Meridian Corporation Reports Fourth Quarter 2025 Results and Announces a Quarterly Dividend of $0.14 per Common Share

MALVERN, Pa., Jan. 29, 2026 (GLOBE NEWSWIRE) -- Meridian Corporation (Nasdaq: MRBK) today reported:

• Net income for the quarter ended December 31, 2025 was $7.2 million, or $0.61 per diluted share, up $527 thousand, or 8%, from prior quarter.
  
  

• Pre-provision net revenue¹ for the quarter was $12.6 million, an improvement of $1.4 million, or 13%. from Q4'2024.
  
  

• Net interest margin was 3.77% for the fourth quarter of 2025, while the loan yield declined to 7.15%, and cost of funds declined to 3.23% from the prior quarter.
  
  

• Return on average assets and return on average equity for the fourth quarter of 2025 were 1.10% and 14.79%, respectively.
  
  

• Total assets at December 31, 2025 were $2.6 billion, compared to $2.5 billion at September 30, 2025 and $2.4 billion at December 31, 2024.
  
  

• Commercial loans, excluding leases, increased $35.2 million, or 2% from prior quarter.
  
  

• On January 29, 2026, the Board of Directors declared a quarterly cash dividend of $0.14 per common share, payable February 17, 2026 to shareholders of record as of February 9, 2026. This is an increase of $0.015 or 12%, compared to the quarterly cash dividend of $0.125 per common share declared in the prior quarter.
  
  

Christopher J. Annas, Chairman and CEO commented:

"Meridian's fourth quarter earnings grew 7.9% over the prior quarter, to $7.2 million. Annual earnings grew 33.6% over 2024 to $21.8 million. Year-over-year growth of our core commercial, industrial, and real estate loan portfolios equaled 10.7%, driven mostly through new and existing loan relationships, and despite SBA loan sales and a $25 million residential mortgage sale to reallocate to commercial. The exceptional loan growth has been sustainable over the years due to targeted lending hires, training new candidates and devising new ways to capitalize on market disruption.

The net interest margin has improved throughout 2025 mostly from lower deposit rates. We have benefited from lower core deposit rates to our commercial business because of pricing elasticity, but also from excellent management of our brokered deposit stack, which is similar in proportion to traditional branch banks’ CDs. Expenses were relatively flat from prior quarter, and up just 5.2% year over year. Although we are currently facing higher levels of nonperforming loans and leases, we are seeing slow progress as recoveries are improving and assets are migrating to our possession and ultimate disposition.

Our wealth management segment produced annual pre-tax income of $2.3 million, as assets under management grew 7.8%. We hired three new wealth advisors over the year, and also benefitted from stock market gains in client portfolios that expanded the AUM. We are investing in the wealth group as we see more opportunity, and we closely track our commercial customers’ liquidity events to pursue these assets. The mortgage segment earned pre-tax income of $1.1 million, with mortgage revenue down about $260 thousand or 1.3% from the prior year. The business has suffered from lack of homes for sale, that only saw some rebounding at end of year. We further streamlined the business in 2025 to assure profitability, and are optimistic about our 2026 origination goals.

Meridian's consistent organic growth, year over year, for the past 22 years has been defined by being opportunistic during times of turmoil. A series of acquisitions in our market during 2025 has positioned us to take advantage of customer and employee turmoil. Through our brand and strategic marketing efforts we expect to leverage this strength to our benefit in 2026."

Select Condensed Financial Information

Income Statement - Fourth Quarter 2025 Compared to Third Quarter 2025

Fourth quarter net income increased $527 thousand, or 7.9%, to $7.2 million due largely to an increase in net interest income of $511 thousand and an increase in non-interest income of $662 thousand, The provision for credit losses increased $437 thousand and non-interest expense was relatively flat over prior quarter. Income tax expense was up $97 thousand. Detailed explanations of the major categories of income and expense follow below.

Net Interest income

The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the periods indicated and allocated by rate and volume. Changes in interest income and/or expense related to changes attributable to both volume and rate have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.

