What changed in this filing

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Item 1. Business

2026-02-24 compared with 2025-02-27 · 126 added, 134 removed, 363 unchanged (42% of the section changed)

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We seek to maintain our community orientation by providing local management with certain autonomy in decision making, enabling them to respond to customer requests more quickly and to concentrate on efficiently delivering products and services within their market areas.

However, we have centralized operations, support and risk functions (e.g.

loan operations, treasury and enterprise risk management).

However, we have centralized operations, support and risk functions (e.g., loan operations, treasury and enterprise risk management).

The centralization of these processes enables us to maintain consistent quality of these functions and to achieve certain economies of scale.

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and Virginia.

As of December 31, 2024, we had total assets of nearly $49 billion, loans of $34 billion and deposits of $37 billion.

As of December 31, 2025, we had total assets of $50 billion, loans of $35 billion and deposits of $39 billion.

See Item 7, MD&A, and Item 8, “Financial Statements and Supplementary Data,” of this Report.

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As of December 31, 2025, we had three reportable business segments, with the largest being the Community Banking segment which consists of a regional bank serving seven states and the District of Columbia.

The Wealth Management segment consists of a federally chartered trust company, a registered investment advisor and a subsidiary that offers broker-dealer services through a third-party networking arrangement with a non-affiliated licensed broker-dealer entity.

The Wealth Management segment consists of a federally chartered trust company and a subsidiary that offers broker-dealer services through a third-party networking arrangement with a non-affiliated licensed broker-dealer entity.

Our former registered investment advisory company, FNBIA, client accounts were transferred to FNTC, and FNBIA was deregistered in the fourth quarter 2025 with the company currently in the process of being dissolved.

The Insurance segment consists of an insurance agency and a reinsurer.

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Our Community Banking segment consists of FNBPA, which offers commercial and consumer banking services.

Commercial banking solutions include corporate banking, small business banking, investment real estate financing, business credit, capital markets and lease financing.

Commercial banking solutions include corporate banking, treasury management services, small business banking, investment real estate financing, business credit, capital markets and equipment financing.

Consumer banking products and services include deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services.

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The goals of the Community Banking segment are to generate high-quality, profitable revenue growth through increased business with our current customers, attract new customer relationships through FNBPA’s current branches and expand into new and existing markets through de novo branch openings and the establishment of loan production offices.

We consider the Community Banking segment an important source of revenue opportunity through the cross-selling of products and services offered by our other business segments.

We consider the Community Banking segment an important source of revenue opportunity through products and services offered by our other business segments.

The lending philosophy of the Community Banking segment is to establish high-quality customer relationships, while minimizing credit losses by following strict credit approval standards (which include independent analysis of realizable collateral value), diversifying our loan portfolio by industry, geography, product and borrower, and conducting ongoing review and management of the loan portfolio.

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Specific information requirements vary based on loan type, risk profile and secondary investor requirements, where applicable.

No material portion of the loans or deposits of the Community Banking segment has been obtained from a single customer or small group of customers, and the loss of any one customer’s loans or deposits or a small group of customers’ loans or deposits by the Community Banking segment would not have a material adverse effect on the Community Banking segment specifically

or on FNB generally.

by the Community Banking segment would not have a material adverse effect on the Community Banking segment specifically or on FNB generally.

The substantial majority of the loans and deposits have been generated within the geographic market areas in which the Community Banking segment operates.

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Our Wealth Management segment delivers wealth management services to individuals, corporations and retirement funds, including existing customers of the Community Banking segment, located primarily within our geographic markets.

Our Wealth Management operations are conducted through three subsidiaries of FNBPA.

Our Wealth Management operations are conducted through two subsidiaries of FNBPA.

FNTC provides a broad range of personal and corporate fiduciary services, including the administration of decedent and trust estates.

As of December 31, 2024, the fair value of trust assets under management was approximately $9.5 billion.

As of December 31, 2025, the fair value of trust assets under administration was approximately $14.9 billion.

FNTC is required to maintain certain minimum capitalization levels in accordance with regulatory requirements.

FNTC periodically measures its capital position to ensure all minimum capitalization levels are maintained.

