What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-13 compared with 2025-03-17 · 100 added, 76 removed, 432 unchanged (29% of the section changed)

8 unchanged sentences

These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes.

These estimates, assumptions and judgements are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements.

In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgements inherent in that policy, is critical in understanding our financial statements.

These estimates, assumptions and judgments are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements.

In particular, management has identified the provision and allowance for credit losses as the accounting policy that, due to the estimates, assumptions and judgments inherent in that policy, is critical in understanding our financial statements.

Management has presented the application of this policy to the audit committee of our board of directors.

The JOBS Act permitted us an extended transition period for complying with new or revised accounting standards affecting public companies.

We have elected to take advantage of this extended transition period, which means that the financial statements included in this Annual Report, as well as any financial statements that were filed prior to this Annual Report, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period.

The following is a discussion of the critical accounting policies and significant estimates that require us to make complex and subjective judgments.

1 unchanged sentence

Provision and allowance for credit losses

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.

2 unchanged sentences

The evaluation process combines several factors:

economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.

historical loan loss experience, managements ongoing review of lending policies and practices, experience and depth of staff, quality of the loan grading system, the fair value of underlying collateral, concentration of loans to specific borrowers or industries, existing economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.

Our reasonable and supportable forecast is for a period of four quarters.

9 unchanged sentences

Results of Operations

• Consolidated net income increased $3.1 million, or 23.4%.

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

• The return on average assets and return on average equity was 0.87% and 12.00%, respectively, for the year ended December 31, 2025, compared to 0.70% and 9.93%, respectively, for the year ended December 31, 2024.

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

• Non-interest income increased $9.4 million or 29.3% due largely to an improved mortgage banking environment.

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

• Non-interest income decreased $2.2 million or 5.2% due largely to a decline in MSR sales and a decline in other non-interest income.

Key Performance Ratios

26 unchanged sentences

• 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 leases;

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

• 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;

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

• Income Taxes , which include state and federal jurisdictions.

13 unchanged sentences

Investment securities - tax exempt (1)

54,525 1,546 2.84 56,698 1,604 2.83

Loans held for sale 29,771 1,864 6.26 34,775 2,226 6.40

Loans held for investment (1)

2,125,591 154,128 7.25 1,986,211 144,940 7.30

Total loans 2,155,362 155,992 7.24 2,020,986 147,166 7.28

18 unchanged sentences

Net interest margin (1)

3.64 % 3.16 %

(1) Yields and net interest income are reflected on a tax-equivalent basis.

23 unchanged sentences

(1) Yields and net interest income are reflected on a tax-equivalent basis.

Interest income increased $19.5 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $185.4 million, combined with a higher yield on earning assets, which increased 32 basis points.

Interest income increased $10.3 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $164.9 million, offset somewhat by a lower yield on earning assets, which decreased 5 basis points.

Average total loans held for investment increased $139.4 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $160.7 million on average, combined.

Home equity loans and residential real estate loans held in portfolio increased $14.4 million on average, combined.

Residential loans for sale increased $11.6 million on average.

The average yield on loans held for investment increased 35 basis points and the yield on cash and investments increased 46 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.

Interest expense increased $17.4 million, year over year, due primarily to market interest rate rises, as well as an increase of $178.0 million in average interest bearing deposits.

Interest expense on deposits increased $16.2 million with the cost of interest-bearing deposits increasing 56 basis points to 4.37%.

Total cost of deposits increased 58 basis points reflecting a decrease of $25.4 million in average non-interest bearing deposits.

Interest expense on borrowings increased $612 thousand as the cost decreased 5 basis points, and total average short-term borrowings increased $13.9 million.

Net interest margin decreased 19 basis points to 3.16% for the year ended December 31, 2024 from 3.35% for the year ended December 31, 2023, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the yield on earnings assets was outpaced by the increase in costs of funds, impacted also by the $25.4 million decrease in average non-interest bearing deposits.

Residential loans for sale decreased $5.0 million on average.

The average yield on loans held for investment decreased 5 basis points while the yield on cash and investments increased 9 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.

Interest expense decreased $6.4 million, year over year, due primarily to market interest rate declines, partially offset by an increase of $166.4 million in average interest bearing deposits.

Interest expense on deposits decreased $5.9 million with the cost of interest-bearing deposits having decreased 71 basis points to 3.66%.