Interest income decreased $286 thousand quarter-over-quarter on a tax equivalent basis, driven by lower yields largely offset by increased average balances of interest earning assets. The yield on interest-earnings assets decreased 19 basis points and negatively impacted interest income by $1.3 million, while the average balance of interest earning assets increased by $52.7 million, and contributed $966 thousand to interest income which helped to lessen the overall decrease.

Average total loans, excluding residential loans for sale, increased $54.0 million. The largest drivers of this increase were construction, commercial real estate, and commercial loans which on a combined basis increased $55.3 million on average, partially offset by a decrease in average leases of $6.9 million. Home equity, residential real estate, consumer and other loans held in portfolio increased on a combined basis $5.5 million on average.

Interest expense decreased $794 thousand, quarter-over-quarter, due to a decline in the cost of deposits and borrowings, partially offset by a higher volume of total interest-bearing deposits and borrowings. Interest expense on total deposits decreased $836 thousand, interest expense on borrowings increased $73 thousand, and interest expense on subordinated debentures decreased by $31 thousand as well. During the period, interest-bearing checking accounts decreased $20.4 million, time deposits decreased $7.4 million, while money market and savings deposit balances increased $54.1 million on average. Borrowings increased $9.9 million on average. On a rate basis, money market accounts and time deposits experienced a decrease in the cost, with the overall cost of deposits declined 19 basis points.

Overall the net interest margin remained at 3.77%, consistent with the prior quarter, as the decline in cost of funds offset the decline in yield on earning assets.

Provision for Credit Losses

The overall provision for credit losses for the fourth quarter increased $437 thousand to $3.3 million, from $2.9 million in the third quarter. The higher level of provisioning was largely due to a $1.6 million increase in net charge-offs, combined with the impact of an upgrade to the third-party macroeconomic forecast model used to estimate credit losses on the loan portfolio, partially offset by a decline in baseline loss rates utilized for several loan portfolio segments. The model upgrade was based on assessing the 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

The following table presents the components of non-interest income for the periods indicated:

Total non-interest income increased $662 thousand, or 6.7%, quarter-over-quarter largely due to the increase in gains of $405 thousand on the sales of investment securities, $187 thousand in favorable fair value changes, $144 thousand in gains from hedging activities, $206 thousand increase in fee income from title and other services as well as an increase of $69 thousand in wealth management income, and a $66 thousand decline in the net loss on sale of loans. These improvements were partially offset by a $146 thousand decline in SBA loan income, and a $200 thousand decrease in mortgage banking income. Mortgage loan sales increased $1.0 million, or 0.5%, quarter-over-quarter. Despite this increase in overall sales, margin decreased 11 basis points resulting in a lower level of mortgage banking income.

SBA loan income decreased $146 thousand as the volume of SBA loans sold was down $4.5 million to $20.8 million, for the quarter-ended December 31, 2025 compared to the quarter-ended September 30, 2025, while the gross margin on SBA sales was 7.4% for both quarter ends.

Non-interest expense

The following table presents the components of non-interest expense for the periods indicated:

Overall salaries and benefits decreased $510 thousand, largely attributable to the variable nature of the mortgage segment along with timing of certain incentive expense. Occupancy increased $219 thousand due to the relocation two offices including the opening of the full service branch in Florida. Data processing and software expense increased $116 thousand due to an increase in customer transaction volume, while advertising and promotion expenses increased $67 thousand as the level of business development activities and special events increased at the end of the year. Other expense increased $266 thousand from an increase in OREO expense as collateral on a land development loan was repossessed and reclassified into OREO during the quarter-ended December 31, 2025, offset by a decline in other loan related expenses.

Balance Sheet - December 31, 2025 Compared to September 30, 2025

Total assets increased $19.3 million, or 0.8%, to $2.6 billion as of December 31, 2025 from $2.5 billion as of September 30, 2025.

