain capital ratios that satisfy the “well‑capitalized” standards to avoid restrictions.

Liquidity Regulations

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Safety and Soundness Standards

The FDIA requires the federal banking agencies to prescribe standards, by regulations or guidelines, relating to internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, asset quality, earnings, stock valuation and compensation, fees and benefits, and such other operational and managerial standards as the

agencies deem appropriate.

The federal banking agencies have adopted the Interagency Guidelines for Establishing Standards for Safety and Soundness.

The guidelines establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and benefits.

In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines.

In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the

risk and exposures specified in the guidelines.

These guidelines also prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder.

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As a result of the new rule, the FDIC insurance costs of insured depository institutions, including Meridian Bank, would generally increase.

In November, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closure of Silicon Valley Bank and Signature Bank, at a quarterly rate of 3.36 basis points of an institution’s uninsured deposits in excess of $5 billion as of December 31, 2022, to be paid over eight quarterly assessment periods beginning in the first quarter of 2024.

Under the final rule, the estimated loss pursuant to the systemic risk determination will be periodically adjusted and the FDIC has retained the ability to cease collection early, extend the special assessment collection period and impose a final shortfall assessment on a one time basis.

Since the Bank’s uninsured deposits were less than $5 billion as of December 31, 2022, the final rule doesn’t apply to the Bank, but the extent to which any similar future assessments will impact our future deposit insurance expense is currently uncertain.

Under the FDIA, the FDIC may terminate deposit insurance upon a finding that an institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

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Assessment rates may be adjusted quarterly to reflect changes in the assessment base.

FICO assessments are expected to end after the bonds mature in 2027, as of December 31, 2025, they are still in effect.

Depositor Preference

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(ii) federal and state deposit concentration limits;

and (iii) any state law limitations requiring the merging bank to have been in existence for a minimum

period of time (not to exceed five years) prior to the merger.

and (iii) any state law limitations requiring the merging bank to have been in existence for a minimum period of time (not to exceed five years) prior to the merger.

The establishment of new interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) has historically been permitted only in those states the laws of which expressly authorize such expansion.

However, the Dodd-Frank Act permits well-capitalized and well-managed banks to establish new branches across state lines without these impediments.

However, the Dodd-Frank Act permits well-capitalized and well-managed banks to establish new branches across state lines without these impediments, unless expressly prohibited.

Consumer Financial Protection

The Bank is subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.

These laws include the ECOA, the Fair Credit Reporting Act, the TILA, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, Fair Credit Reporting Act, the Service Members Civil Relief Act, the Right to Financial Privacy Act, Telephone Consumer Protection Act, CAN-SPAM Act, and these laws’ respective state-law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices.

Telephone Consumer Protection Act, CAN-SPAM Act, and these laws’ respective state-law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices.

These and other federal laws, among other things, require disclosures of the cost of credit and terms of deposit accounts, provide substantive consumer rights, prohibit discrimination in credit transactions, regulate the use of credit report information, provide financial privacy protections, restrict our ability to raise interest rates on extensions of credit and subject us to substantial regulatory oversight.

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The proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered by the Federal Reserve from large debit card issuers.

As of December 31, 2025 the proposal had not yet been adopted.

Federal Home Loan Bank Membership

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As required by the Dodd-Frank Act, the CFPB issued a series of final rules in January 2013 amending Regulation Z, implementing TILA, which requires mortgage lenders to make a reasonable and good faith determination, based on verified and documented information, that a consumer applying for a residential mortgage loan has a reasonable ability to repay the loan according to its terms.

These final rules prohibit creditors, such as the Bank, from extending residential mortgage loans without regard for the consumer’s ability to repay

and add restrictions and requirements to residential mortgage origination and servicing practices.

These final rules prohibit creditors, such as the Bank, from extending residential mortgage loans without regard for the consumer’s ability to repay and add restrictions and requirements to residential mortgage origination and servicing practices.

In addition, these rules restrict the imposition of prepayment penalties and restrict compensation practices relating to residential mortgage loan origination.

