Core Insights - Meridian and its providers are enhancing access to high-quality care for over 340,000 Medicaid members statewide through value-based partnerships [1] - This initiative has led to a significant 21% reduction in emergency room visits [1] Summary by Categories Access to Care - The initiative aims to increase access to high-quality care for over 340,000 Medicaid members [1] Value-Based Partnerships - The approach involves value-based partnerships that are central to improving healthcare delivery [1] Impact on Emergency Services - There has been a notable 21% reduction in emergency room visits as a result of these efforts [1]

Core Insights - Meridian Mining UK has reported significant high-grade Au-Cu-Ag & Zn mineralization at its Santa Helena project, with notable drill results indicating strong resource potential [3][4][6] - The company has also initiated exploration at the Santa Fé project, discovering gold mineralization in the Aguapei Formation, which opens new opportunities for gold exploration [4][5][6] Santa Helena Project - The ongoing resource delineation drill program at Santa Helena has yielded multiple high-grade intersections, including CD-727 with a 15.2m interval at 7.4g/t AuEq and 4.9% CuEq [4][10] - Other significant drill results include CD-749 with 6.1m at 10.5g/t AuEq (7.1% CuEq) and CD-742 with 7.6m at 6.9g/t AuEq (4.6% CuEq) [4][10] - The infill drilling program aims to enhance understanding of the mineralization's geometry and grade continuity, particularly in the western sectors of the deposit [7][11] Santa Fé Project - The first reconnaissance exploration program at Santa Fé has identified gold mineralization in the Aguapei Formation, indicating a large open hydrothermal system [4][6] - Channel sampling in the Aguapei Formation has returned gold values up to 1.5g/t Au, suggesting significant exploration potential in the region [4][13] Regional Exploration - Meridian is expanding its exploration efforts with drilling commenced at the Cigarra Cu-Au prospect, further enhancing the regional exploration strategy [5][19] - The company is also conducting gradient-assay induced polarization surveys to identify chargeability anomalies, which may indicate additional mineralization [16][18] Technical and Financial Overview - The Cabaçal project, which includes Santa Helena, has a pre-feasibility study indicating a base case after-tax NPV5 of USD 984 million and an IRR of 61.2% [29][30] - The Cabaçal Mineral Reserve estimate consists of 41.7 million tonnes at 0.63g/t gold, 0.44% copper, and 1.64g/t silver, supporting the project's economic viability [30]

Group 1 - Meridian Corporation (MRBK) has been performing exceptionally well in recent months, with a market capitalization of $173.5 million, indicating its status as a small player in the market [1] - The focus of Crude Value Insights is on cash flow and companies that generate it, highlighting the potential for value and growth in the oil and natural gas sector [1] Group 2 - Subscribers to Crude Value Insights benefit from a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [2] - A two-week free trial is available for new subscribers, promoting engagement with oil and gas investment opportunities [3]

Core Viewpoint - Meridian Mining UK S has announced key leadership changes and significant milestones in the development of the Cabaçal project, aiming for a decision to mine by 2027 [1][2][4]. Leadership Changes - Mr. David Halkyard has been appointed as Interim Chief Financial Officer (CFO) following the resignation of Ms. Soraia Morais, who served since 2020 [1][4]. - Mr. Vitor Hugo de Sousa Belo has transitioned to Chief Development Officer (CDO), overseeing the Cabaçal project development [1][5][6]. Cabaçal Project Progress - The Definitive Feasibility Study (DFS) drill program for the Cabaçal project has been completed, involving 591 holes drilled over 66,487 meters [7][8]. - The title transfer for the Cabaçal and Santa Helena projects to the Brazilian subsidiary, Rio Cabaçal Mineração Ltda, has been finalized, marking a significant milestone [2][9]. Financial and Technical Highlights - The Cabaçal project has a projected after-tax NPV5 of USD 984 million and an IRR of 61.2%, with a pre-production capital cost of USD 248 million [12]. - The project is expected to have a low All-in Sustaining Cost of USD 742 per ounce of gold equivalent, with a production profile of 141,000 ounces of gold equivalent over its life [12]. Mineral Reserve Estimates - The Cabaçal Mineral Reserve consists of Proven and Probable reserves of 41.7 million tonnes at grades of 0.63g/t gold, 0.44% copper, and 1.64g/t silver [13].