Our Wealth Management segment also includes two other subsidiaries.

First National Investment Services Company, LLC offers a broad array of investment products and services for customers of the Wealth Management segment through a networking relationship with a third-party licensed brokerage firm.

FNBIA, an investment advisor registered with the SEC, offers customers of the Wealth Management segment comprehensive investment programs featuring mutual funds, annuities, stocks and bonds.

Our Wealth Management segment also includes another subsidiary, First National Investment Services Company, LLC, which offers a broad array of investment products and services for customers of the Wealth Management segment through a networking relationship with a third-party licensed brokerage firm.

No material portion of the business of the Wealth Management segment has been obtained from a single customer or small group of customers, and the loss of any one customer’s business or the business of a small group of customers by the Wealth Management segment would not have a material adverse effect on the Wealth Management segment specifically or on FNB generally.

Our registered investment adviser subsidiary is subject to the Investment Advisers Act of 1940 and related rules and regulations promulgated by the SEC.

Our investment adviser subsidiary is also subject to additional regulation by states and local jurisdictions.

The SEC has active enforcement functions that oversee investment advisers and can bring actions that result in fines, restitution, a limitation on permitted activities, disqualification to continue to conduct certain activities and an inability to rely on certain favorable exemptions.

Certain types of infractions and violations also can affect our ability to expeditiously issue new securities into the capital markets.

FNBIA was a subsidiary of FNTC that was registered as an investment adviser with the SEC and subject to the Investment Advisers Act of 1940 (Investment Advisers Act) and applicable state securities laws.

FNBIA has ceased operations as an investment adviser and deregistered with the SEC as of December 31, 2025.

Our Insurance segment operates principally through FNIA, which is a subsidiary of FNB.

FNIA is a full-service insurance brokerage agency offering numerous lines of commercial and personal insurance through major carriers to businesses and individuals primarily within FNB’s geographic markets.

The goals of FNIA are to grow revenue through cross-selling to existing clients of the Community Banking segment and to gain new clients through its own channels.

The goals of FNIA are to grow revenue with existing clients of the Community Banking segment and to gain new clients through its own channels.

Our Insurance segment also includes a reinsurance subsidiary, Penn-Ohio.

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Capital Corporation, LLC is a merchant banking subsidiary offering mezzanine financing options for small- to medium-sized businesses that need financial assistance beyond the parameters of typical commercial bank lending products.

Waubank Securities LLC is a limited broker-dealer subsidiary which passively participates in corporate and municipal underwritings.

FNB America Securities LLC is a limited broker-dealer subsidiary, which passively participates in corporate and municipal underwritings as well as offering advice and strategic planning for small businesses regarding mergers and acquisitions and capital structure planning.

In addition, we have four companies that issued TPS to third-party investors:

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The proceeds received from these subordinated note issuances are a general funding source for FNB.

Certain financial information concerning these subsidiaries, along with the parent company and intercompany eliminations, are

included in the “Parent and Other” category in Note 24, “Business Segments” in the Notes to Consolidated Financial Statements, which is included in Item 8 of this Report.

Certain financial information concerning these subsidiaries, along with the parent company and intercompany eliminations, are included in the “Parent and Other” category in Note 24, “Business Segments” in the Notes to Consolidated Financial Statements, which is included in Item 8 of this Report.

Market Area and Competition

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In providing wealth and asset management services, as well as insurance brokerage services, our subsidiaries compete with many other financial services firms, brokerage firms, mutual fund complexes, investment management firms, trust and fiduciary service providers and insurance agencies.

Competition for loans and deposits depends on a number of factors, including, among others, customer service, quality and range of products and services offered, price, reputation, interest rates on loans and deposits and lending limits.

Competition for loans and deposits depends on a number of factors, including, among others, customer service, quality, convenience and range of products and services offered, price, reputation, interest rates on loans and deposits and lending limits.

Also, our ability to continue to compete effectively depends in large part on retaining and motivating our employees and attracting new employees, while effectively managing compensation and other expenses, especially given recent inflationary wage pressures.