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In general, a qualified mortgage is a residential mortgage loan that does not have certain high risk features, such as negative amortization, interest-only payments, balloon payments, or a term exceeding 30 years.

In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount and the borrower’s total debt-to-income ratio must be no higher than 43% (subject to certain limited exceptions for loans eligible for purchase, guarantee or insurance by a government sponsored enterprise or a federal agency).

In addition, to be a qualified mortgage, the points and fees paid by a consumer cannot exceed 3% of the total loan amount, and the loan must meet certain underwriting requirements.

For most loans, the borrower’s total debt-to-income ratio is no longer subject to a strict 43% cap:

instead, a loan qualified as a General QM if its annual percentage rate does not exceed the average prime offer rate for a comparable transaction by more than 2.25 percentage points (with

higher thresholds for smaller loans).

Lenders must still consider and verify income, assets, debt, and DTI as part of the underwriting process.

Commercial Real Estate Guidance

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Institutions with overall credit risk management processes that reflect consideration of the principles of the 2006 CRE Guidance are better positioned to manage through adverse economic environments.

The principles in the 2006 CRE Guidance remain relevant, particularly in challenging economic environments, and particularly for institutions engaged in significant CRE lending strategies to help them remain healthy and profitable while continuing to serve the credit needs of the community.

As of December 31, 2025, the principles in the 2006 CRE Guidance remain relevant, particularly in challenging economic environments, and particularly for institutions engaged in significant CRE lending strategies to help them remain healthy and profitable while continuing to serve the credit needs of the community.

Leveraged Lending Guidance

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Our bank’s failure to comply with the CRA could, among other things, result in the denial or delay in certain corporate applications filed by us, including applications for branch openings or relocations and applications to acquire, merge or consolidate with another banking institution or holding company.

In May 2022, the Federal Reserve, the FDIC and the OCC issued a joint proposal that would, among other things (i) expand access to credit, investment and basic banking services in low - and moderate-income communities, (ii) adapt to changes in the banking industry, including internet and mobile banking, (iii) provide greater clarity, consistency and transparency in the application of the regulations and (iv) tailor performance standards to account for differences in bank size, business model, and local conditions.

The Bank will continue to evaluate the impact of any changes to the regulations implementing the CRA and their impact to the Bank’s financial condition, results of operations, and/or liquidity, which cannot be predicted at this time.

In October 2023, the Federal Reserve, FDIC, and OCC issued a final rule modernizing CRA regulations.

The new rule expands access to credit, investment, and basic banking services in low- and moderate-income communities, adapts to changes in the banking industry (including internet and mobile banking), provides greater clarity, consistency, and transparency in the application of the regulations, and tailors performance standards to account for differences in bank size, business model, and local conditions.

Our bank received a rating of “Satisfactory” in its most recently completed CRA examination in 2023 that was as of November 19, 2022.

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These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

In October 2023, the CFPB proposed a new rule that would require a provider of payment accounts or products, such as a bank, to make data available to consumers upon request regarding the products or services they obtain from the provider.

Any such data provider would also have to make such data available to third parties, with the consumer's express authorization and through an interface that satisfies formatting, performance and security standards, for the purpose of such third parties providing the consumer with financial products or services requested by the consumer.

Data that would be required to be made available under the rule would include transaction information, account balance, account and routing numbers, terms and conditions, upcoming bill information, and certain account verification data.

The proposed rule is intended to give consumers control over their financial data, including with whom it is shared, and encourage competition in the provision of consumer financial products or services.

For banks with less than $50 billion in total assets, compliance would be required approximately 2.5 years after adoption of the final rule.

In October 2024, the CFPB finalized its Personal Financial Data Rights Rule, which was intended to require banks and other providers of payment accounts or products to give consumers access to their financial data and, with the consumer’s express authorization, make that data available to third parties through secure, standardized interfaces.