Core Insights - Meridian has entered into a definitive agreement to divest its Flooring Adhesives Division to Avery Dennison, which will integrate the brands into its Materials Group business, aiming for accelerated innovation and expanded reach [1][2][3] Company Overview - Meridian Adhesives Group is a leading manufacturer of high-performance adhesives, providing solutions across various markets including electronics, product assembly, infrastructure, packaging, and flooring [3] - Avery Dennison Corporation is a global leader in materials science and digital identification solutions, reported sales of $8.8 billion in 2024, and employs approximately 35,000 employees in over 50 countries [4]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1 Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20Financial%20Statements%20(Unaudited)) Unaudited Q2 2025 financials show total assets at $2.51 billion and net income at $5.6 million, driven by loan growth [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets grew to $2.51 billion and Q2 2025 net income rose to $5.6 million, driven by loan growth Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,510,938** | **$2,385,867** | | Loans and other finance receivables, net | $2,087,399 | $2,011,999 | | Total Deposits | $2,110,374 | $2,005,368 | | **Total Liabilities** | **$2,332,918** | **$2,214,345** | | **Total Stockholders' Equity** | **$178,020** | **$171,522** | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $21,159 | $16,846 | $40,935 | $33,455 | | Provision for credit losses | $3,803 | $2,680 | $9,015 | $5,546 | | **Net Income** | **$5,592** | **$3,326** | **$7,991** | **$6,002** | | Diluted EPS | $0.49 | $0.30 | $0.70 | $0.54 | Consolidated Cash Flow Highlights - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $6,072 | $(20,915) | | Net cash used in investing activities | $(100,549) | $(113,333) | | Net cash provided by financing activities | $117,189 | $101,609 | | **Net change in cash and cash equivalents** | **$22,712** | **$(32,639)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, financial instruments, and segment performance, with loan portfolio at $2.1 billion and ACL at $20.9 million - The investment portfolio's temporary impairment is primarily due to market interest rate changes, and the Corporation does not anticipate needing to sell these securities before recovery, thus **no Allowance for Credit Losses (ACL) was deemed warranted**[37](index=37&type=chunk) Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial mortgage | $855,465 | $823,976 | | Construction | $285,231 | $259,553 | | Commercial and industrial | $404,011 | $367,366 | | Small business loans | $144,655 | $155,775 | | Leases, net | $57,822 | $75,987 | | Other | $357,250 | $343,635 | | **Total Loans** | **$2,104,434** | **$2,026,292** | Allowance for Credit Losses (ACL) Roll-Forward - Six Months Ended June 30, 2025 (in thousands) | | Amount | | :--- | :--- | | Beginning Balance (Jan 1, 2025) | $18,438 | | Charge-offs | $(6,987) | | Recoveries | $555 | | Provision for credit losses | $8,845 | | **Ending Balance (June 30, 2025)** | **$20,851** | - The company sold approximately **$979 thousand** of residential mortgage loan servicing rights (MSRs) associated with **$110.2 million** of serviced loans during the first six months of 2025, **significantly reducing its MSR asset balance**[85](index=85&type=chunk) Segment Income Before Taxes (in thousands) | Segment | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Bank | $5,202 | $3,171 | $8,848 | $6,711 | | Wealth | $604 | $676 | $1,332 | $1,154 | | Mortgage | $1,481 | $545 | $252 | $80 | | **Total** | **$7,287** | **$4,392** | **$10,432** | **$7,945** | [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights significant improvements in Q2 2025 financial performance, driven by increased net interest income [Executive Overview](index=38&type=section&id=Executive%20Overview) Executive overview summarizes H1 2025 financial achievements, including total assets growth to $2.5 billion and Q2 net income