Total cost of deposits decreased 59 basis points reflecting an increase of $9.0 million in average non-interest bearing deposits.

Interest expense on borrowings decreased $1.7 million as the cost decreased 16 basis points, and total average borrowings balances decreased $29.7 million.

Net interest margin increased 48 basis points to 3.64% for the year ended December 31, 2025 from 3.16% for the year ended December 31, 2024, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the decline in yield on earnings assets was outpaced by the decline in costs of funds, impacted also by the $9.0 million increase in average non-interest bearing deposits.

PROVISION FOR CREDIT LOSSES

1 unchanged sentence

The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments.

The increase in provision for funded loans of $4.4 million for the year ended December 31, 2024 was primarily due to an increase in net charge-offs year over year.

While net charge-offs increased $10.3 million in 2024 over 2023, nearly half of the loans charged-off were specifically reserved for in prior periods.

This increase was partially offset by the impact of favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the funded loss model.

The provision for unfunded loan commitments decreased $226 thousand during the year due to favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the unfunded loss model.

The increase in provision for funded loans of $3.4 million for the year ended December 31, 2025 was the result of an increase in net charge-offs on construction and small business loans and the resulting increase in specific reserves as nonperforming loans increased $9.9 million, largely small business loans.

The increase in provision was also impacted by an upgrade to the third-party macroeconomic forecast model used to estimate credit losses on the loan portfolio.

The model upgrade was based on re-assessing the current macroeconomic variable relationships to expected results.

The overall impact to the ACL from the model upgrade, before applying qualitative adjustments, was not considered material.

NON-INTEREST INCOME

6 unchanged sentences

Earnings on investment in life insurance 956 868 88 10.1 %

Gain on sale of MSRs 3,992 — 3,992 100.0 %

Gain on sale of OREO 317 — 317 100.0 %

Net gain on sale of MSRs 403 3,992 (3,589) (89.9) %

Net (loss) gain on sale of loans

(434) 15 (449) (2993.3) %

Net change in the fair value of derivative instruments 373 30 343 1143.3 %

1 unchanged sentence

Net change in the fair value of loans held-for-investment 659 214 445 207.9 %

Net (loss) gain on hedging activity (87) 28 (115) (410.7) %

Net loss on sale of investment securities available-for-sale (57) (58) 1 (1.7) %

Net (loss) on hedging activity (151) (87) (64) 73.6 %

Net gain (loss) on sale of investments AFS 501 (57) 558 (978.9) %

Other 4,012 6,152 (2,140) (34.8) %

Total non-interest income $ 39,180 $ 41,339 $ (2,159) (5.2) %

Total non-interest income increased $9.4 million as a result of higher mortgage banking revenue, the gain of $4.0 million on the sale of $6.6 million in residential loan servicing rights and an increase in wealth management revenue of $807 thousand.

Mortgage banking income increased $4.5 million, due to an increase of $178.0 million, or 28.6% in mortgage loan originations, despite the higher interest rate environment and continued lack of housing inventory.

SBA loan sale income decreased $1.0 million due to a decrease of $25.6 million, or 30.1%, in the volume of loans sold in 2024 compared to 2023.

Despite the decline in SBA loan sales volume, the gross margin on sales in 2024 was 8.0% overall, compared to 6.7% for 2023 sales.

The increase in wealth management revenue was due to increased assets under management and better market conditions in general.

Total non-interest income decreased $2.2 million, or 5.2%, from the year-ended December 31, 2024 to the year-end December 31, 2025.

Year over year there was a $2.0 million increase in SBA loan sale income, an increase in wealth management revenue of $581 thousand, as well as an increase of $1.1 million overall in changes in fair values.

SBA loan sale income increased due to an increase of $38.3 million, or 64.4%, in the volume of loans sold in 2025 to $97.8 million compared to 2024.

The gross margin on SBA sales in 2025 was 7.1% overall, compared to 8.0% for 2024 sales.

The $581 thousand increase in wealth management revenue was due to increased assets under management and better market conditions in general year over year.

The $1.1 million increase in the changes in fair values was due to a $343 thousand increase in the fair value of derivative instruments, a $335 thousand increase in fair value of loans held-for-sale, and a $445 thousand increase in the fair value of loans held-for-investment.

Offsetting these increases in non-interest income was a $3.6 million decrease in the net gain on sale of MSRs, a decline in net gains on sale of non-SBA related loans, and a decline on other non-interest income.