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Technology is not only important with respect to the delivery of financial services, risk management, regulatory compliance and security of customer information, but also in processing information.

FNB and each of our subsidiaries continually make technological investments to remain competitive in the financial services industry.

FNB and each of our subsidiaries continually make technological investments to remain competitive in the financial services industry, including the use of AI.

FNBPA has executed several initiatives that have integrated and streamlined its physical branch and e-delivery channels, including a growing fleet of ATMs with video TellerChat capabilities.

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We are committed to attracting, retaining and developing exceptional talent who reflect the communities we serve.

FNB’s leadership team has made long-standing investments in a competitive compensation and benefits program that promotes work-life balance, financial and mental health, and overall well-being.

The comprehensive package includes robust development resources that encourage advancement and increased representation at all levels of the Company, furthering our strategic focus on building and sustaining a strong workforce.

Through our comprehensive approach, we have created an inclusive environment that fosters collaboration, innovation and a passion to win, all of which translate to strong performance and a rewarding employee experience.

In 2024, we received more than 80 awards recognizing our financial performance, outstanding culture, community commitments, leadership and innovative technology, including national, regional and industry-specific recognition from Energage, an independent research firm, based entirely on feedback from our own team.

As part of its award program, Energage highlighted FNB’s cultural excellence in categories such as innovation, leadership, work-life flexibility, compensation and benefits, professional development, and employee appreciation and well-being.

Additionally, our commitment to providing an inclusive, employee-centric workplace was further celebrated by various national media outlets, including an appearance on Newsweek’s lists of America’s Greatest Workplaces for Diversity, LGBTQ+, Veterans and Parents and Families.

FNB has also repeatedly been named to JUST Capital’s prestigious annual list of companies that demonstrate just business behavior based on our performance in categories that matter most to the American public and is, in part, an assessment of our employee practices relative to benefits, income inequality and employee opportunity.

FNB’s leadership team has made long-standing investments in maintaining a sustainable and resilient work force including providing a competitive compensation and benefits program that promotes work-life balance, financial and mental health, and overall well-being.

The comprehensive package includes robust development resources promoting a culture of belonging that encourages and provides opportunity and advancement for all employees at all levels of the company, furthering our strategic focus on building and sustaining a strong workforce.

Through our comprehensive approach, we have created a collaborative environment that fosters talent, opportunity, innovation and a passion to win, all of which translate to strong performance and a rewarding and opportunistic experience for all employees.

In 2025, we received more than 80 awards recognizing our financial performance, exceptional workplace, culture, community commitments, strong leadership and innovative banking approach, including national, regional and industry-specific recognition from Energage, an independent research firm, based entirely on feedback from our own team.

As part of its award program, Energage highlighted FNB’s cultural excellence in categories such as innovation, leadership, work-life flexibility, professional development, and employee appreciation and well-being.

Additionally, our commitment to promoting a culture of belonging and fair treatment for our employees was further celebrated by various national media outlets, including an appearance on Newsweek’s lists of America’s Greatest Workplaces, which recognized companies whose employment practices embody fairness and equality for employees.

As of December 31, 2025, FNB and our subsidiaries had 4,128 full-time and 154 part-time employees.

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We use internally created digital marketing-developed algorithms and data tools to increase job posting visibility within a broad range of job boards.

We have committed to creating a strong and growing internship program to funnel high potential talent into our Development Programs within FNB to help with career growth.

We continue to build succession and are devoted to following the Fair Hiring Practices Act and Fair Chance Act.

We have committed to creating a strong and growing internship program to funnel high potential talent into our

Development Programs within FNB to help with career growth.

We continue to build our internal succession planning and are devoted to following the Fair Hiring Practices Act and Fair Chance Act.

Employee Development.

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We believe that compensation programs, through competitive base salary, short-term incentive plans, and long-term incentive plans, are essential for setting performance expectations, improving service quality and productivity, and recognizing contributions to our success, while also avoiding incentivizing undue risk to our financial condition.

Our executive compensation program is overseen by the Compensation Committee of our Board of Directors, in collaboration with a leading independent compensation advisory firm.

