What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-13 compared with 2025-03-17 · 322 added, 208 removed, 1631 unchanged (25% of the section changed)

41 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses - Qualitative Risk Factors

The Company has identified the allowance for credit losses (“ACL”) as a critical accounting estimate.

35 unchanged sentences

Accrued interest receivable 10,724 9,958

Other real estate owned 159 1,703

OREO and other repossessed assets 5,997 276

Deferred income taxes 4,215 4,669

21 unchanged sentences

( 26,079 ) ( 26,079 )

Unearned common stock held by employee stock ownership plan ( 1,006 ) ( 1,204 )

Unearned common stock held by ESOP ( 1,232 ) ( 1,006 )

Retained earnings 128,124 111,961

25 unchanged sentences

Earnings on investment in life insurance 956 868

Gain on sale of MSRs 3,992 —

Gain on sale of OREO 317 —

Net gain on sale of MSRs 403 3,992

Net (loss) gain on sale of loans ( 434 ) 15

Net change in the fair value of derivative instruments 373 30

1 unchanged sentence

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

Net (loss) gain on hedging activity ( 87 ) 28

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

Net (loss) on hedging activity ( 151 ) ( 87 )

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

Other 4,012 6,152

24 unchanged sentences

Change in fair value of investment securities available for sale, net of tax of $ 992 , and $ 239 , respectively

Reclassification adjustment for net losses realized in net income, net of tax effect of $ 14 , and $ 13 , respectively

Reclassification adjustment for net (gains) losses realized in net income, net of tax effect of $( 116 ), and $ 14 , respectively

Reclassification adjustment for securities transferred from available-for-sale to held-to-maturity, net of tax effect of $ 28 , and $ 28 , respectively

Unrealized investment gains, net of tax effect of $ 904 , and $ 281 , respectively

Net change in unrealized gains (losses) on interest rate swaps used in cash flow hedges, net of tax effect of $( 129 ) and $ 22 , respectively

Net change in unrealized (losses) gains on interest rate swaps used in cash flow hedges, net of tax effect of $ 53 and $( 129 ), respectively

Total other comprehensive income 2,863 1,280

9 unchanged sentences

Balance at January 1, 2024 $ 13,186 $ 80,325 $ ( 26,079 ) $ ( 1,204 ) $ 101,216 $ ( 9,422 ) $ 158,022

Adjustment to initially apply ASU No.

2016-13 for CECL (1), net of tax — — — — ( 2,228 ) — ( 2,228 )

Net income — — — — 16,346 — 16,346

2 unchanged sentences

— — — — ( 5,601 ) — ( 5,601 )

Net purchase of treasury stock through publicly announced plans ( 312,447 shares)

— — ( 4,258 ) — — — ( 4,258 )

Common stock issued through share-based awards and exercises ( 57,000 )

8 unchanged sentences

— — — — ( 5,673 ) — ( 5,673 )

Shares purchased for ESOP plan ( 29,253 )

— — — ( 425 ) — — ( 425 )

Net issuance of common stock ( 488,478 )

489 7,030 — — — — 7,519

Common stock issued through share-based awards and exercises ( 98,000 )

12 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on sale of investment securities available-for-sale 57 58

(Gain) loss on sale of investment securities available-for-sale

Net amortization of investment premiums and discounts and change in fair value of equity securities 1,738 3,991

7 unchanged sentences

Amortization and net impairment of servicing rights ( 529 ) 1,481

Gain on sale of MSRs ( 3,992 ) —

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

Gain on sale of OREO ( 15 ) ( 317 )

6 unchanged sentences

Increase in other assets

( 6,885 ) ( 4,559 )

Earnings from investment in bank owned life insurance ( 956 ) ( 868 )

Increase in deferred income tax

(Decrease) increase in accrued interest payable ( 3,464 ) 7,935

Decrease in other liabilities ( 760 ) ( 1,278 )

( 373 ) ( 799 )

Decrease in accrued interest payable

( 329 ) ( 3,464 )

Increase (decrease) in other liabilities

3,142 ( 760 )

Net cash provided by operating activities

6 unchanged sentences

Maturities, repayments and calls 3,000 1,720

Purchases ( 2,000 ) —

Proceeds from sale of OREO 15 1,861

Proceeds from sale of MSRs 1,382 9,877

Increase in restricted stock 319 ( 1,141 )

Proceeds from sale of loans held for investment 122,721 59,446

Net purchases of restricted investments in bank stocks

Net increase in loans ( 270,698 ) ( 206,715 )

Purchases of premises and equipment ( 1,732 ) ( 568 )

Net purchase of bank owned life insurance ( 19 ) —

Disposal of premise and equipment

Net cash used in investing activities ( 163,902 ) ( 164,996 )

1 unchanged sentence

Net increase in deposits 152,760 181,906

(Decrease) increase in short-term borrowings ( 42,592 ) 28,077

(Decrease) increase in long-term debt ( 7,833 ) 24,737

Increase (decrease) in short-term borrowings

8,112 ( 42,592 )

Decrease in long-term debt

( 15,245 ) ( 7,833 )

Repayment of subordinated debt ( 13 ) ( 215 )

Proceeds from issuance of subordinated debt — 9,740

Issuance costs on subordinated debt — ( 9 )

Net purchase of treasury stock — ( 4,258 )

Dividends paid ( 5,673 ) ( 5,601 )

Share based awards and exercises 499 309

Stock based awards and exercises 885 499

Shares purchased for ESOP plan

Proceeds from issuance of common stock 7,519 —

Net cash provided by financing activities 147,920 126,164

6 unchanged sentences

Income taxes:

Transfers from loans held for sale to loans held for investment — 351

Transfers from loans held for investment to loans held for sale — 21,800

Federal 10,224 2,500

State 989 583

Total Income taxes 11,213 3,083

Carrying value of residential portfolio loans sold

Net loans sold, not settled 1,834 9,674

Non-cash transfers from loans receivable to OREO 3,592 —

Non-cash transfers from loans receivable to repossessed assets 2,405 —

The accompanying notes are an integral part of these consolidated financial statements.

13 unchanged sentences

The Bank was incorporated on March 16, 2004 under the laws of the Commonwealth of Pennsylvania and is a Pennsylvania state-chartered bank.

The Bank commenced operations on July 8, 2004 and is a full-service bank providing personal and business lending and deposit services through 6 full-service banking offices in Pennsylvania, 6 mortgage loan production offices throughout the Delaware Valley, and 4 mortgage loan production offices in Maryland, and a lending office in Florida.

The Bank commenced operations on July 8, 2004 and is a full-service bank providing personal and business lending and deposit services through 7 full-service banking offices ( 6 in Pennsylvania and 1 in Florida), 5 mortgage loan production offices throughout the Delaware Valley, 2 mortgage loan production offices in Maryland, and a lending office in Florida.

The Bank and Corporation are headquartered in Malvern, Pennsylvania, located in the western suburbs of Philadelphia.

71 unchanged sentences

Allowance for Credit Losses - Loans and Leases

On January 1, 2023, the Corporation adopted ASU 2016-13, Financial Instruments-Credit Losses ("Topic 326"), which replaced the incurred loss impairment model with an expected loss methodology that is referred to as the CECL methodology.

The ACL includes quantitative and qualitative factors that comprise management's current estimate of expected credit losses, including portfolio mix and segmentation, modeling methodology, historical loss experience, relevant available information from internal and external sources relating to reasonable and supportable forecasts about future economic conditions, prepayment speeds, and qualitative adjustment factors.

The Corporation recorded a one-time decrease to retained earnings of $ 2.2 million on January 1, 2023 for the cumulative effect of adopting ASC 326, net of tax.