The final rule covered information such as transaction histories, account balances, account and routing numbers, terms and conditions, upcoming bill information, and certain account‑verification data, and was designed to enhance consumer control over financial data and increase competition in financial services.

However, in 2025 a federal court put the rule on hold, and under new leadership the CFPB reopened the rulemaking process, issuing an Advance Notice of Proposed Rulemaking to reconsider key elements of the framework—including which third parties may access consumer data, fee structures for data access, and the scope of privacy and security requirements.

As part of this process, the CFPB has indicated it expects to revise compliance timelines originally set under the 2024 final rule.

Other Legislative and Regulatory Changes

Various legislative and regulatory proposals are being considered by the executive branch of the federal government, Congress and various state governments, including Pennsylvania, that would result in substantial changes in banking, the regulation of banks, thrifts and other financial institutions, compensation, the regulation of financial markets and their participants, financial instruments and securities and the regulators and taxation of these entities.

Throughout 2025, Congress and the federal bank regulators expanded the scope of permissible digital asset activities for banks.

The Government Enabling New Innovative Unstoppable Systems Act, or GENIUS Act, enacted in July 2025 as a significant piece of

legislation aimed at establishing a comprehensive regulatory framework for stablecoins and digital assets in the U.S.

The GENIUS Act provides clarity on the treatment of digital currencies, including the framework for stablecoin issuances by bank and non-banking entities, custody, reserves and payments systems and adopts a supervisory framework for stablecoin issuers.

Under the GENIUS Act, banks are allowed to engage in stablecoin issuances and hold related reserves, provided they comply with established AML, KYC and capital adequacy standards.

In addition, the FDIC and Federal Reserve issued revised guidance regarding their engagement in crypto-related activities.

This guidance rescinds prior guidance which previously required banks to submit prior notifications to the FDIC before engaging in such activities.

Under the new framework, banks may engage in permissible crypto-related services, including custody and stablecoin reserve management, without needing to receive prior FDIC approval.

However, banks are still required to manage risks effectively, including market, liquidity, operational and cybersecurity risks, and to comply with all AML/CFT and consumer protection requirements.

While we are not yet involved in stablecoin issuance or similar digital asset services, we continue to monitor developments under the GENIUS Act and FDIC policy, particularly as they evolve in the areas of digital asset custody, payments systems and associated regulatory requirements.

The FDIC’s recent approach signals that smaller banks have greater flexibility to explore these opportunities, provided they adhere to compliance standards designed to protect customers and ensure safety and soundness.

Anti-Money Laundering and the USA PATRIOT ACT

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Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

For regulated entities having at least $1 billion in total assets the rules establish general qualitative requirements applicable to all covered entities, which include:

(i) prohibiting incentive arrangements that encourage inappropriate risks by providing excessive compensation;

(ii) prohibiting incentive arrangements that encourage inappropriate risks that could lead to a material financial loss;

(iii) establishing requirements for performance measures to appropriately balance risk and reward;

(iv) requiring board of director oversight of incentive arrangements;

and (v) mandating appropriate record-keeping.

For regulated entities with at least $1 billion in total assets, federal banking agencies have re‑proposed, but not yet finalized, rules under Section 956 of the Dodd‑Frank Act that would establish general qualitative standards for incentive‑based compensation arrangements.

Under the currently proposed framework, covered institutions would be required to:

(i) prohibit incentive arrangements that encourage inappropriate risk‑taking by providing excessive compensation;

(ii) prohibit incentive arrangements that could lead to material financial loss;

(iii) ensure performance measures appropriately balance risk and reward;

(iv) maintain robust board‑level oversight of incentive compensation programs;

and (v) implement sound record‑keeping practices.

These requirements reflect those contained in the May 2024 Notice of Proposed Rulemaking, which re‑issued the 2016 proposal;

however, because the six required federal agencies have not jointly finalized the rule, these standards are not yet binding and remain subject to further revision.

Pursuant to rules adopted by the stock exchanges and approved by the SEC in January 2013 under the Dodd-Frank Act, public company compensation committee members must meet heightened independence requirements and consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business