of $5.6 million - Key financial highlights for the first six months of 2025 compared to year-end 2024 include: - Total assets increased by **$125.1 million** (**5.2%**) to **$2.5 billion** - Portfolio loans grew by **$78.1 million** (**3.9%**) to **$2.1 billion** - Total deposits increased by **$105.0 million** (**5.2%**) to **$2.1 billion**[146](index=146&type=chunk) - Operational performance for Q2 2025 compared to Q2 2024 showed strong improvement: - Net income increased by **$2.3 million** (**68.1%**) to **$5.6 million** - Net interest income grew by **$4.3 million** (**25.6%**) to **$21.2 million** - Net interest margin expanded to **3.54%** from **3.06%**[146](index=146&type=chunk) [Net Interest Income](index=40&type=section&id=Net%20Interest%20Income) Net interest income significantly increased in H1 2025 due to favorable rate and volume changes, expanding net interest margin to 3.54% Net Interest Margin Analysis | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Yield on Interest-Earning Assets | 6.89% | 6.98% | 6.86% | 6.94% | | Cost of Interest-Bearing Liabilities | 3.96% | 4.60% | 3.98% | 4.55% | | Net Interest Spread | 2.93% | 2.38% | 2.88% | 2.39% | | **Net Interest Margin** | **3.54%** | **3.06%** | **3.50%** | **3.08%** | - For Q2 2025 vs Q2 2024, the **$4.3 million** increase in net interest income was driven by a **$2.5 million** positive impact from rate changes and a **$1.8 million** positive impact from volume changes, with the primary driver being a **significant decrease in interest expense on deposits due to lower rates**[158](index=158&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) [Asset Quality and Balance Sheet](index=43&type=section&id=Asset%20Quality%20and%20Balance%20Sheet) Balance sheet grew to $2.5 billion, fueled by loan growth, while asset quality slightly weakened with non-performing assets rising to 2.14% - The provision for credit losses increased by **$1.1 million** in Q2 2025 and **$3.5 million** in the first six months of 2025 compared to the prior year periods, driven by provisioning for loan growth, charge-offs, and adjustments for macro-economic uncertainty[168](index=168&type=chunk)[169](index=169&type=chunk) Non-Performing Assets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total nonaccrual loans and leases | $50,534 | $45,125 | | Other real estate owned (OREO) | $719 | $159 | | Repossessed assets | $2,429 | $117 | | **Total non-performing assets** | **$53,682** | **$45,401** | | Non-performing assets to total assets | 2.14% | 1.90% | - The increase in non-performing loans to **$50.5 million** was primarily due to risk rating downgrades in the SBA and residential mortgage portfolios, partially offset by a **$4.7 million** decline in non-performing commercial loans following foreclosures[187](index=187&type=chunk) - Total deposits grew by **$105.0 million** (**5.2%**) since year-end 2024, with a notable shift from noninterest-bearing deposits (down **$3.8 million**) to interest-bearing deposits (up **$108.8 million**) as customers sought higher yields[182](index=182&type=chunk) [Capital and Liquidity](index=46&type=section&id=Capital%20and%20Liquidity) The Corporation maintains a strong capital and liquidity position, with stockholders' equity at $178.0 million and robust capital ratios Bank Capital Ratios | Ratio | June 30, 2025 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Tier 1 leverage ratio | 9.32% | 5.00% | | Common tier 1 risk-based capital ratio | 10.53% | 6.50% | | Tier 1 risk-based capital ratio | 10.53% | 8.00% | | Total risk-based capital ratio | 11.54% | 10.00% | - The company has access to significant liquidity sources, including a maximum borrowing capacity of **$710.4 million** with the FHLB and **$56.0 million** in unsecured federal funds lines[194](index=194&type=chunk) - A quarterly cash dividend of **$0.125** per common share was declared on July 24, 2025[184](index=184&type=chunk) [Item 3 Quantitative and Qualitative Disclosures about Market Risk](index=50&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Market