The transition adjustment included $ 1.2 million and $ 974 thousand post-tax impacts for loans, net of fees and costs and unfunded loan commitments, respectively, due to higher expected credit losses compared to the incurred loss methodology primarily driven by small ticket equipment leases and longer duration commercial and consumer real estate loans.

The Corporation's portfolio segments, established based on similar risk characteristics and loss behaviors, are:

44 unchanged sentences

The economic forecast and reversion periods will be evaluated periodically by management and updated as appropriate.

During the fourth quarter of 2025 the third-party macroeconomic model we use was upgraded based on re-assessing the current macroeconomic variable relationships to expected results, and by expanding the dataset used to estimate losses to include more recent periods..

The resulting ACL from the model upgrade, before applying qualitative adjustments, was consistent with the ACL level before the upgrade.

The historical loss rates for commercial loans are estimated by determining the PD and expected LGD.

2 unchanged sentences

The Corporation's current look-back period is 44 quarters which helps to ensure that historical loss rates are adequately considering losses over a full economic cycle.

Qualitative adjustment factors consider various internal and external conditions which are allocated among loan segments and take into consideration:

• Current underwriting policies, staff and portfolio concentrations,

• Risk rating accuracy, credit and administration,

• Internal risk emergence (including internal trends of delinquency, portfolio growth, and collateral value), and

• , Competitive environment, as it could impact loan structure and underwriting.

These factors are based on their relative standing compared to the period in which historical losses are used in quantitative reserve estimates and current directional trends, and reasonable and supportable forecasts.

Qualitative factors in the model can add to or subtract from quantitative reserves.

Loans that do not share similar risk characteristics with any loan segments are evaluated on an individual basis.

7 unchanged sentences

For collateral dependent loans, the expected credit losses at the individual asset level is the difference between the collateral's fair value (less cost to sell) and the amortized cost.

Qualitative adjustment factors consider various internal and external conditions which are allocated among loan segments and take into consideration:

• Current underwriting policies, staff and portfolio concentrations,

• Risk rating accuracy, credit and administration,

• Internal risk emergence (including internal trends of delinquency, portfolio growth, and collateral value), and

• , Competitive environment, as it could impact loan structure and underwriting.

Qualitative factors in the model can add to or subtract from quantitative reserves.

Loan officers and risk managers meet at least quarterly to discuss and review the conditions and risks associated with individual problem loans.

14 unchanged sentences

Time elapsing between the issuance of a loan commitment and closing and sale of the loan generally ranges from 30 days to 120 days.

The Corporation protects itself from changes in interest rates through the use of best efforts forward sale contracts, whereby the Corporation commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan.

The Corporation may also commit to loan sales through a mandatory sales channel which are economically hedged by the future sale of mortgage-backed securities to third-party counterparties to mitigate the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale.

17 unchanged sentences

Such sales are recorded in income at the time of the sale when servicing fee income is transferred to the buyer.

During the year ended December 31, 2024, the Corporation sold approximately $ 6.6 million of residential mortgage loan servicing rights associated with $ 777.2 million of serviced loans, and recorded a gain on sale of $ 4.0 million.

Other Real Estate Owned

1 unchanged sentence

The Corporation acquires OREO through the wholly owned subsidiary of the Bank, Apex Realty.

OREO is recorded at the lower of cost or fair value, or the loan amount net of estimated selling costs, at the date of foreclosure.

OREO is recorded at the fair value of the collateral less estimated selling costs, at the date of foreclosure.

The cost basis of OREO is its recorded value at the time of acquisition.

1 unchanged sentence

Revenues, such as rental income, and holding expenses, as applicable, are included in other income and other expenses, respectively.

The Corporation had one property of $ 159 thousand and two properties of $ 1.7 million OREO at December 31, 2024 and December 31, 2023, respectively.

During the quarter ended December 31, 2024, one property was sold and a gain of $ 317 thousand was recognized.

The Corporation had four properties totalling $ 3.6 million and one property of $ 159 thousand OREO at December 31, 2025 and December 31, 2024, respectively.

During the year-ended December 31, 2025, one property was sold and a gain of $ 15 thousand was recognized, while for the year-ended December 31, 2024, one property was sold and a gain of $ 317 thousand was recognized.

Repossessed Assets

Repossessed assets, which exclude OREO, is comprised of other loan and lease related collateral acquired through foreclosure or similar proceedings.

These assets are initially recorded at the lower of cost or fair value less estimated selling costs at the time of acquisition.

Subsequent to acquisition, the assets are periodically evaluated, and any declines in fair value below the carrying amount are recognized as a valuation allowance or direct write-down, with such losses reflected in non-interest expense.

The $ 2.4 million balance of repossessed assets as of December 31, 2025 was comprised of a billboard that was collateral for a non-performing commercial loan, in addition to small equipment items that were previously collateralizing leases, while the $ 117 thousand balance as of December 31, 2024 was comprised of small equipment items that were previously collateralizing leases.

Restricted Investment in Bank Stock

9 unchanged sentences

Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered.

Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the

Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Bank Premises and Equipment

30 unchanged sentences

Full vesting in the Corporation’s contribution to the Plan and ESOP is over a three-year period.

The Corporation recorded expense for the Plan and ESOP of $ 905 thousand and $ 799 thousand, respectively for the year ended December 31, 2024 and $ 1.0 million and $ 858 thousand, respectively for the year ended December 31, 2023.

The Corporation recorded expense for the Plan and ESOP of $ 1.0 million and $ 918 thousand, respectively for the year ended December 31, 2025 and $ 905 thousand and $ 799 thousand, respectively for the year ended December 31, 2024.

The expense recorded by the Corporation for the ESOP for the year ended December 31, 2025 included a $ 525 thousand employer contribution, in addition to $ 593 thousand in stock compensation related expense.

The expense recorded by the Corporation for the ESOP for the year ended December 31, 2024 included a $ 490 thousand employer contribution, in addition to $ 520 thousand in stock compensation related expense.

During the year ended December 31, 2024, 0 shares were purchased by the ESOP, while for the year ended December 31, 2023, 81,316 shares were purchased by the ESOP.

Shares in the ESOP that are committed to be released to employees are treated as outstanding shares in the Corporation’s computation of earnings per share.

During 2020 the Corporation established a $ 2 million loan with the ESOP, and the ESOP used all of the loan proceeds to purchase 266,560 Corporation common shares in that year (the “2020 ESOP Loan”).

As of December 31, 2025, 159,936 of these common shares were released to the ESOP, leaving 106,624 unallocated shares.

During 2025 the Corporation established a second $ 2 million loan with the ESOP, and the ESOP used a portion of the loan proceeds to purchase 29,253 Corporation common shares in the year (the “2025 ESOP Loan”).

As of December 31, 2025, 0 of these common shares were released to the ESOP, leaving all 29,253 common shares unallocated.

Overall between the two ESOP loans, during the year ended December 31, 2025, 29,253 shares were purchased by the ESOP, and for the year ended December 31, 2024, 0 shares were purchased by the ESOP.

Overall, as of December 31, 2025, 159,936 of these common shares were released to the ESOP leaving 135,877 unallocated shares.

Shares in the ESOP that are committed to be released to employees are treated as outstanding shares in the Corporation’s computation of earnings per share.

There were 483,205 shares in the ESOP as of December 31, 2025.

1 unchanged sentence

Deferred income taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and net operating losses and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and net operating loss carry-forwards and their tax basis.

differences are the differences between the reported amounts of assets and liabilities and net operating loss carry-forwards and their tax basis.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.

23 unchanged sentences

The allowance for credit losses for off-balance sheet exposures is included in Other liabilities on the Consolidated Balance Sheets and the provision for credit losses for off-balance sheet exposure is included in the provision for credit losses on the Consolidated Statements of Income for the periods ended December 31, 2025, and December 31, 2024.