For the year-ended December 31, 2024 a gain of $4.0 million was recorded on the sale of $6.6 million in residential loan servicing rights, while for the year-ended December 31, 2025 there were sales of $979 thousand in residential loan servicing rights.

The sale of non-SBA loans resulted in a net loss of $434 thousand for the year-ended December 31, 2025, compared to a net gain of $15 thousand for the year-ended December 31, 2024.

These sales included a $25.0 million portion of the residential mortgage portfolio that was sold at the end of 2025 and a $440 thousand sale of a commercial loan in the third quarter of 2025.

Other non-interest income decreased $1.8 million due to smaller decreases in several miscellaneous income types.

NON-INTEREST EXPENSE

11 unchanged sentences

Total non-interest expense increased $4.2 million, or 5.2% to $83.3 million for the year ended December 31, 2025.

Occupancy and equipment expense increased $1.1 million overall, with $1.0 million of this increase due to fees, credits and other disposal costs for the early termination of the Blue Bell lease.

The lease termination is expected to improve occupancy expense by $359 thousand per year.

Professional fees increased $455 thousand as we incurred OREO related legal and professional fees as well as an increase in non-performing loan and lease workout expenses.

Advertising and promotion expense decreased $437 thousand as the result of a decline in mortgage related advertising expense and other promotional expense.

Data processing and software expense decreased $271 thousand due to volume based discounts obtained on certain transactional fees.

Other expense increased $1.2 million due to increases in certain loan expenses and employee related expenses.

The main drivers of this increase were salaries and employee benefits which increased $4.0 million, data processing and software expense increased $887 thousand, advertising and promotion expense increased $584 thousand, and other non-interest expense increased by $700 thousand.

Salaries and employee benefits increased $4.0 million due to the rising costs of benefits and headcount being up for the bank and wealth segments, leading to a nearly $2.5 million increase in salaries and related benefits and taxes.

There was also a nearly $1.5 million increase in incentive related expenses due to increased profitability in the current year.

Data processing and software expense increased $887 thousand due an increase in customer transaction volume and a continued investment in new and innovative technology to improve back-office and customer facing systems.

Advertising and promotion expense increased $584 thousand as the result of a television and digital advertising campaign that ran during 2025, combined with a higher level of charitable donations and

business development activities during the year.

Other expense increased $700 thousand due to an increase in OREO expenses related to the $2.3 million increase in the OREO balance year-over-year as 4 properties were added to this balance in 2025, combined with an increase in employee related expenses and certain loan expenses.

Partially offsetting these increases was a decrease of $1.4 million in occupancy and equipment expense and a decrease in professional fees.

Occupancy expense decreased year-over-year largely due to costs incurred in 2024 for the early termination of leases.

Professional fees decreased $672 thousand largely due to savings realized from a change in an internal audit outsourcing and tax accounting relationships, as well as legal costs related to the mortgage segment from 2024.

INCOME TAX EXPENSE

5 unchanged sentences

Effective tax rate 23.12 % 24.97 % (1.85) % (7.4) %

While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate also increased.

While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate decreased related to the impact of solar tax credits purchased at the end of 2025.

The effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, and excess tax benefits from recognized stock compensation.

5 unchanged sentences

Our loan portfolio is the largest category of our interest-earning assets.

As of December 31, 2024 and 2023, our total loans and leases amounted to $2.1 billion, and $1.9 billion, respectively.

As of December 31, 2025 and 2024, our total loans and other finance receivables amounted to $2.2 billion, and $2.1 billion, respectively.

Our loan portfolio is comprised of loans originated to be held in portfolio, as well as residential mortgage loans originated for sale.

4 unchanged sentences

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 loan and lease portfolio at the dates indicated:

The following table presents our loans and other finance receivables portfolio at the dates indicated:

(Dollars in thousands) December 31,

8 unchanged sentences

Total real estate loans 1,553,120 1,426,815 126,305 8.9 %

Commercial and industrial 367,366 302,891 64,475 21.3 %

Commercial, industrial & other finance receivables

428,981 367,366 61,615 16.8 %

Small business loans 139,765 155,775 (16,010) (10.3) %

1 unchanged sentence

Leases, net 45,489 75,987 (30,498) (40.1) %

Total portfolio loans and leases $ 2,026,292 $ 1,888,448 $ 137,844 7.3 %

Total loans and leases $ 2,058,705 $ 1,913,264 $ 145,441 7.6 %

Loans and other finance receivables $ 2,167,684 $ 2,026,292 $ 141,392 7.0 %

Total loans and other finance receivables $ 2,201,446 $ 2,058,705 $ 142,741 6.9 %

Portfolio loans increased $141.4 million, or 7.0% to $2.2 billion as of December 31, 2025, from $2.0 billion as of December 31, 2024.