risk, primarily interest rate risk, is managed using simulation models to assess impact on Net Interest Income and Economic Value of Equity Net Interest Income (NII) Sensitivity Analysis | Change in Market Interest Rates (over 12 months) | % Change in NII (June 30, 2025) | | :--- | :--- | | +300 basis points | 0.39% | | +200 basis points | 0.49% | | +100 basis points | 0.39% | | -100 basis points | (0.54)% | | -200 basis points | (0.93)% | Economic Value of Equity (EVE) Sensitivity Analysis | Instantaneous Change in Market Interest Rates | % Change in EVE (June 30, 2025) | | :--- | :--- | | +300 basis points | 6% | | +200 basis points | 6% | | +100 basis points | 4% | | -100 basis points | (7)% | | -200 basis points | (19)% | [Item 4 Controls and Procedures](index=52&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control - The CEO and CFO concluded that the Corporation's **disclosure controls and procedures were effective as of June 30, 2025**[217](index=217&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Corporation's internal controls[218](index=218&type=chunk) [PART II OTHER INFORMATION](index=52&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1 Legal Proceedings](index=52&type=section&id=Item%201%20Legal%20Proceedings) The Corporation reported no legal proceedings during the period - There are **no legal proceedings to report**[220](index=220&type=chunk) [Item 1A Risk Factors](index=52&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors have occurred since the filing of the 2024 Form 10-K - **No material changes in risk factors have occurred** since the filing of the 2024 Form 10-K[220](index=220&type=chunk) [Item 2, 3, 4, 5 Other Information](index=52&type=section&id=Item%202,%203,%204,%205%20Other%20Information) The Corporation reported no unregistered sales of equity securities, no defaults upon senior securities, or other material information - The company reports **'None' for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, and Other Information**, and Mine Safety Disclosures are not applicable[221](index=221&type=chunk) [Item 6 Exhibits](index=53&type=section&id=Item%206%20Exhibits) This section provides an index of exhibits filed with the report, including certifications and XBRL data files

Core Insights - The partnership between Meridian Health Plan of Michigan and the Centene Foundation aims to enhance access to fresh food and improve health outcomes in rural southwest Michigan through a $1 million grant to the Food Bank Council of Michigan [1][8] - The initiative focuses on addressing food insecurity, which is linked to diet-sensitive chronic diseases, by implementing a two-phased program that includes upgrading food pantries and establishing a fresh food pharmacy [2][5] Phase One Summary - Phase One will upgrade two existing food pantries to become Nourish MI Pantries, which will provide fresh, nutritious food and support health and equity partnerships [2][3] - The upgraded pantries will implement food as medicine interventions and receive technological support for future In Lieu of Services (ILOS) implementation [4] - The initiative aims to strengthen local food access and build capacity for ILOS operations for participating Medicaid health plans [4] Phase Two Summary - Phase Two, starting in 2026, will designate and upgrade five additional Nourish MI Pantries and fund the Fresh Food Pharmacy program at Grace Health [5] - The Fresh Food Pharmacy will assist eligible patients with diet-sensitive chronic conditions in accessing nutritious food and health education [5] Context of Food Insecurity - Over 1.4 million people in Michigan face food insecurity, with more than 378,000 being children, particularly affecting rural communities with limited access to grocery stores [6] - The partnership aims to address the root causes of health disparities and improve overall health outcomes in these communities [2][8] Organizational Background - Meridian Health Plan of Michigan provides managed care services primarily through Medicaid and is part of Centene Corporation [9] - The Centene Foundation focuses on investing in economically challenged communities and improving health equity [10] - The Food Bank Council of Michigan leads efforts to end hunger in the state by advocating for policies and providing resources to food banks [11]