The allowance for credit losses for off-balance sheet exposures was $ 817 thousand and $ 1.0 million as of December 31, 2024 and December 31, 2023, respectively.

The allowance for credit losses for off-balance sheet exposures was $ 976 thousand and $ 817 thousand as of December 31, 2025 and December 31, 2024, respectively.

Derivative Financial Instruments

11 unchanged sentences

The changes in the fair value of cash flow hedges are initially reported in other comprehensive income.

Amounts are subsequently reclassified from accumulated other comprehensive income to earnings when the hedged transactions occur, specifically within the same line item as the hedged item.

Amounts are subsequently reclassified from

accumulated other comprehensive income to earnings when the hedged transactions occur, specifically within the same line item as the hedged item.

Earnings per Common Share

5 unchanged sentences

The Corporation recognizes all sources of income on the accrual method, with the exception of nonaccrual loans and leases.

In addition to lending and related activities, the Corporation offers various services that generate revenue, certain of which are in the scope of FASB ASU 2014-09 (Topic 606), “Revenue for Contracts with Customers” (ASC 606) is recognized within non-interest income and include wealth management fees, and transaction based and fees.

In addition to lending and related activities, the Corporation offers various services that generate revenue, certain of which are in the scope of ASC 606, and are recognized within non-interest income and include wealth management fees and transaction based fees.

Revenue is recognized when the transactions occur or as services as performed over primarily monthly or quarterly periods.

30 unchanged sentences

The following pronouncements were adopted in 2025, but did not have a material impact on our consolidated financial statements.

• FASB ASU 2020-04 (Topic 848), “Reference Rate Reform (“ASC 848”):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting”

• FASB ASU 2020-06, “Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”

• FASB ASU 2023-02, "Investments Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method"

FASB ASU 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures”

The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.

The amendments in this update also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

adoption of this standard did not have a material impact on the Corporation’s financial statements.

Refer to Note 20 - Segments for detailed segment disclosures.

FASB ASU 2024-01 Stock Compensation - Scope Application of Profits Interest and Similar Awards

The amendments in this update improve the understandability of paragraph 718-10-15-3 and apply to all entities that enter into share-based payments transactions and are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis.

The adoption of this guidance did not have a material impact on the Corporation's consolidated financial statements.

FASB ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures”

On December 31, 2025, the Corporation adopted ASU 2023-09 which enhances income tax disclosures to help investors better assess how a company's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The amendments in this update led to a further disaggregation of information about our effective tax rate reconciliation and information on income taxes paid in these footnotes.

We adopted ASU 2023-09 on a retrospective basis.

The adoption of this guidance did not have a material impact on the Corporation's consolidated financial statements.

Pronouncements Not Effective as of December 31, 2025:

1 unchanged sentence

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative".

This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC.

The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations.

For entities subject to the SEC's existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules.

This ASU amends the disclosure or presentation requirements related to various subtopics in the ASC.

The amendments are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations.

For entities subject to the SEC's existing disclosure requirements the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules.

For all other entities, the amendments will be effective two years later.

However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity.

FASB ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures”

The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in this update are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis.

Early adoption is permitted.

The Corporation is currently evaluating the impact on its disclosures.

FASB ASU 2024-01 Stock Compensation - Scope Application of Profits Interest and Similar Awards

The amendments in this update improve the understandability of paragraph 718-10-15-3 apply to all entities that enter into share-based payments transactions.

The amendments in this update are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis.

The Corporation is currently evaluating the impact on its disclosures.

FASB Accounting Standards Update (ASU) 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,

FASB ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)"

This amendment requires enhanced disaggregation of certain expense categories within the income statement to provide more detailed information about the nature and function of expenses.

2 unchanged sentences

These changes may be applied prospectively or retroactively.

Early adoption is permitted and The Corporation is currently evaluating the impact on its disclosures.

Early adoption is permitted.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date"

This amendment addresses questions that were raised regarding the effective date of ASU 2024-03 for public business entities with non-calendar year ends.

The amendment clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).”

This update modernizes internal-use software guidance to apply regardless of the method used to develop software.

The amendment will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) – Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract”

This update refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting and clarifies guidance under Topic 606 for share-based noncash consideration from a customer in revenue contracts.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-08, “Financial Instruments - Credit Losses (Topic 326):

Purchased Loans”.

This ASU changes the accounting for certain acquired loans by requiring entities to apply a “gross-up” approach at acquisition for purchased seasoned loans, recognizing an allowance for credit losses as part of the acquisition accounting rather than through a post-acquisition provision.

The amendments are to be applied prospectively to loans acquired on or after the initial application date.

The ASU will be effective for the annual reporting period beginning after December 15, 2026.

Early adoption is permitted.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-11, “Interim Reporting (Topic 270) Narrow-Scope Improvements.”

This ASU clarifies when Topic 270 applies and enhances usability by (among other changes) specifying the form/content of interim financial statements, providing a comprehensive list of required interim disclosures, and introducing a disclosure principle for material events since the last annual period-without intending to significantly expand or reduce interim disclosure requirements.

The amendments in this update are effective for the annual reporting period beginning after December 15, 2027.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

FASB ASU 2025-12, “Codification Improvements.”

This ASU is part of the FASB's standing "evergreen" project and makes a broad set of technical corrections, clarifications, and other minor improvements across many Topics to make the Codification easier to understand and apply.

The amendments in this update are effective for the annual reporting period beginning after December 15, 2026, and interim periods within that fiscal year.

The Corporation is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

(2) Earnings per Common Share

11 unchanged sentences

Dilutive effects of assumed exercises of stock options 212 130

Dilutive effects of SERP shares — 128

Diluted weighted average shares outstanding 11,538 11,243

94 unchanged sentences

Total securities held-to-maturity $ 1,048 $ ( 15 ) $ 27,271 $ ( 3,271 ) $ 28,319 $ ( 3,286 )

The amortized cost and carrying value of securities are shown below by contractual maturities at the dates indicated.

Amortized cost and carrying value of securities are shown below by contractual maturities at the dates indicated.

Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties.

10 unchanged sentences

Total $ 199,127 $ 193,457 $ 32,544 $ 30,152

The following table presents the gross loss on sale of investment securities available for sale on the dates indicated:

The following table presents the gross gains and losses on sale of investment securities available for sale on the dates indicated:

(dollars in thousands) 2025 2024

Proceeds from sale of investment securities $ 14,365 $ 16,004

Gross gain on sale of available for sale investments 594 —

Gross loss on sale of available for sale investments ( 93 ) ( 57 )

7 unchanged sentences

Pledged Securities

As of December 31, 2024 and December 31, 2023, securities having a carrying value of $ 43.3 million and $ 60.1 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes.

The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.

At December 31, 2025 and December 31, 2024, securities having a carrying value of $ 69.5 million and $ 43.3 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes.

There is a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.

(5) Loans and Other Finance Receivables

8 unchanged sentences

Total real estate loans 1,553,120 1,426,815

Commercial and industrial 367,366 302,891

Commercial, industrial & other finance receivables 428,981 367,366

Small business loans 139,765 155,775

2 unchanged sentences

Loans and other finance receivables $ 2,167,684 $ 2,026,292

Balances included in loans and other finance receivables, net of fees and costs:

Balances included in loans and other finance receivables

Residential mortgage real estate loans accounted under fair value option, at fair value $ 14,396 $ 14,501

1 unchanged sentence

Unearned lease income included in leases, net ( 4,980 ) ( 9,057 )

Unamortized net deferred loan origination costs 4,145 7,358

Unamortized net deferred loan origination costs, not included in loans above 2,916 4,145

Fair Value Option for Residential Mortgage Real Estate Loans

10 unchanged sentences

Construction — — — 323,893 323,893 6,650 330,543 2.01

Commercial and industrial — — — 355,400 355,400 11,966 367,366 3.26

Commercial, industrial & other finance receivables

1,099 — 1,099 421,112 422,211 6,770 428,981 1.83

Small business loans 739 — 739 114,245 114,984 24,781 139,765 18.26

10 unchanged sentences

Construction 1,000 — 1,000 249,940 250,940 8,613 259,553 3.70

Commercial and industrial — — — 287,478 287,478 15,413 302,891 5.09

Commercial, industrial & other finance receivables

— — — 355,400 355,400 11,966 367,366 3.26

Small business loans 1,351 — 1,351 142,154 143,505 12,270 155,775 8.74

2 unchanged sentences

Total $ 8,122 $ 611 $ 8,733 $ 1,972,434 $ 1,981,167 $ 45,125 $ 2,026,292 2.66 %

(1) Includes $ 13.7 million of loans at fair value of which $ 12.9 million are current, $ 0 are 30-89 days past due and $ 786 thousand are nonaccrual.