Our executive compensation program is overseen by the Compensation Committee of our Board of Directors (composed entirely of independent directors), in collaboration with a leading independent compensation advisory firm.

In addition, the oversight and review of our company-wide compensation philosophy and programs are conducted by the Management Compensation Committee.

This team, chaired by FNB’s Chairman, President and Chief Executive Officer, regularly meets to promote compensation programs that are fair and equitable, to achieve a performance-driven work culture that generates company growth and to reward employees for focusing on customer needs, while avoiding inappropriate conduct regarding our clients, and demonstrating appropriate risk management behaviors.

This team, chaired by FNB’s Chairman, President and Chief Executive Officer, regularly meets to promote compensation programs that are fair and impartial, to achieve a performance-driven work culture that generates company growth and to reward employees for focusing on customer needs, while avoiding inappropriate conduct regarding our clients, and demonstrating appropriate risk management behaviors.

Values & Training.

We strive to maintain sound financial practices and governance processes through a commitment to ethical behavior, a solid reputation and a firm record of compliance and stability that these strengths create, both within our Corporation and for our customers.

Employees complete quarterly and annual training, including regarding regulatory and compliance requirements and ethical standards, to maintain and increase knowledge of standards required of the financial services industry.

Employees complete quarterly and annual training, which include regulatory and compliance requirements and ethical standards, to maintain and increase knowledge of standards required of the financial services industry.

Additionally, we provide employees various avenues to confidentially and anonymously report perceived unethical behavior without repercussions to them, such as FNB’s Ethics Hotline.

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Employee and customer safety remain paramount concerns for us.

We demonstrate this commitment to each group through varying initiatives and procedures to ensure that employees and customers alike leave our spaces as safely as they came.

We demonstrate this commitment to each group through varying initiatives and procedures to ensure that employees and customers alike experience safe surroundings.

We provide our employees detailed information and training explaining the safety features of our locations, evacuation routes and emergency procedures processes.

The recent opening of our new state of the art headquarters building prioritizes employee safety in a facility that is fully ADA compliant, has full security access controls and closely manages and monitors guests and visitors entering our space.

As a response to the health and safety risks exposed during the COVID-19 outbreak our new headquarters building features HVAC systems that are specifically designed to mitigate risks from airborne pathogens using state of the art filtration, Air Handling and Ionization indoor air systems.

The new headquarters was certified Leadership in Energy and Environmental Design (LEED) Gold by the U.S.

Our new state-of-the-art headquarters building prioritizes employee safety in a facility that is fully ADA compliant, has full security access controls and closely manages and monitors guests and visitors entering our space.

As a response to the health and safety risks exposed during the COVID-19 outbreak our headquarters building features HVAC systems that are specifically designed to mitigate risks from airborne pathogens using state-of-the-art filtration, Air Handling and Ionization indoor air systems.

In 2024, our headquarters building was certified Leadership in Energy and Environmental Design (LEED) Gold by the U.S.

Green Building Council.

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Mitchell, II 68 Chief Wholesale Banking Officer

Robinson 61 Chief Consumer Banking Officer

Cho 48 Chief Consumer Banking Officer

Orie 67 Chief Legal Officer and Corporate Secretary

Dutey 52 Corporate Controller and Principal Accounting Officer

There are no family relationships among any of our executive officers or directors, and there is no arrangement or understanding between any of the above executive officers and any other person pursuant to which he was selected as an officer.

The executive officers are elected by our Board of Directors, subject in certain cases to the terms of an employment agreement between the officer and us.

Government Supervision and Regulation

The following summary sets forth certain material elements of the regulatory framework applicable to FNB, FNBPA and our other subsidiaries and affiliates.

To the extent that the following information describes statutory and regulatory provisions or governmental policies, such descriptions are qualified in their entirety by reference to the full text of the statutes, regulations and policies referenced herein.

The financial services industry is subject to extensive regulatory oversight and, in particular, bank holding companies, banks and their affiliates (depending upon charter and business activities) are subject to supervision, regulation and examination by the FRB, OCC, FDIC, CFPB, SEC, FINRA and various state regulatory agencies.