Core Viewpoint - Meridian Corporation reported strong financial performance for the second quarter of 2025, with significant increases in net income and pre-provision net revenue, driven by improved margins and strong loan sales [2][5][7]. Financial Performance - Net income for Q2 2025 was $5.6 million, or $0.49 per diluted share, representing a 133% increase from the previous quarter [5][30]. - Pre-provision net revenue (PPNR) rose to $11.1 million, up 57% from Q2 2024 [5][30]. - The net interest margin improved to 3.54%, with loan yield increasing to 7.24% [5][30]. Loan and Deposit Growth - Loan growth for the quarter was 2.5%, with management forecasting an annual growth rate of 8-10% [2][5]. - Total assets remained stable at $2.5 billion, with portfolio loans growing by $36.2 million, or 1.7% quarter-over-quarter [19][20]. - Total deposits decreased by $18.4 million, or 0.9%, primarily due to a decline in non-interest bearing deposits [22][23]. Non-Interest Income - Total non-interest income increased by $4.0 million, or 54.1%, driven by a significant rise in mortgage banking income and SBA loan income [15][16]. - Mortgage banking income reached $5.8 million, a 69.8% increase from the previous quarter [15][16]. Non-Interest Expense - Total non-interest expense rose by $2.6 million, or 13.9%, with notable increases in salaries and employee benefits [18][30]. - Salaries and employee benefits increased by $1.8 million, reflecting the hiring of additional staff [18]. Asset Quality - Non-performing loans decreased by $1.7 million to $50.5 million, improving the ratio of non-performing loans to total loans to 2.35% [24][26]. - Net charge-offs increased to $3.6 million, or 0.17% of total average loans, compared to 0.14% in the previous quarter [25][30]. Capital and Equity - Total stockholders' equity increased by $4.5 million to $178.0 million, supported by net income and dividends paid [23][30]. - The Community Bank Leverage Ratio was reported at 9.32% as of June 30, 2025 [23][30].

[Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) [Overview of Q2 2025 Performance](index=1&type=section&id=Overview%20of%20Q2%202025%20Performance) Meridian Corporation's Q2 2025 net income surged to **$5.6 million**, a **133% increase**, driven by improved net interest margin and strong loan sales Key Financial Highlights (Dollars in thousands) | (Dollars in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | **Net income** | $ 5,592 | $ 2,399 | $ 3,326 | | **Diluted earnings per common share** | $ 0.49 | $ 0.21 | $ 0.30 | | **Pre-provision net revenue (PPNR)** | $ 11,090 | $ 8,357 | $ 7,072 | - CEO Christopher J. Annas highlighted that the strong Q2 earnings were driven by improving margin, SBA loan sales, and mortgage seasonality. PPNR increased **33%** quarter-over-quarter, reflecting healthy business growth and good expense control[2](index=2&type=chunk) - Management is intensely focused on reducing nonperforming loans, though the process is expected to be slow. The company forecasts annual loan growth in the **8-10%** range[2](index=2&type=chunk) - Business unit performance was solid, with Meridian Wealth Partners reporting pre-tax income of **$604 thousand** and the mortgage team showing a significant turnaround from the first quarter despite low housing inventory[3](index=3&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of **$0.125** per common share, payable in August 2025 - A quarterly cash dividend of **$0.125** per common share was declared on July 24, 2025, payable on August 18, 2025, to shareholders of record as of August 11, 2025[4](index=4&type=chunk) [Financial Performance Analysis (Q2 2025 vs. Q1 2025)](index=3&type=section&id=Financial%20Performance%20Analysis%20(Q2%202025%20vs.