(1) Includes $ 14.5 million of loans at fair value of which $ 13.7 million are current, $ 473 thousand are 30-89 days past due and $ 340 thousand are nonaccrual.

There were no loans in the tables above as of December 31, 2025 or December 31, 2024 that were 90+days past due and still accruing interest.

Foreclosed and Repossessed Assets

At December 31, 2024 and December 31, 2023, there were 4 and 4 consumer mortgage loans, respectively, totaling $ 1.3 million and $ 937 thousand, respectively, secured by residential real estate properties (included in loans, net of fees and costs on the Consolidated Balance Sheets) for which formal foreclosure proceedings were in process.

At December 31, 2025 and December 31, 2024, there were 11 and 4 consumer mortgage loans, respectively, totaling $ 3.1 million and $ 1.3 million, respectively, secured by residential real estate properties (included in loans, net of fees and costs on the Consolidated Balance Sheets) for which formal foreclosure proceedings were in process.

Risks and Uncertainties

4 unchanged sentences

Commercial loans are generally viewed as having more inherent risk of default than residential real estate loans or other consumer loans.

Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

Also, the commercial loan balance

per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

Past Due and Nonaccrual Status

The following table presents the amortized costs basis of loans and leases on nonaccrual status and loans 90 days or more past due and still accruing, net of fees and costs as of December 31, 2024 and 2023.

The following table presents the amortized costs basis of loans and leases on nonaccrual status, net of fees and costs as of December 31, 2025 and 2024.

As of these dates there were no loans 90 days or more past due and still accruing.

5 unchanged sentences

Construction 1,889 4,761 6,650 8,613 — 8,613

Commercial and industrial 1

Commercial, industrial & other finance receivables

6,770 — 6,770 9,166 2,800 11,966

Small business loans (1)

18,050 6,731 24,781 8,179 4,091 12,270

Leases, net — 1,979 1,979 1,851 — 1,851

Total $ 40,224 $ 14,836 $ 55,060 $ 37,852 $ 7,273 $ 45,125

(1) Increase in commercial and industrial nonaccrual loans with ACL relates to a repurchased loan as described further in footnote 6.

(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.

Collateral-dependent Loans

6 unchanged sentences

Construction 6,650 — 6,650 8,613 — 8,613

Commercial and industrial 1,344 10,622 11,966 1,890 13,523 15,413

Commercial, industrial & other finance receivables

1,372 5,398 6,770 1,344 10,622 11,966

Small business loans 19,287 5,494 24,781 10,164 2,106 12,270

Leases, net — 1,851 1,851 — 2,131 2,131

Total $ 42,189 $ 10,892 $ 53,081 $ 30,546 $ 12,728 $ 43,274

The decline in equipment and other collateral for commercial and industrial loans year over year was directly due to the $ 3.5 million partial charge-off on a protracted commercial advertising loan relationship, while the increase in construction and small business loan based real estate collateral was due to the increase in non-accrual loans in both of these portfolios.

(6) Allowance for Credit Losses

3 unchanged sentences

Roll-Forward of Allowance by Portfolio Segment

The following tables provide the activity of our allowance for credit losses for the years ended December 31, 2024 and 2023 under the CECL model in accordance with ASC 326 (as adopted on January 1, 2023):

The following tables provide the activity of our ACL for the years ended December 31, 2025 and 2024 under the CECL model in accordance with ASC 326:

Year Ended December 31, 2025

(dollars in thousands) Beginning Balance Initial PCD on purchased loan Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending Balance

(dollars in thousands) Beginning Balance Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending Balance

Commercial mortgage $ 3,469 $ — $ — $ 207 $ 3,676

2 unchanged sentences

Construction 923 ( 738 ) — 1,882 2,067

Commercial and industrial 4,518 574 ( 6,367 ) 63 4,310 3,098

Commercial, industrial & other finance receivables

3,098 ( 4,788 ) 156 4,516 2,982

Small business loans 6,304 ( 4,989 ) 38 7,968 9,321

2 unchanged sentences

Total $ 18,438 $ ( 12,884 ) $ 1,026 $ 14,993 $ 21,573

(1) - Meridian repurchased, at a discount of $ 574 thousand, the remaining balance of a commercial loan participation to another bank.

The discount was recorded as a PCD loan in the ACL rollforward as presented above.

As noted above, on July 17, 2024 Meridian repurchased, at a discount of $ 574 thousand, the remaining balance of a commercial loan participation to another bank.

At the time of purchase the determination was made that this loan had experienced more than insignificant deterioration in credit quality since origination.

The impact of this loan repurchase increased the balance of non-performing loans by $ 2.1 million and also increased the ACL by $ 574 thousand as this loan is classified as a PCD loan.

This initial measurement of expected credit losses on a PCD loan has no impact on net income.

Subsequent changes to the ACL on the PCD loan would be recognized through a provision for credit losses.

Year Ended December 31, 2024

(dollars in thousands) Beginning Balance Adjustment to initially apply ASU No.

2016-13 for CECL Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending Balance

(dollars in thousands) Beginning Balance Initial PCD on purchased loan (1)

Charge-offs Recoveries Provision (recovery of provision) for credit losses Ending Balance

Commercial mortgage $ 4,375 $ — $ — $ — $ ( 906 ) $ 3,469

2 unchanged sentences

Construction 485 — — — 438 923

Commercial and industrial 4,012 ( 1,023 ) ( 266 ) 57 1,738 4,518

Commercial, industrial & other finance receivables

4,518 574 ( 6,367 ) 63 4,310 3,098

Small business loans 7,005 — ( 4,300 ) 136 3,463 6,304

2 unchanged sentences

Total $ 22,107 $ 574 $ ( 16,674 ) $ 838 $ 11,593 $ 18,438

(1) - Meridian repurchased, at a discount of $ 574 thousand, the remaining balance of a commercial loan participation to another bank.

The discount was recorded as a PCD loan in the ACL rollforward as presented above.At the time of purchase the determination was made that this loan had experienced more than insignificant deterioration in credit quality since origination.

The impact of this loan repurchase increased the balance of non-performing loans by $ 2.1 million and also increased the ACL by $ 574 thousand as this loan is classified as a PCD loan.

This initial measurement of expected credit losses on a PCD loan has no impact on net income.

Subsequent changes to the ACL on the PCD loan would be recognized through a provision for credit losses.

Reconciliation of Provision for Credit Losses

2 unchanged sentences

Provision for credit losses - funded loans $ 14,993 $ 11,593

Recovery for credit losses - unfunded loans ( 193 ) ( 419 )

Provision (recovery) for credit losses - unfunded loans

Total provision for credit losses $ 15,152 $ 11,400

7 unchanged sentences

Residential mortgage (1)

122 804 926 9,875 211,864 221,739

Construction 331 1,736 2,067 6,650 323,893 330,543

Commercial and industrial 855 2,243 3,098 11,966 355,400 367,366

Commercial, industrial & other finance receivables

— 2,982 2,982 6,770 422,211 428,981

Small business loans 2,986 6,335 9,321 24,781 114,984 139,765

2 unchanged sentences

$ 3,439 $ 18,134 $ 21,573 $ 52,571 $ 2,100,717 $ 2,153,288

1) Excludes deferred fees and loans carried at fair value.