Also, FNB is subject to the rules of the NYSE for listed companies.

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banking and financial system, and financial markets as a whole, rather than our shareholders.

This discussion is qualified in its entirety by reference to applicable laws and regulations.

Regulations of banks and their holding companies are subject to frequent and ongoing revision, through legislative changes, regulatory revisions and the evolving supervisory objectives of the federal and state banking agency examiners and supervisory staff.

Additionally, the current U.S.

administration is in the process of implementing a regulatory reform agenda that is significantly different than that of the prior administration, which affects the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.

In particular, the OCC, FRB and FDIC have signaled a desire to remove excessive regulatory, supervisory and examination burdens, while prioritizing efforts to focus supervision on material financial risks.

It is not possible to predict the content or timing of changes to the laws and regulations that may impact our business.

Changes in such laws and regulations may have a material effect on our business and prospects.

Finally, investors should be aware that the regulatory framework governing banks and the financial services industry is intended primarily to protect depositors and the DIF, not FNB, its subsidiaries or our security holders.

Political, economic, and industry events and other factors may influence changes to the banking laws, regulations and policies by the U.S.

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(See discussion under Risk Factors - caption “We could be adversely affected by changes in the law, especially changes in the regulation of the banking industry.”)

To this end, based on the recent issuance of certain executive orders by the President of the United States, it may not be clear for a period of time as to what the priorities of the three prudential banking agencies, the OCC, FRB and FDIC, may be with respect to their respective supervisory and enforcement matters for banks and bank holding companies.

An executive order requires independent agencies, including the FRB and FDIC to submit to the White House Office of Management and Budget (OMB) major orders proposed by these agencies.

OMB would also write "performance standards and management objectives" to the heads of independent agencies, review and adjust their budgets, including the FRB (excluding its monetary policy) and FDIC.

As a result, it may take longer for the prudential banking agencies to establish their supervisory and enforcement priorities and develop and adopt new rules and regulations.

Another executive order requires agency heads to determine whether ongoing enforcement of any regulations identified in their regulatory review is compliant with law and policy of the Trump Administration.

This executive order also provides that to preserve resources and ensure lawful enforcement, agency heads, in consultation with the Director of the OMB, shall, on a case-by-case basis and as appropriate and consistent with applicable law, then direct the termination of all such enforcement proceedings that do not comply with the Constitution, laws, or the policy of the Trump Administration.

Both the scope of the laws and regulations, as well as expectations regarding risk management, and the intensity of the supervision to which we are subject have increased in recent years in response to the financial crisis, as well as other factors such as technological and market changes.

Regulatory enforcement and fines have also significantly increased across the banking and financial services sector.

Many of these changes have occurred as a result of the enactment of the Dodd-Frank Act and adoption of implementing regulations, most of which are now in place.

FNB is a legal entity separate and distinct from our subsidiaries.

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Our subsidiary bank, FNBPA, and FNBPA’s subsidiary trust company, FNTC, are organized as national banking associations, which are subject to regulation, supervision and examination by the OCC, which is a bureau of the UST.

FNBPA is also subject to certain regulatory requirements of the CFPB, the FDIC, the FRB and other federal and state regulatory agencies, including but not limited to, requirements to maintain reserves against deposits, capital requirements, limitations regarding dividends, restrictions on the types and amounts of loans that may be granted and the interest that may be charged on loans, affiliate transactions, CRA, consumer compliance and anti-discrimination laws and unfair, deceptive or abusive acts and practices prohibitions, monitoring obligations under the federal bank secrecy act and anti-money laundering requirements, limitations on the types of investments that may be made, cybersecurity and consumer privacy requirements, activities that may be engaged in and types of services that may be offered.

FNBPA is also subject to certain regulatory requirements of the CFPB, the FDIC, the FRB and other federal and state regulatory agencies, including but not limited to, requirements to maintain reserves against deposits, capital requirements, limitations regarding dividends, restrictions on the types and amounts of loans that may be granted and the interest that may be charged on loans, affiliate transactions, CRA, consumer compliance and anti-discrimination laws and unfair, deceptive or abusive acts and practices prohibitions, monitoring obligations under the BSA and anti-money laundering requirements, limitations on the types of investments that may be made, cybersecurity and consumer privacy requirements, activities that may be engaged in and types of services that may be offered.