The following table shows the amounts of loans outstanding as of December 31, 2024 which, based on remaining scheduled repayments of principal, are due in the periods indicated:

The following table shows the amounts of loans and other finance receivables outstanding as of December 31, 2025 which, based on remaining scheduled repayments of principal, are due in the periods indicated:

(dollars in thousands) 12 months or Less 1 - 5 years 5 - 15 years After 15 years Total

3 unchanged sentences

Construction 137,048 100,366 91,886 1,243 330,543

Commercial and industrial 88,337 105,376 56,984 116,669 367,366

Commercial, industrial & other finance receivables 58,321 144,833 76,162 149,665 428,981

Small business loans 432 11,368 86,583 41,382 139,765

1 unchanged sentence

Leases, net 5,235 39,084 1,170 — 45,489

Total portfolio loans and leases $ 253,526 $ 549,081 $ 797,490 $ 426,195 $ 2,026,292

The amounts have been classified according to sensitivity to changes in interest rates for amounts due after one year, as of December 31, 2024.

Loans and other finance receivables $ 269,590 $ 634,010 $ 832,623 $ 431,461 $ 2,167,684

The amounts have been classified according to sensitivity to changes in interest rates as of December 31, 2025.

Variance rate loans are those loans with floating or adjustable interest rates.

4 unchanged sentences

Construction 11,010 319,533 330,543

Commercial and industrial 68,495 298,871 367,366

Commercial, industrial & other finance receivables 62,811 366,170 428,981

Small business loans 5,429 134,336 139,765

1 unchanged sentence

Leases, net 45,489 — 45,489

Total $ 400,490 $ 1,625,802 $ 2,026,292

Loans and other finance receivables $ 369,844 $ 1,797,840 $ 2,167,684

Commercial real estate loans .

15 unchanged sentences

Construction loans represented 15.0% and 12.6% of our total loan portfolio at December 31, 2025 and 2024, respectively.

Commercial and Industrial Loans (C & I)

We provide a variety of variable and fixed rate commercial business loans and lines of credit.

These loans and lines of credit are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses.

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

We provide a variety of variable and fixed rate commercial business loans, lines of credit and other financing facilities.

These credit facilities are made to small and medium-sized manufacturers and wholesale, retail and service-related businesses.

Additionally, we lend to companies in the technology, healthcare, real estate and financial service industries.

Commercial business loans generally include lines of credit and term loans with a maturity of five years or less.

The primary source of repayment for commercial business loans is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees.

Other finance receivables include advances to merchants for short-term cash flow needs.

The primary source of repayment for commercial credit is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees.

Our C & I loans increased $61.6 million, or 16.8%, to $429.0 million at December 31, 2025 from $367.4 million at December 31, 2024.

4 unchanged sentences

We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs.

Our small business loans increased by $13.4 million, or 9.4%, to $155.8 million at December 31, 2024 from $142.3 million at December 31, 2023.

During 2024 we sold $59.4 million in SBA loans, a decrease of $25.6 million, or 30.1%, from $85.0 million in SBA loans sold in 2023.

Our small business loans decreased by $16.0 million, or 10.3%, to $139.8 million at December 31, 2025 from $155.8 million at December 31, 2024, due to an increase in sale of such loans during 2025.

During 2025 we sold $97.8 million in SBA loans, an increase of $38.3 million, or 64.4%, from $59.4 million in SBA loans sold in 2024.

The small business loans portfolio represented 6.3% and 7.6% of our total loan portfolio at December 31, 2025 and 2024, respectively.

17 unchanged sentences

We regularly evaluate the composition of our investment portfolio as the interest rate yield curve changes and may sell investment securities from time to time to adjust our exposure to interest rates or to provide liquidity to meet loan demand.

Not included in the tables below are equity investments that had fair values of $2.1 million as of December 31, 2024 and 2023.