(1) Excludes $ 14.4 million of loans at fair value.

(2) Excludes deferred fees.

December 31, 2024

4 unchanged sentences

Residential mortgage (1)

29 992 1,021 7,560 230,504 238,064

Construction — 923 923 8,613 250,940 259,553

Commercial and industrial 3,691 827 4,518 15,413 287,478 302,891

Commercial, industrial & other finance receivables

855 2,243 3,098 11,966 355,400 367,366

Small business loans 1,808 4,496 6,304 12,270 143,505 155,775

2 unchanged sentences

$ 2,692 $ 15,746 $ 18,438 $ 42,934 $ 1,968,857 $ 2,011,791

1) Excludes deferred fees and loans carried at fair value.

The $ 3.7 million decline in the overall funded ACL from December 31, 2023 to December 31, 2024 was driven by declines in the ACL on commercial and industrial loans and small business loans due to net charge-offs recorded during 2024 in both of these portfolios, combined with a decline in the ACL on the lease portfolio as we continue to refocus away from lease originations.

(1) Excludes $ 14.5 million of loans at fair value.

(2) Excludes deferred fees.

The $ 3.1 million increase in the overall funded ACL from December 31, 2024 to December 31, 2025 was driven by increases in the ACL on small business loans due to an increase in nonperforming loans and net charge-offs, combined with an increase in net charge-offs on construction loans during 2025.

These increases in ACL were partially offset by a decline in the ACL on the lease portfolio as this portfolio continues to run off.

Credit Quality Indicators

25 unchanged sentences

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ ( 738 ) $ ( 738 )

Commercial and industrial

Commercial, industrial & other finance receivables

Pass/Watch $ 84,183 $ 62,904 $ 16,119 $ 17,270 $ 9,224 $ 21,836 $ — $ 193,356 $ 404,892

28 unchanged sentences

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial and industrial

Commercial, industrial & other finance receivables

Pass/Watch $ 81,352 $ 23,658 $ 16,844 $ 15,634 $ 8,499 $ 23,220 $ — $ 162,980 $ 332,187

82 unchanged sentences

Small business loans 4 $ 1,556 1.1 % $ — 6 $ 3,534 2.3 % $ —

Commercial 7 3,156 0.9 % — 2 2,401 0.8 % —

Construction 2 10,526 3.2 % — — — —% —

Commercial mortgage 3 1,388 0.2 % — — — —% —

Commercial, industrial & other finance receivables 1 1,099 0.3 % — 7 3,156 0.9 % —

Leases 7 271 0.6 % 9 — — —% —

Total 17 $ 14,840 $ 9 13 $ 6,690 $ —

2 unchanged sentences

Construction 3 4,331 1.3 % 185 2 1,856 0.7 % —

Commercial 5 2,792 0.8 % — 1 1,324 0.4 % 689

Commercial, industrial & other finance receivables 2 850 0.2 % — 5 2,792 0.8 % —

Leases 18 606 1.3 % 19 — — —% —

Home equity lines and loans 1 456 0.4% — — — —% —

Residential mortgage 2 905 0.4 % — 3 546 0.2 % 19

7 unchanged sentences

Small business loans 4 Extend maturity date 6 Extend maturity date

Commercial 7 Extend maturity date and allow additional lender funding 2 Extend maturity date

Construction 2 Extend maturity date and allow additional funding — Extend maturity date

Commercial mortgage 3 Extend maturity date and allow additional funding —

Commercial, industrial & other finance receivables 1 Extend maturity date 7 Extend maturity date and allow additional funding

Leases 7 Extend maturity date —

Nonaccrual Modified Loans to Borrowers Experiencing Financial Difficulty:

Small business loans 3 Extend maturity date 3 Extend term and allow additional lender funding

Construction 2 Extend maturity date —

Commercial 5 Extend maturity date 1 Extend term and allow additional lender funding

Residential mortgage 3 Extend maturity date —

Small business loans 9 Extend maturity date 3 Extend maturity date

Construction 3 Extend maturity date 2 Extend maturity date

Commercial, industrial & other finance receivables 2 Extend maturity date 5 Extend maturity date and allow additional funding

Leases 18 Extend maturity date —

Home equity lines and loans 1 Extend maturity date —

Residential mortgage 2 Extend maturity date 3 Extend maturity date

There were 52 and 26 modifications granted to borrowers experiencing financial difficulty for the year ended December 31, 2025 and December 31, 2024, respectively.

There were no loans that had a payment default that were modified in the 12 months before the years ended December 31, 2025 and December 31, 2024.

There were no commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the years ended December 31, 2024 and December 31, 2023.

There were $ 2.1 million and zero , in commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the years ended December 31, 2025 and December 31, 2024, respectively.

The increase period over period in assistance provided to borrowers experiencing financial difficulty was seen in small business loans, leases, and construction loans.

The primary factor for the financial difficulty generally comes from higher interest rates (small business loans) or higher rates for longer periods (which for construction, caused the borrower to go through their interest reserve quicker).

The following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of December 31, 2025 and 2024.

December 31, 2025

Current 30-59 days past due 60-89 days past due 90+ days past due and still accruing Nonaccrual loans and leases Total

(dollars in thousands)

Small business loans $ 1,556 $ — $ — $ — $ 4,083 $ 5,639

Construction 10,526 — — — 4,331 14,857

Commercial mortgage — 1,060 328 — — 1,388

Commercial, industrial & other finance receivables — 1,099 — — 850 1,949

Leases 271 — — — 606 877

Home equity lines and loans — — — — 456 456

Residential mortgage — — — — 905 905

Total $ 12,353 $ 2,159 $ 328 $ — $ 11,231 $ 26,071

December 31, 2024

Current 30-59 days past due 60-89 days past due 90+ days past due and still accruing Nonaccrual loans and leases Total

(dollars in thousands)

Small business loans $ 3,534 $ — $ — $ — $ 1,663 $ 5,197

Construction — — — — 1,856 1,856

Commercial, industrial & other finance receivables 3,156 — — — 2,792 5,948

Residential mortgage — — — — 546 546

Total $ 6,690 $ — $ — $ — $ 6,857 $ 13,547

(7) OREO and Other Repossessed Assets

Changes in the balance of OREO is summarized as follows:

(dollars in thousands) December 31,

2025 December 31,

OREO balance, beginning of year $ 159 $ —

Loans transferred to other real estate owned 3,592 159

Valuation allowance for losses — —

Sales ( 159 ) —

OREO balance, end of year $ 3,592 $ 159

During the year ended December 31, 2025, the Corporation foreclosed on four commercial loans and transferred the collateral property to OREO.

Additionally, during the year ended December 31, 2025, the Corporation sold a residential real estate property and recorded a gain of $ 15 thousand.

During the year ended December 31, 2024, the Corporation foreclosed on one residential real estate property and transferred the collateral property to OREO.

Additionally, during the year ended December 31, 2024, the Corporation sold a residential real estate property and recorded a gain of $ 317 thousand.

There were no valuation allowances against OREO for either period presented above.

Changes in the balance of repossessed assets are summarized as follows:

(dollars in thousands) December 31,

2025 December 31,

Repossessed asset balance, beginning of year $ 117 $ —

Loans & leases transferred to repossessed assets 2,357 117

Valuation allowance for losses — —

Sales ( 69 ) —

Repossessed asset balance, end of year $ 2,405 $ 117

Total OREO and other repossessed assets $ 5,997 $ 276

During the year ended December 31, 2025, the Corporation repossessed a billboard asset from a commercial loan relationship, as well as equipment from lease relationships, and reclassified into other repossessed assets.