%20Q1%202025)) [Income Statement Analysis](index=3&type=section&id=Income%20Statement%20Analysis) Net income for Q2 2025 surged by **$3.2 million (133.1%)** to **$5.6 million**, driven by improved net interest income and reduced credit loss provision - The **$3.2 million (133.1%)** quarter-over-quarter increase in net income was driven by improvements in net interest income (+$1.4 million), a lower provision for credit losses (-$1.4 million), and higher non-interest income (+$4.0 million)[7](index=7&type=chunk) [Net Interest Income](index=4&type=section&id=Net%20Interest%20Income) Net interest income grew by **$1.4 million** QoQ, with net interest margin expanding by **8 basis points** to **3.54%**, driven by increased earning assets - The net interest margin increased by **8 basis points** to **3.54%** in Q2 2025, as the yield on earning assets increased and the cost of funds declined[13](index=13&type=chunk) - Interest income increased by **$2.0 million** QoQ, mainly due to a **$74.7 million** increase in average interest-earning assets, which contributed **$1.7 million** to the rise[10](index=10&type=chunk) - Average total loans grew by **$73.6 million**, led by increases in commercial, commercial real estate, and construction loans[11](index=11&type=chunk) - Interest expense rose by **$660 thousand** due to higher volumes of deposits and borrowings, but the overall cost of deposits dropped by **5 basis points**[12](index=12&type=chunk) [Provision for Credit Losses](index=4&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses decreased by **$1.4 million** to **$3.8 million** in Q2 2025, due to lower non-performing loans and slower loan growth - The provision for credit losses decreased from **$5.2 million** in Q1 2025 to **$3.8 million** in Q2 2025, due to a decline in non-performing loans, a decrease in required specific reserves, and lower loan growth during the quarter[14](index=14&type=chunk) [Non-interest Income](index=5&type=section&id=Non-interest%20Income) Non-interest income significantly rose by **$4.0 million (54.1%)** to **$11.3 million**, driven by improved mortgage banking and SBA loan income Non-interest Income (Dollars in thousands) | (Dollars in thousands) | Q2 2025 | Q1 2025 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Mortgage banking income | $ 5,762 | $ 3,393 | $ 2,369 | 69.8% | | SBA loan income | $ 1,988 | $ 748 | $ 1,240 | 165.8% | | Net gain (loss) on sale of MSRs | $ 467 | $ (52) | $ 519 | (998.1)% | | **Total non-interest income** | **$ 11,288** | **$ 7,324** | **$ 3,964** | **54.1%** | - SBA loan income increased by **$1.2 million** as the volume of SBA loans sold rose by **$27.4 million** to **$39.5 million** for the quarter[16](index=16&type=chunk) [Non-interest Expense](index=5&type=section&id=Non-interest%20Expense) Non-interest expense increased by **$2.6 million (13.9%)** to **$21.4 million**, primarily due to higher salaries and benefits Non-interest Expense (Dollars in thousands) | (Dollars in thousands) | Q2 2025 | Q1 2025 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $ 13,179 | $ 11,385 | $ 1,794 | 15.8% | | Professional fees | $ 1,164 | $ 763 | $ 401 | 52.6% | | Advertising and promotion | $ 1,277 | $ 779 | $ 498 | 63.9% | | Occupancy and equipment | $ 1,037 | $ 1,338 | $ (301) | (22.5)% | | **Total non-interest expense** | **$ 21,357** | **$ 18,743** | **$ 2,614** | **13.9%** | [Balance Sheet Analysis](index=6&type=section&id=Balance%20Sheet%20Analysis) Total assets slightly decreased by **$18.0 million** to **$2.5 billion**, primarily due to a cash reduction, despite growth in portfolio loans - Total assets decreased by **$18.0 million (0.7%)** to **$2.5 billion**, primarily due to an **$84.7 million** decrease in cash after a temporary deposit of **$103 million** was withdrawn[18](index=18&type=chunk) - Portfolio loans grew by **$36.2 million (1.7%)**, led by a **$32.0 million** increase in commercial & industrial loans, partially offset by a **$16.4 million** decrease in SBA loan balances due to sales[19](index=19&type=chunk) - Total deposits