We and our subsidiaries are subject to examination by various federal and state regulators, which involves periodic examinations and supervisory inquiries, the results of which are not publicly available and can impact the conduct and growth of our businesses.

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The FRB, the OCC, and the FDIC have adopted risk-based and leverage capital requirements that apply to banks and bank holding companies.

In general, subject to certain exceptions as discussed further below, minimum capital standards established under the agencies’ risk-based capital regulations include a CET1 capital to risk-weighted assets ratio of 4.5 percent, a Tier 1 capital to risk-weighted assets ratio of 6.0 percent, a total capital to risk-weighted assets ratio of 8.0 percent, and a leverage ratio of Tier 1 capital to adjusted average total assets of 4.0 percent.

In general, subject to certain exceptions as discussed further below, minimum capital standards established under the agencies’ risk-based capital regulations include a CET1 capital to risk-weighted assets ratio of 4.5%, a Tier 1 capital to risk-weighted assets ratio of 6.0%, a total capital to risk-weighted assets ratio of 8.0%, and a leverage ratio of Tier 1 capital to adjusted average total assets of 4.0%.

In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (for example, recourse obligations, direct credit substitutes and residual interests) are multiplied by a risk-weight factor assigned by the regulations based on the risks believed inherent in the type of asset.

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Tier 1 capital is generally defined as CET1 and additional Tier 1 capital, which includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital is defined as Tier 1 capital and Tier

2 capital, which is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.

Also included in Tier 2 capital is the allowance for loan losses limited to a maximum of 1.25 percent of risk-weighted assets.

Total capital is defined as Tier 1 capital and Tier 2 capital, which is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.

Also included in Tier 2 capital is the allowance for loan losses limited to a maximum of 1.25% of risk-weighted assets.

Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

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Management believes that as of December 31, 2025, FNB and FNBPA meet all capital adequacy requirements including the capital conservation buffer.

In August 2020, the federal banking agencies issued a final rule providing banking institutions that had adopted the CECL accounting standard in the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total).

during the initial two-year delay (i.e., a five-year transition in total).

In connection with its adoption of CECL on January 1, 2020, FNB elected to utilize the five-year CECL transition, which concluded as of December 31, 2025.

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In addition, FDICIA requires the various regulatory agencies to prescribe certain non-capital standards for safety and soundness relating generally to operations and management, asset quality and executive compensation and permits regulatory action against an IDI that does not meet such standards.

The various regulatory agencies have adopted substantially similar regulations that define the five capital categories identified by FDICIA, using the CET1, Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios as the relevant capital measures.

The various regulatory agencies have adopted substantially similar regulations that define the five capital categories identified by FDICIA, using the CET1 capital, Tier 1 risk-based capital, total risk-based capital, and leverage capital ratios as the relevant capital measures.

Under the regulations, a “well-capitalized” institution must have a CET1 risk-based capital ratio of at least 6.5%, a Tier 1 risk-based capital ratio of at least 8.0%, a total risk-based capital ratio of at least 10.0% and a leverage ratio of at least 5.0% and not be subject to a capital directive order.

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In addition to dividends from FNBPA, other sources of parent company liquidity for FNB include cash, short-term investments and issuance of debt instruments, as well as dividends and loan repayments from other subsidiaries.

In addition, the ability of FNB and FNBPA to pay dividends may be affected by the various minimum capital requirements and prompt corrective action standards previously described in the “Capital Adequacy Requirements” and “Prompt Corrective

Action” discussions herein.

Additionally, the right of FNB, our shareholders and our creditors to participate in any distribution of the assets or earnings of our subsidiaries is further subject to the prior claims of creditors of the respective subsidiaries.

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• the company may merge or consolidate with any other bank or financial holding company.

The BHC Act further requires the FRB to consider the competitive impact of the transaction, the financial and managerial resources and future prospects of the bank holding companies and banks concerned and the convenience and needs of the community to be served, including the applicant’s record of performance under the CRA.