Additionally, during the year ended December 31, 2025, the Corporation sold approximately $ 69 thousand in repossessed equipment that had previously been used as collateral on leases.

During the year ended December 31, 2024, the Corporation repossessed equipment from lease relationships and reclassified into other repossessed assets.

There were no valuation allowances against repossessed assets for either period presented above.

(8) Bank Premises and Equipment

21 unchanged sentences

Total $ 2,158,128 $ 2,005,368

Included in time deposits as of December 31, 2024, and 2023, are $ 500.4 million and $ 429.9 million of brokered deposits, respectively.

Included in time deposits as of December 31, 2025, and 2024, are $ 484.3 million and $ 500.4 million of brokered time deposits, respectively.

The aggregate amount of time deposits in denominations over $250 thousand were $ 522.7 million and $ 545.7 million as of December 31, 2025 and 2024, respectively.

18 unchanged sentences

FHLB Open Repo Plus Weekly 6/15/2026 3.93 % $ 89,999 $ 75,205

FRB BTFP Advances 3/29/2024 4.76 % — 33,000

ACBB Holding Company Revolving LOC 6/25/2025 7.75 % 5,000 —

FHLB Mid-term Repo Fixed 7/14/2026 4.57 % 15,245 —

ACBB Holding Company Revolving LOC 7/24/2026 7.00 % 1,500 5,000

FHLB Mid-term Repo Fixed 10/14/2025 5.16 % — 9,492

8 unchanged sentences

FHLB Mid-term Repo Fixed 7/14/2026 4.57 % — 15,245

FHLB Mid-term Repo Fixed 7/14/2026 4.57 % 15,245 15,245

FHLB Mid-term Repo Fixed 10/14/2025 5.16 % — 9,492

Total Long-Term Borrowings $ 10,594 $ 25,839

5 unchanged sentences

The following table presents subordinated debentures at the dates indicated:

(dollars in thousands) Maturity

date Interest

5 unchanged sentences

2011 Debentures 12/31/2026 6.00 % 219 231

2011 Debentures 12/31/2026 6.00 % 231 347

Debt Origination Costs ( 504 ) ( 626 )

2 unchanged sentences

Interest accrued at a fixed rate of 5.38 % on the 2019 Debentures from the date of issuance up to and including December 30, 2024.

As of the December 31, 2024, the 2019 Debentures converted to a floating rate instrument resetting quarterly at 395 basis points over the 30 day term SOFR.

Starting on December

31, 2024, the 2019 Debentures converted to a floating rate instrument resetting quarterly at 395 basis points over the 30 day term SOFR.

Interest is paid semi-annually on the 2023 and 2019 Debentures, and paid quarterly on the 2013 and 2011 debentures.

12 unchanged sentences

Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the MSR.

During the year ended December 31, 2024, the Corporation sold approximately $ 6.6 million of residential mortgage loan servicing rights associated with $ 777.2 million of serviced loans.

The Corporation received $ 10.1 million for the sale, and will receive a final payment of approximately $ 534 thousand up to one year from the date of the sale, or after all transfer conditions have been satisfied.

During the year ended December 31, 2025, the Corporation sold approximately $ 979 thousand of residential mortgage loan servicing rights associated with $ 110.2 million of serviced loans, while for the year ended 2024 approximately $ 6.6 million of residential mortgage loan servicing rights associated with $ 777.2 million of serviced loans were sold.

The Corporation has $ 10.3 million of residential mortgage loans being serviced as of December 31, 2025 compared to $ 121.8 million as of December 31, 2024.

During the year ended December 31, 2024 the Corporation recognized servicing fee income of $ 2.0 million compared to $ 2.5 million, during the year ended December 31, 2023.

During the year ended December 31, 2025 the Corporation recognized servicing fee income of $ 108 thousand compared to $ 2.0 million, during the year ended December 31, 2024.

Changes in the MSR balance are summarized as follows:

4 unchanged sentences

Sale of servicing rights ( 979 ) ( 6,458 )

Change in valuation allowance — 2

Balance at end of the period $ 86 $ 1,124

69 unchanged sentences

As of December 31, 2025, the Corporation’s ROU assets and related lease liabilities were $ 10.4 million and $ 10.7 million, respectively.

As of December 31, 2023 and the Corporation’s ROU assets and related lease liabilities were $ 9.4 million and $ 9.4 million, respectively.

The decrease year over year was due to the termination of the Blue Bell lease.

As of December 31, 2024, the Corporation’s ROU assets and related lease liabilities were $ 6.9 million and $ 7.0 million, respectively.

These amounts are included within other assets and other liabilities , respectively.

3 unchanged sentences

Short term lease expense 35 —

Variable lease expense — 52

Total lease expense $ 1,775 $ 3,031

Operating lease expense increased $ 1.0 million, net, due to fees, credits and other disposal costs for the early termination of the Blue Bell lease.

Operating lease expense decreased $ 1.4 million, net, due to fees, credits and other disposal costs for the early termination of the Blue Bell lease.

Supplemental cash flow information related to leases was as follows:

19 unchanged sentences

A total of 1,513,000 stock options and 91,776 shares of restricted stock have been granted under the 2016 Plan through December 31, 2025.

As of December 31, 2024 there were 344,480 stock awards remaining to be issued.

As of December 31, 2025 there were 208,980 stock awards remaining to be issued after adjusting for 139,956 options previously forfeited and available for future grant.

Options granted under the 2016 Plan to directors are nonqualified options, while options granted to officers and other employees are incentive stock options, and are subject to the limitations under Section 422 of the Internal Revenue Code.

23 unchanged sentences

dividend yield of 3.6 %, risk-free interest rate of 3.90 %, expected life of 5.75 years, and volatility of 33.4 % based on an average of the Corporation’s share price since going public.

The weighted average fair value of options granted in 2024 was $ 6.36 to per share.

The weighted average fair value of options granted in 2025 was $ 6.60 per share.

The fair value of each option granted in 2024 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

dividend yield of 3.6 %, risk-free interest rate of 4.36 %, expected life of 5.75 years, and volatility of 33.1 % based on an average of the Corporation’s share price since going public.

The weighted average fair value of options granted in 2023 was $ 2.37 to per share.

The weighted average fair value of options granted in 2024 was $ 6.36 per share.

Total stock option compensation cost for the years ended December 31, 2025 and 2024 was $ 596 thousand and $ 456 thousand, respectively.

3 unchanged sentences

For purposes of the determination of stock-based compensation expense for the years ended December 31, 2025, and 2024, we recognized the forfeiture of 12,250 , and 29,550 of shares of stock options that were previously granted to officers and other employees, respectively.

As of December 31, 2024, there was $ 1.2 million of unrecognized compensation cost related to nonvested stock options.

As of December 31, 2025, there was $ 1.2 million of unrecognized compensation cost related to issued but nonvested stock options.

This cost will be recognized over a weighted average period of 6.2 years.

During 2025, the intrinsic value of options exercised was $ 627 thousand.

Restricted Stock

The restricted stock awards granted under the 2016 Plan vest according to each award’s specific vesting schedule.

There were 5,360 awards granted in 2024, while no awards were granted in 2023.

All awards granted in 2024 vest 100 % one year from the grant date.

The grant date fair value of the restricted stock is based on the closing price on the date prior to the grant.

Shares Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023 — $ —

Granted 5,360 8.73

Outstanding / nonvested at December 31, 2024 5,360 $ 8.73

Compensation expense for restricted stock is measured based on the market price of the stock on the day prior to the grant date and is recognized on a straight-line basis over the vesting period.