Portfolio loans grew $8.4 million, or 0.4% quarter-over-quarter. This growth was generated from commercial & industrial loans which increased $10.9 million, or 2.6%, construction loans increased $15.4 million, or 4.9%, and commercial mortgage loans increased $6.9 million, or 0.8%. The balance of residential mortgages decreased by $24.4 million, or 9.4%, as we sold a $24.5 million portion of this portfolio and are using the proceeds to fund higher yielding loans. Lease financings also decreased $4.3 million, or 8.6% from September 30, 2025, partially offsetting the above noted loan growth, but this decline was expected.

Total deposits increased $27.0 million, or 1.3% quarter-over-quarter, led by an increase of $21.2 million in interest-bearing deposits. Money market accounts and savings accounts increased a combined $27.2 million, non-interest bearing accounts increased $5.8 million or 2.4%, while interest bearing demand deposits increased $5.4 million. Overall borrowings decreased $19.9 million, or 14.5% quarter-over-quarter.

Total stockholders’ equity increased by $10.1 million from September 30, 2025, to $198.1 million as of December 31, 2025. Changes to equity for the quarter included net income of $7.2 million, a net increase of $7.5 million due to stock issuance under an ATM offering, an increase of $626 thousand in other comprehensive income, partially offset by dividends paid of $1.4 million. The Community Bank Leverage Ratio for the Bank was 9.51% at December 31, 2025.

Asset Quality Summary

Non-performing loans decreased $298 thousand, to $55.1 million at December 31, 2025 compared to $55.4 million at September 30, 2025, with decreases coming in land development, construction, and commercial non-performing loans, partially offset by an increase in non-performing SBA loans. Included in non-performing loans are $24.8 million of SBA loans of which $13.2 million, or 53%, are guaranteed by the SBA. The SBA portfolio was subject to the Fed's rapid rate increase and $13.5 million, or 54% of these non-performing loans originated in 2020-2021 when rates were lower by over 500 basis points. As a result of these changes in non-performing loans, the ratio of non-performing loans to total loans decreased 3 bps to 2.50% as of December 31, 2025, from 2.53% as of September 30, 2025. The ratio of non-performing loans to total loans, excluding the guaranteed portion of the SBA portfolio was 1.90%.

Net charge-offs increased to $3.5 million, or 0.16% of total average loans for the quarter ended December 31, 2025, compared to net charge-offs of $1.9 million, or 0.09%, for the quarter ended September 30, 2025. Fourth quarter charge-offs consisted of $1.6 million in SBA loans, $846 thousand in commercial loans, $807 thousand in finance receivables, and $561 thousand of small ticket equipment leases. Overall there were recoveries of $257 thousand, mainly related to leases.

The ratio of allowance for credit losses to total loans held for investment was 1.00% as of December 31, 2025, slightly down from 1.01% reported as of September 30, 2025, impacted by charge-offs for the quarter, combined with the impact on the ACL from the residential mortgage loan sale. As of December 31, 2025 there were specific reserves of $3.4 million against individually evaluated loans, a slight increase of $94 thousand from the level of specific reserves as of September 30, 2025.

About Meridian Corporation

Meridian Bank, the wholly owned subsidiary of Meridian Corporation, is an innovative community bank serving Pennsylvania, New Jersey, Delaware, Maryland, and Florida. Through its 17 offices, including banking branches and mortgage locations, Meridian offers a full suite of financial products and services. Meridian specializes in business and industrial lending, retail and commercial real estate lending, electronic payments, and wealth management solutions through Meridian Wealth Partners. Meridian also offers a broad menu of high-yield depository products supported by robust online and mobile access. For additional information, visit our website at www.meridianbanker.com. Member FDIC.

“Safe Harbor” Statement

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; the impact of uncertain or changing political conditions or any current or future federal government shutdown and uncertainty regarding the federal government's debt limit; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; legislation affecting the financial services industry as a whole, and Meridian Corporation, in particular; changes in accounting policies, practices or guidance; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. Meridian Corporation cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Meridian Corporation’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Meridian Corporation or by or on behalf of Meridian Bank.