The FRB is also required to take into account in evaluating such a transaction the effectiveness of the parties in combating money laundering activities.

The BHC Act further requires the FRB to consider the competitive impact of the transaction, the extent to which the transaction would result in greater or more concentrated risks to the stability of the U.S.

banking or financial system, the financial and managerial resources and future prospects of the bank holding companies and banks concerned and the convenience and needs of the community to be served, including the applicant’s record of performance under the CRA.

The FRB is also required to consider in evaluating such a transaction the effectiveness of the parties in combating money laundering activities.

Provisions of the FDI Act known as the Bank Merger Act impose similar approval standards for an IDI to merge with another IDI.

On September 17, 2024, the OCC finalized a new Policy Statement Regarding Statutory Factors Under the Bank Merger Act (the Policy Statement), which outlines factors that the OCC will consider when evaluating a proposed bank merger transaction.

Under the Policy Statement, the OCC is unlikely to find that the statutory factors under the Bank Merger Act are consistent with approval if, among other things, the acquirer has open or pending enforcement actions unless the applicant has adequately addressed or remediated the underlying supervisory concerns.

Additionally, the Policy Statement provides that an application that is more likely to be approved expeditiously generally features a number of indicators, including that the resulting institution will have total assets of less than $50 billion.

On September 17, 2024, the OCC finalized a Policy Statement Regarding Statutory Factors Under the Bank Merger Act (the Policy Statement), which outlined factors that the OCC would consider when evaluating a proposed bank merger transaction.

The Policy Statement included a number of factors that would have resulted in stricter and/or more extended reviews of transactions involving particular features, such as an acquirer with open or pending enforcement actions or a resulting institution with total assets over $50 billion.

Also on September 17, 2024, the DOJ withdrew its 1995 Bank Merger Guidelines and announced that it will instead evaluate the competitive impact of bank mergers using its 2023 Merger Guidelines that the DOJ applies to mergers in all industries.

Compared to the 1995 Bank Merger Guidelines, the 2023 Merger Guidelines set forth more stringent concentration limits and add several largely qualitative bases on which the DOJ may challenge a merger.

While the effect of these changes for particular transactions remains unclear, both the Policy Statement and the change in the DOJ’s bank merger antitrust policy may make it more difficult and/or costly for us to obtain regulatory approval for an acquisition or may otherwise result in more onerous conditions to obtain approval for an acquisition.

However, on May 8, 2025, the OCC rescinded the Policy Statement and reinstated its expedited processing procedures for streamlined business combinations.

While the long-term effects of these changes and reversals for particular transactions remains unclear, the OCC has acted expeditiously on merger applications since its withdrawal of the Policy Statement, and the DOJ has not yet brought challenges against bank merger transactions under the 2023 Merger Guidelines.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Banking Act) generally permits bank holding companies to acquire banks in any state and preempts all state laws restricting the ownership by a holding company of banks in more than one state.

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The Change in Bank Control Act prohibits a person, entity or group of persons or entities acting in concert, from acquiring “control” of a bank holding company or bank unless the FRB has been given prior notice and has not objected to the transaction.

Under current FRB regulations, the acquisition of 10% or more (but less than 25%) of the voting stock of a

corporation would, under the circumstances set forth in the regulations, create a rebuttable presumption of acquisition of control of the corporation.

Under current FRB regulations, the acquisition of 10% or more (but less than 25%) of the voting stock of a corporation would, under the circumstances set forth in the regulations, create a rebuttable presumption of acquisition of control of the corporation.

Financial Holding Company Status and Activities

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According to the Dodd-Frank Act and FRB policy, a financial or bank holding company is expected to act as a source of financial strength to each of its subsidiary banks and to commit resources to support each such subsidiary.

This support may be required at times when the parent holding company may not be able to provide such support.

This support may be

required at times when the parent holding company may not be able to provide such support.

Consistent with the “source of strength” policy, the FRB has stated that, as a matter of prudent banking, a bank or financial holding company generally should not maintain a rate of cash dividends unless its net income has been sufficient to fully fund the dividends and the prospective rate of earnings retention appears to be consistent with our capital needs, asset quality and overall financial condition.