decreased by **$18.4 million (0.9%)**, as an **$86.4 million** decline in non-interest bearing deposits was largely offset by a **$68.1 million** increase in interest-bearing deposits[20](index=20&type=chunk) - Total stockholders' equity increased by **$4.5 million** to **$178.0 million**, driven by net income of **$5.6 million** less dividends paid of **$1.4 million**[21](index=21&type=chunk) [Asset Quality](index=6&type=section&id=Asset%20Quality) Asset quality improved as non-performing loans decreased by **$1.7 million** to **$50.5 million**, lowering the NPL to total loans ratio to **2.35%** - Non-performing loans decreased by **$1.7 million** to **$50.5 million** at June 30, 2025, improving the ratio of non-performing loans to total loans to **2.35%** from **2.49%**[22](index=22&type=chunk) - Net charge-offs increased to **$3.6 million (0.17% of total average loans)** for Q2 2025, compared to **$2.8 million (0.14%)** in the previous quarter, mainly from SBA loans and equipment leases[23](index=23&type=chunk) - The allowance for credit losses to total loans held for investment was **1.00%**, relatively flat from the prior quarter, with specific reserves decreasing by **$1.7 million** to **$3.3 million**[24](index=24&type=chunk) [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Select Condensed Financial Information](index=3&type=section&id=Select%20Condensed%20Financial%20Information) This section provides a five-quarter overview of key financial data, highlighting Q2 2025 net income of **$5.6 million** as a significant recovery Select Condensed Financial Information (Dollars in thousands) | (Dollars in thousands) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net income** | $ 5,592 | $ 2,399 | $ 5,600 | $ 4,743 | $ 3,326 | | **Total assets** | $ 2,510,938 | $ 2,528,888 | $ 2,385,867 | $ 2,387,721 | $ 2,351,584 | | **Loans, net** | $ 2,108,250 | $ 2,071,675 | $ 2,030,437 | $ 2,008,396 | $ 1,988,535 | | **Total deposits** | $ 2,110,374 | $ 2,128,742 | $ 2,005,368 | $ 1,978,927 | $ 1,915,436 | | **Stockholders' equity** | $ 178,020 | $ 173,568 | $ 171,522 | $ 167,450 | $ 162,382 | | **Return on average assets** | 0.90 % | 0.40 % | 0.92 % | 0.80 % | 0.58 % | | **Return on average equity** | 12.68 % | 5.57 % | 13.01 % | 11.41 % | 8.25 % | [Financial Ratios](index=9&type=section&id=Financial%20Ratios) This section presents detailed performance, asset quality, and capital ratios, showing improvements in net interest margin to **3.54%** and efficiency ratio to **65.82%** Key Financial Ratios | Ratio | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | **Return on average assets** | 0.90 % | 0.40 % | 0.58 % | | **Return on average equity** | 12.68 % | 5.57 % | 8.25 % | | **Net interest margin (tax-equivalent)** | 3.54 % | 3.46 % | 3.06 % | | **Efficiency ratio** | 65.82 % | 69.16 % | 72.89 % | | **Non-performing loans to total loans** | 2.35 % | 2.49 % | 1.84 % | | **Book value per common share** | $ 15.76 | $ 15.38 | $ 14.51 | [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Presents detailed income statements for Q2 2025 and Q2 2024, showing Q2 2025 net income of **$5.6 million** Condensed Consolidated Statements of Income (Dollars in thousands) | (Dollars in thousands) | Three Months Ended Jun 30, 2025 | Three Months Ended Jun 30, 2024 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net interest income** | $ 21,159 | $ 16,846 | $ 40,935 | $ 33,455 | | **Provision for credit losses** | $ 3,803 | $ 2,680 | $ 9,015 | $ 5,546 | | **Total non-interest income** | $ 11,288 | $ 9,244 | $ 18,612 | $ 17,228 | | **Total non-interest expense** | $ 21,357 | $ 19,018 | $ 40,100 | $ 37,192 | | **Net income** | $ 5,592 | $ 3,326 | $ 7,991 | $ 6,002 | | **Diluted EPS** | $ 0.49 | $ 0.30 | $ 0.70 | $ 0.54 | [Condensed Consolidated Statements of Condition (Balance Sheet)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Condition%20(Balance%20Sheet)) Details assets, liabilities, and equity, showing **$2.51 billion** in total assets and **$178.0 million** in stockholders' equity as