For the year ended December 31, 2024, the Corporation recognized $ 47 thousand of expense related to the restricted stock.

As of December 31, 2024 there was $ 0 in unrecognized compensation costs related to restricted stock.

(15) Income Taxes

The following table presents the components of federal and state income tax expense for the periods indicated.

The Corporation did not have any foreign operations.

(dollars in thousands) December 31,

2025 December 31,

Current $ 5,551 $ 3,594

Deferred ( 725 ) ( 217 )

Total federal income tax expense $ 4,826 $ 3,377

Current $ 688 $ 364

Deferred ( 74 ) ( 17 )

Total state income tax expense $ 614 $ 347

Current Expense

$ 6,042 $ 5,551

Total current income tax expense

$ 6,939 $ 6,239

Deferred Expense

$ ( 330 ) $ ( 725 )

( 43 ) ( 74 )

Total deferred income tax expense

$ ( 373 ) $ ( 799 )

Total income tax expense $ 6,566 $ 5,440

3 unchanged sentences

State tax expense, net of federal benefit (1)

Tax exempt interest ( 11 ) ( 0.1 ) ( 219 ) ( 1.3 )

675 2.4 485 2.2

Tax credits, net of amortization

( 548 ) ( 1.9 ) ( 164 ) ( 0.8 )

Nontaxable or nondeductible items

Tax exempt interest, net

76 0.3 ( 11 ) ( 0.1 )

Bank owned life insurance

46 0.2 ( 182 ) ( 0.8 )

Stock based compensation

ESOP 23 0.1 26 0.2

34 0.1 70 0.3

38 0.1 23 0.1

Prior year return to provision adjustment 195 0.7 490 2.3

1 unchanged sentence

Effective income tax rate $ 6,566 23.1 % $ 5,440 25.0 %

(1) State taxes in Maryland and Delaware made up the majority (greater than 50%) of the tax effect in this category for both periods presented.

The components of the net deferred tax asset at December 31, 2025 and 2024 are as follows:

3 unchanged sentences

Allowance for credit losses $ 4,920 $ 4,179

Accrued incentive compensation

Accrued retirement 1,196 948

Unrealized gain on available for sale securities 2,387 2,718

Unrealized loss on available for sale securities

Unrealized loss on derivatives

Mortgage pipeline fair-value adjustment 324 541

7 unchanged sentences

Intangibles ( 201 ) ( 154 )

(dollars in thousands) December 31,

2024 December 31,

Loan servicing rights ( 897 ) ( 993 )

6 unchanged sentences

The effective tax rates for the twelve-month periods ended December 31, 2025 and 2024 were 23.1 % and 25.0 % respectively.

The increase in rate between 2023 and 2024 was primarily related to the impact of additional nondeductible stock compensation expense in 2024 partially offset by an increase in tax-free bank owned life insurance income.

The decrease in rate between 2024 and 2025 was primarily related to the impact of solar related tax credits purchased at the end of 2025, partially offset by the tax impact of a surrender of certain bank owned life insurance policies.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

4 unchanged sentences

As of December 31, 2024, the Corporation had an investment in low-income housing tax credits of $ 4.6 million on which it recognized tax credits of $ 415 thousand, amortization of $ 448 thousand and tax benefits from losses of $ 99 thousand during the year ended December 31, 2024.

The tax benefits are included within other in the statutory rate reconciliation above.

(16) Transactions with Executive Officers, Directors and Principal Stockholders

4 unchanged sentences

Repayments from related parties ( 828 ) ( 167 )

Effect of changes in composition of related parties — ( 499 )

Loans receivable from related parties - balance at end of period $ 1,972 $ 1,518

Deposits of related parties totaled $ 40.9 million and $ 36.5 million at December 31, 2025 and 2024, respectively.

Subordinated debt held by related parties totaled $ 844 thousand and $ 1.1 million at December 31, 2024 and 2023, respectively.

Subordinated debt held by related parties totaled $ 844 thousand and $ 844 thousand at December 31, 2025 and 2024, respectively.

(17) Financial Instruments with Off-Balance Sheet Risk, Commitments and Contingencies

11 unchanged sentences

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Corporation evaluates each customer’s credit worthiness on a case-by-case basis.

The Corporation evaluates each customer’s credit worthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation.

6 unchanged sentences

Loans sold under FHA or investor programs are subject to indemnification or repurchase if they fail to meet the origination criteria of those programs or if the loan is two or three months delinquent during a set period that usually varies from the first six months to a year after the loan is sold.

There was 4 indemnifications signed for the year ended December 31, 2024 for $ 1.2 million, and 3 indemnification signed for the year ended December 31, 2023 for $ 860 thousand.

There was 6 indemnifications signed for the year ended December 31, 2025 for $ 1.3 million, and 4 indemnification signed for the year ended December 31, 2024 for $ 1.2 million.

A repurchase reserve of $ 510 thousand was recorded at December 31, 2025, as compared to $ 500 thousand as of December 31, 2024.

There were 5 loans repurchased for the year ended December 31, 2024 with a total unpaid principal balance of $ 1.1 million, as compared to 5 loans repurchased for the year ended December 31, 2023 with an unpaid principal balance of $ 1.3 million.

There was 2 loan repurchased for the year ended December 31, 2025 with a total unpaid principal balance of $ 720 thousand, as compared to 5 loans repurchased for the year ended December 31, 2024 with an unpaid principal balance of $ 1.1 million.

(18) Regulatory Matters

44 unchanged sentences

The fair value of securities available-for-sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

The fair value of certain other securities available-for-sale (carried at fair value) are based on quoted prices obtained from dealers or brokers in active over-the-counter markets (Level 1).

Mortgage Loans Held for Sale

16 unchanged sentences

Treasuries 16,206 16,206 — —

December 31, 2024

(dollars in thousands) Total Level 1 Level 2 Level 3

government agency CMO 8,606 — 8,606 —

4 unchanged sentences

Interest rate lock commitments 402 — — 402

Forward commitments 30 — 30 —

Customer derivatives - interest rate swaps 1,909 — 1,909 —

Fair Value Hedge 21 — 21 —

Interest rate swaps 9 — 9 —

Total $ 246,112 $ 16,206 $ 229,504 $ 402

Interest rate lock commitments $ 13 $ — $ — $ 13

Forward commitments 32 — — 32

Customer derivatives - interest rate swaps 1,929 — 1,929 —

Risk Participation Agreements 91 — 91 —

Customer derivatives - Risk Participation Agreements

Interest rate swaps 281 — 281 —

14 unchanged sentences

Interest rate lock commitments 216 — — 216

Forward commitments 30 — 30 —

Customer derivatives - interest rate swaps 2,755 — 2,755 —

Fair Value Hedge 3 — 3 —

Interest rate swaps 9 — 9 —

Total $ 226,317 $ 15,450 $ 210,651 $ 216

Interest rate lock commitments $ 35 $ — $ — $ 35

Forward commitments 41 — 41 —

Customer derivatives - interest rate swaps 2,745 — 2,745 —

Risk Participation Agreements 11 — 11 —

Customer derivatives - Risk Participation Agreements 91 — 91 —

Interest rate swaps 61 — 61 —

Total $ 2,932 $ — $ 2,897 $ 35

4 unchanged sentences

SBA loan servicing rights 3,846 3,258

OREO and other repossessed assets

Individually evaluated loans (1)

Commercial and industrial — 1,944

Construction 4,430 —

Small business loans 3,745 2,284

2 unchanged sentences

The following table details the valuation techniques for Level 3 collateral dependent loans.