Not included in the tables below are equity investments that had fair values of $2.2 million and $2.1 million, as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 we also had a held-to-maturity investment portfolio with amortized cost of $32.5 million.

16 unchanged sentences

December 31, 2024

(dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value # of Securities in unrealized loss position

(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:

7 unchanged sentences

Total securities available-for-sale $ 183,764 $ 700 $ (10,160) $ — $ 174,304 139

Amortized cost Gross unrecognized gains Gross unrecognized losses Fair value # of Securities in unrecognized loss position

Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position

Securities held to maturity:

3 unchanged sentences

The ratio of non-performing assets to total assets increased to 2.38% as of December 31, 2025, from 1.90% as of December 31, 2024.

There was $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.

There was $3.6 million and $159 thousand in other real estate property, as well as $2.4 million and $117 thousand of repossessed assets, included in non-performing assets as of December 31, 2025 and 2024, respectively.

The balance in OREO as of December 31, 2025 consisted of 4 well secured commercial properties, while the balance as of December 31, 2024 related to a well secured residential property.

The balance in repossessed assets as of December 31, 2025 consisted of a billboard asset from a commercial loan relationship and repossessed equipment that collateralized leases, while the balance as of December 31, 2024 related solely to repossessed equipment.

The ratio of non-performing loans to total loans increased to 2.50% as of December 31, 2025, from 2.19% as of December 31, 2024.

Total non-performing loans were $55.1 million and $45.1 million as of December 31, 2025 and December 31, 2024, respectively.

The increase in non-performing loans over the period was due to increases in non-performing construction loans, residential real estate loans, and small business loans of $6.0 million, $3.4 million, $2.8 million, respectively, partially offset by a decrease of $3.4 million in non-performing commercial loans due to a $3.5 million partial charge-off of a commercial loan relationship.

The increase in non-performing loans over the period was due to increases in non-performing small business loans, residential mortgage loans, and commercial mortgage loans of $12.5 million, $2.5 million, and $1.7 million, respectively, partially offset by a decrease of $5.2 million in non-performing commercial loans due to the charge-off of a few commercial loans.

Included in non-performing small business loans as of December 31, 2025 and December 31, 2024, are $13.2 million and $6.5 million in SBA guarantees, respectively.

Non-performing loans, net of the SBA guaranteed portion, as a percent of total loans were 1.90% and 1.87% as of December 31, 2025, and 2024, respectively.

Meridian realized net charge-offs of $11.9 million, or 0.55%, of total average loans for the year ended December 31, 2025, compared to net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024.

A majority of charge-offs for the year ended December 31, 2024 were from equipment leases, $5.9 million, commercial loans, $4.8 million, and small business loans, $4.3 million.

A majority of net charge-offs for the year ended December 31, 2025 were from small business loans of $5.0 million, commercial loans of $2.4 million, finance receivables of $2.2 million, and equipment leases of $1.5 million.

The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.00% as of December 31, 2025 compared to 0.91% as of December 31, 2024.

The decline in this coverage ratio was largely impacted by net charge-offs of individually evaluated loans of $4.8 million and $4.2 million in the commercial and industrial loan, and small business loan portfolios, respectively, combined with the decline in ACL on leases as we continue to refocus away from lease originations.

As of December 31, 2024 there were specific reserves of $2.7 million against individually evaluated loans, a decrease from $6.5 million as of December 31, 2023.

The drivers of the decrease related to a $2.9 million decrease in a commercial loan relationship specific reserve due to the charge-off note above, combined with a decline of $1 million in SBA loan specific reserves.

The increase in coverage ratio was driven by several factors including:

reserving for the year over year increase in non-performing loans and an increase in the baseline loss rates used in the ACL calculation for portfolios that drove the increase in non-performing loans, combined with an increase in qualitative reserve factors year-over-year.

As of December 31, 2025 there were specific reserves of $3.4 million against individually evaluated loans, an increase from $2.7 million as of December 31, 2024.

The drivers of the increase related to a $1.2 million increase in SBA loan specific reserves, partially offset with a $524 thousand decline in specific reserves on commercial loans.

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.