of June 30, 2025 Condensed Consolidated Statements of Condition (Dollars in thousands) | (Dollars in thousands) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | **Total assets** | $ 2,510,938 | $ 2,528,888 | $ 2,351,584 | | Cash and cash equivalents | $ 50,174 | $ 131,225 | $ 24,058 | | Loans, net of allowance | $ 2,087,399 | $ 2,050,848 | $ 1,966,832 | | **Total liabilities** | $ 2,332,918 | $ 2,355,320 | $ 2,189,202 | | Total deposits | $ 2,110,374 | $ 2,128,742 | $ 1,915,436 | | **Total stockholders' equity** | $ 178,020 | $ 173,568 | $ 162,382 | [Segment Information](index=13&type=section&id=Segment%20Information) Breaks down financial performance by Bank, Wealth, and Mortgage segments, with the Bank segment contributing **$5.2 million** to pre-tax income in Q2 2025 Segment Performance (Dollars in thousands) | (dollars in thousands) | Bank | Wealth | Mortgage | Total | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | | | | | | Net interest income | $ 21,025 | $ 63 | $ 71 | $ 21,159 | | Non-interest income | $ 3,029 | $ 1,492 | $ 6,767 | $ 11,288 | | Non-interest expense | $ 15,049 | $ 951 | $ 5,357 | $ 21,357 | | **Income before income taxes** | **$ 5,202** | **$ 604** | **$ 1,481** | **$ 7,287** | | **Three Months Ended June 30, 2024** | | | | | | **Income before income taxes** | **$ 3,171** | **$ 676** | **$ 545** | **$ 4,392** | [Appendix: Non-GAAP Measures](index=15&type=section&id=Appendix%3A%20Non-GAAP%20Measures) [Pre-Provision Net Revenue (PPNR) Reconciliation](index=15&type=section&id=Pre-Provision%20Net%20Revenue%20(PPNR)%20Reconciliation) Reconciles income before income tax expense to PPNR, showing Q2 2025 PPNR of **$11.1 million**, a significant increase from the prior quarter Pre-Provision Net Revenue (PPNR) Reconciliation (Dollars in thousands) | (Dollars in thousands) | Three Months Ended Jun 30, 2025 | Three Months Ended Mar 31, 2025 | Three Months Ended Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Income before income tax expense | $ 7,287 | $ 3,145 | $ 4,392 | | Provision for credit losses | $ 3,803 | $ 5,212 | $ 2,680 | | **Pre-provision net revenue** | **$ 11,090** | **$ 8,357** | **$ 7,072** | [Tangible Capital & Book Value Reconciliations](index=15&type=section&id=Tangible%20Capital%20%26%20Book%20Value%20Reconciliations) Reconciles GAAP measures to non-GAAP tangible counterparts, showing a tangible common equity to tangible assets ratio of **6.96%** and tangible book value per common share of **$15.44** Tangible Capital & Book Value Reconciliations | (Corporation) | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | **Tangible common equity to tangible assets ratio** | 6.96 % | 6.73 % | 6.76 % | | **Tangible book value per common share** | $ 15.44 | $ 15.06 | $ 14.17 |

Group 1: Maternity Healthcare Challenges - In Illinois, 34.3% of counties are classified as maternity healthcare deserts, requiring residents to travel between 47 and 59 miles to reach a birthing hospital [1] - Many rural hospitals in Illinois have closed their labor and delivery units, exacerbating the issue of maternity care deserts [3] Group 2: OSF OnCall Connect Program - The OSF OnCall Connect program aims to provide pregnancy and postpartum care to women on Medicaid in Central Illinois, particularly in underserved counties [2][3] - The program includes a mobile clinic that will offer prenatal and postpartum services, including sonograms, lab work, vaccinations, and blood pressure monitoring [1][3] Group 3: Operational Details - The mobile unit is set to begin operations in July 2025, with eligible patients able to self-enroll or be referred by their healthcare provider [3] - The OSF OnCall Connect team will assist with program enrollment and scheduling appointments for the mobile clinic [3] Group 4: Services Offered - Services provided by the mobile clinic include education and information for each week of pregnancy, regular check-ins, 24/7 virtual access to a care team, blood pressure monitoring, lab work, screening for postpartum depression, and breastfeeding support [8]