(dollars in thousands) Fair Value Valuation Technique Significant Unobservable Input Range of Inputs

December 31, 2024 $ 4,228 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2 %- 33 % discount

December 31, 2023 12,952 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2 %- 33 % discount

(dollars in thousands) December 31, 2025

Financial Instrument Fair Value Valuation Technique Unobservable Input Range of Inputs Weighted Average

OREO and other repossessed assets $ 5,997 Appraisal of collateral Costs to sell 6 % - 13 % discount

Individually evaluated loans 8,175 Appraisal of collateral Costs to sell 2 %- 48 % discount

(dollars in thousands) December 31, 2024

Financial Instrument Fair Value Valuation Technique Unobservable Input Range of Inputs Weighted Average

OREO and other repossessed assets $ 276 Appraisal of collateral Costs to sell NM NM

Individually evaluated loans 4,228 Appraisal of collateral Costs to sell 2 %- 33 % discount

Below is management’s estimate of the fair value of all financial instruments, whether carried at cost or fair value on the Corporation’s balance sheet.

14 unchanged sentences

The Corporation reviews the servicing rights portfolios on a quarterly basis for impairment.

Other Real Estate Owned

Other real estate owned (“OREO”) consists of loan collateral which has been repossessed through foreclosure or other measures.

Initially, foreclosed assets are recorded at the fair value of the collateral less estimated selling costs.

Subsequent to foreclosure, valuations are updated periodically and the assets may be marked down further, reflecting a new cost basis.

The fair value of OREO was estimated using Level 3 inputs based on appraisals, letters of intent or agreement of sale received from third parties.

Repossessed Assets

Repossessed assets represents non-real estate assets that the Corporation has acquired by taking possession of the asset that collateralized a loan or lease.

The Corporation reports repossessed assets at the fair value less cost to sell, adjusted periodically based on a current appraisal provided by a third party based on their assumptions and quoted market prices for similar assets, when available.

Write-downs and any gain or loss upon the sale of repossessed assets is recorded in other noninterest income.

The fair value of repossessed assets was estimated using Level 3 inputs based on appraisals, letters of intent or agreement of sale received from third parties.

Individually Evaluated Loans

35 unchanged sentences

Mortgage loans held for sale Level 2 33,762 33,762 32,413 32,413

Loans receivable, net of ACL Level 3 2,015,936 1,967,986 1,882,080 1,832,558

Loans and other finance receivables, net of ACL Level 3 2,134,630 2,108,242 1,997,498 1,967,986

Mortgage loans held for investment Level 2 14,396 14,396 14,501 14,501

9 unchanged sentences

The following table details the valuation techniques for Level 3 interest rate lock commitments.

(dollars in thousands) Fair Value Valuation Technique Significant Unobservable Input Range of Inputs Weighted Average

(dollars in thousands) Fair Value Valuation Technique Unobservable Input Range of Inputs Weighted Average

December 31, 2025 $ 402 Market comparable pricing Pull through 1 % - 99 %

14 unchanged sentences

The Corporation performed an assessment of the hedge for effectiveness at the inception of the hedge and performs an assessment on a recurring basis and determined that the derivative currently is and is expected to be highly effective in offsetting changes in cash flows of the hedged item.

For the years ended December 31, 2024 and 2023, $ 431 thousand and $( 412 ) thousand, net of tax, are recorded in total comprehensive income as unrealized gains and unrealized losses, respectively.

For the years ended December 31, 2025 and 2024, $ 167 thousand and $ 431 thousand, net of tax, are recorded in total comprehensive income as unrealized losses and unrealized gains, respectively.

This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to December 31, 2025.

4 unchanged sentences

For the year ended December 31, 2024, approximately $ 3 thousand, net of tax, is recorded as fair value adjustments.

For the years ended December 31, 2025 and 2024, approximately $ 18 thousand and $ 3 thousand, respectively and net of tax, is recorded as fair value adjustments.

These amounts could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to December 31, 2025.

2 unchanged sentences

In addition, the Corporation may enter into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale.

Forward sales commitments may also be in the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date.

Forward sales commitments may also be in

the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date.

The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured.

41 unchanged sentences

Customer Derivatives - Risk Participation Agreements 257 ( 51 )

Fair Value Hedge 3 —

Interest Rate Swaps 487 ( 539 )

Net fair value gains (losses) on derivative financial instruments $ 491 $ ( 448 )

Net change in the fair value of derivative instruments $ 373 $ 30

Net realized activity on derivative hedging activities were losses of $ 151 thousand and gains of $ 87 thousand for the years ended December 31, 2025 and 2024, respectively, and are included in non-interest income in the consolidated statements of income.

5 unchanged sentences

All operations are domestic.

Our Banking segment (“Bank”) consists of commercial and retail banking.

Segment income (loss) before income taxes is used to assess the performance of the banking segment by monitoring the margin between interest income and interest expense.

Our Banking segment (“Bank”) consists of commercial and consumer banking.

Segment income before income taxes is used to assess the performance of the banking segment by monitoring the margin between interest income and interest expense.

The Banking segment generates interest income from its lending and investing activities and is dependent on the gathering of deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income.

2 unchanged sentences

Meridian Wealth (“Wealth”), a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future.

Segment income (loss) before income taxes is used to assess the performance of the wealth segment by monitoring the generation of wealth management income as the wealth segment generates non-interest income through advisory fees.

Segment income before income taxes is used to assess the performance of the wealth segment by monitoring the generation of wealth management income as the wealth segment generates non-interest income through advisory fees.

The cost of marketing, business development, and payroll provide the significant expenses in wealth.

Meridian’s mortgage banking segment (“Mortgage”) consists of 7 loan production offices throughout suburban Philadelphia and Maryland.

Segment income (loss) before income taxes is used to assess the performance of the mortgage banking segment by

monitoring the gains received on loan sales.

Segment income before income taxes is used to assess the performance of the mortgage banking segment by monitoring the gains received on loan sales.

The Mortgage segment originates 1 – 4 family residential mortgages and sells nearly all of its production to third party investors.

18 unchanged sentences

Gain on sale of MSRs 20 — 383 403 — — 3,992 3,992

Gain on sale of OREO 317 — — 317 — — — —

Net loss on sale of loans ( 434 ) — — ( 434 ) 15 — — 15

Net change in fair values 228 — 1,114 1,342 ( 23 ) — 242 219

11 unchanged sentences

Non-interest expense 57,287 4,155 21,862 83,304 51,584 3,506 24,059 79,149

Income (loss) before income taxes $ 15,298 $ 2,375 $ 4,113 $ 21,786 $ 20,936 $ 1,240 $ ( 5,209 ) $ 16,967

Income before income taxes $ 24,988 $ 2,337 $ 1,077 $ 28,402 $ 15,298 $ 2,375 $ 4,113 $ 21,786

Total Assets $ 2,484,836 $ 13,059 $ 64,100 $ 2,561,995 $ 2,337,092 $ 10,893 $ 37,882 $ 2,385,867

31 unchanged sentences

Dividends from Bank $ 10,164 $ 6,404

Interest income — 2

Other income 163 494

13 unchanged sentences

Net Income $ 21,836 $ 16,346

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Equity in undistributed income of subsidiaries ( 16,100 ) ( 12,753 )

1 unchanged sentence

Amortization of issuance costs on subordinated debt 123 123

Increase in accrued interest payable 100 214

Increase (decrease) in accrued interest payable

Other, net 740 ( 4,262 )

4 unchanged sentences

Cash flows from financing activities:

Increase in short-term borrowings 5,000 —

Net activity from subordinated debt issuance — 9,699

Net purchase of treasury stock — ( 4,258 )

Increase (decrease) in short-term borrowings ( 3,500 ) 5,000

Dividends paid ( 5,673 ) ( 5,601 )

Shares purchased for ESOP plan ( 425 ) —

Share based awards and exercises 885 499

Proceeds from issuance of common stock

Net cash (used in) provided by financing activities ( 1,194 ) ( 102 )

4 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 8. Financial Statements and Supplementary Data