12 unchanged sentences

Total real estate loans 21,530 19,038

Commercial and industrial 11,966 15,413

Commercial, industrial & other finance receivables

Small business loans (1)

24,781 12,270

Leases 1,979 1,851

1 unchanged sentence

Other real estate owned 3,592 159

Repossessed assets 2,405 117

Total non-performing assets $ 61,057 $ 45,401

14 unchanged sentences

Allowance for credit losses 21,573 18,438

(1) Included in non-performing small business loans as of December 31, 2025, and 2024, respectively, are $13.2 million and $6.5 million in SBA guarantees.

(2) The allowance for credit losses to total loans held-for-investment (excluding loans at fair value) ratio is a non-GAAP financial measure.

9 unchanged sentences

Construction 2,067 15% 923 13%

Commercial and industrial 3,098 18% 4,518 16%

Commercial, industrial & other finance receivables

2,982 20% 3,098 18%

Small business loans 9,321 6% 6,304 8%

5 unchanged sentences

Residential mortgage 2 13

Commercial and industrial (6,304) (209)

Construction (738) —

Commercial, industrial & other finance receivables

(4,632) (6,304)

Small business loans (4,951) (4,164)

15 unchanged sentences

Non-interest bearing deposits increased $4.5 million, or 1.9%, from December 31, 2024.

Interest-bearing demand deposits decreased $9.5 million, or 6.3%, from December 31, 2023, while money market accounts/savings accounts increased $165.7 million, or 22.2%, during the period.

Interest-bearing demand deposits increased $15.9 million, or 11.3%, from December 31, 2024, while money market accounts and savings deposits increased $109.8 million, or 12.0%, during the period.

Business accounts comprised 52% of all deposits, consumer accounts and municipal deposits comprised 14% and 12%, respectively, and wholesale funding was approximately 22%.

9 unchanged sentences

Consolidated stockholders’ equity of the Corporation was $199.7 million, or 7.8% of total assets as of December 31, 2025 as compared to $171.5 million, or 7.2% of total assets as of December 31, 2024.

The increase in stockholders’ equity is the result of year-to-date net income of $16.3 million, and comprehensive income of $1.3 million, partially offset by dividends paid of $5.6 million, and $456 thousand in stock-based compensation and stock options exercised.

The increase in stockholders’ equity is the result of net income for the year ended December 31, 2025 of $21.8 million, net proceeds from the sale of common stock of $7.5 million, comprehensive income of $2.9 million, and $596 thousand in stock-based compensation and stock options exercised, partially offset by dividends paid of $5.7 million, and an increase of $425 thousand in ESOP leverage.

On February 28, 2023, the Corporation approved and declared a two-for-one stock split in the form of a 100% stock dividend, payable March 20, 2023, to shareholders of record as of March 14, 2023.

5 unchanged sentences

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.

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

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

(dollars in thousands) December 31,

2 unchanged sentences

Provision for credit losses 15,152 11,400

Pre-tax, pre-provision income $ 33,186 $ 23,782

Pre-provision net revenue $ 43,554 $ 33,186

(dollars in thousands) December 31,

3 unchanged sentences

Mortgage 1,077 4,113

Pre-tax, pre-provision income $ 33,186 $ 23,782

Pre-provision net revenue $ 43,554 $ 33,186

The table below provides the non-GAAP reconciliation for the Corporation’s tangible common equity ratio and tangible book value per common share.

12 unchanged sentences

Tangible book value per share (non-GAAP) $ 16.59 $ 14.93

The following is a reconciliation of the allowance for credit losses to total loans held for investment ratio at December 31, 2024.

The following is a reconciliation of the allowance for credit losses to loans and other finance receivables ratio at December 31, 2025.

This is considered a non-GAAP measure as the calculation excludes the impact of loans held for investment that are fair valued as these loan types are not included in the allowance for credit losses calculation.

18 unchanged sentences

At December 31, 2025, Meridian had borrowed $115.8 million and the FHLB had issued letters of credit, on Meridian’s behalf, totaling $178.6 million against its available credit lines.

At December 31, 2024, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $242.5 million of available short or long term funding through the CDARS program and $334.6 million of available short or long term funding through brokered CD arrangements.

At December 31, 2025, Meridian also had available $56.0 million of unsecured federal funds lines of credit with other financial institutions as well as $306.8 million of available short or long term funding through the CDARS program and brokered CD arrangements.

Management believes that Meridian has adequate resources to meet its short-term and long-term funding requirements.

20 unchanged sentences

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 7. Management’s Discussion and Analysis