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Assessment rates, which declined for all banks when the reserve ratio first surpassed 1.15% in the third quarter of 2016, increased for all insurance depository institutions by 2 basis points in the first quarter of 2023.

The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the DIF reaches the statutory minimum of 1.35 % by the statutory deadline of September 30, 2028.

Assessment rates will remain in effect unless and until the reserve ratio meets or exceeds 2%.

The reserve ratio was 1.42% as of December 31, 2025.

In addition, the Tax Cuts and Jobs Act of 2017 (TCJA) disallows the deduction of FDIC deposit insurance premium payments for banking organizations with total consolidated assets of $50 billion or more.

For banks with less than $50 billion in total consolidated assets, such as FNBPA, the premium deduction is phased-out based on the proportion of the bank’s assets exceeding $10 billion.

Banks with more than $50 billion in total consolidated assets, such as FNBPA, are not eligible to deduct FDIC deposit insurance premium payments for U.S.

federal income tax purposes.

For banks with less than $50 billion in total consolidated assets, the premium deduction is phased-out based on the proportion of the bank’s assets exceeding $10 billion.

The FDIC issued a final rule in November 2023 to implement a special assessment on banks with over $5 billion in total assets to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank during the first quarter of 2023.

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FNBPA recognized the entire initial special assessment expense of $29.9 million in the fourth quarter of 2023.

The special assessment is not considered an FDIC premium under the TCJA and therefore is tax deductible for federal income tax purposes.

amounts of Silicon Valley Bank and Signature Bank after the termination of the receiverships.

The special assessment is not considered an FDIC premium under the Tax Cuts and Jobs Act of 2017 (TCJA) and therefore is tax deductible for federal income tax purposes.

The FDIC retained the ability to extend the special assessment collection period or impose a one-time shortfall special assessment if the amount collected by the special assessment does not meet the final loss amounts of Silicon Valley Bank and Signature Bank after the termination of the receiverships.

During 2024, the FDIC revised its loss estimate and projected that the special assessment would be collected for an additional two quarters beyond its initial eight-quarter collection period.

As a result, FNBPA recognized an additional special assessment charge of $5.2 million in 2024.

On December 16, 2025, the FDIC indicated that the special assessment would be fully recovered in the eighth assessment quarter and issued an interim final rule to reduce the special assessment rate for the eighth and final collection quarter, resulting in a $5.6 million reduction to our FDIC special assessment in 2025.

Brokered Deposits .

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The FRB has also proposed that the interchange rate cap will be automatically updated every two years based on the data collected from issuers.

Comments were due in May 2024, and the FRB has not yet finalized the proposal.

In August 2025, a Federal District Court in North Dakota vacated the FRB’s existing interchange fee limit rules on the grounds that the FRB exceeded its authority when issuing the caps by considering costs to debit card issuers that it was not permitted to consider under the Dodd-Frank Act.

The District Court’s ruling is stayed pending appeal, and it is not clear what effect, if any, the ruling will have on the FRB’s pending proposal.

Resolution Planning

On June 20, 2024, the FDIC released a final rule that requires covered IDIs to develop and submit detailed plans demonstrating how they could be resolved in an orderly and timely manner in the event of receivership.

IDIs with total assets of $100 billion or more are required to submit full resolution plans, and IDIs with total assets of $50 billion or more, but less than $100 billion are required to submit more limited informational filings.

Under the final rule, if the FDIC deemed a resolution plan or informational filing not credible and the IDI failed to resubmit a credible plan, the IDI could become subject to an enforcement action.

FNBPA currently has total consolidated assets of less than $50 billion and is not currently subject to the final rule.

However, by imposing additional costs on IDIs with $50 billion or more in total consolidated assets, the final rule reduces the benefits of growth beyond that size for a bank that has less than $50 billion in total consolidated assets, such as FNBPA.

The FDIC requires certain IDIs with more than $50 billion in total consolidated assets to submit to the FDIC periodic plans for resolution in the event of the institution’s failure.

In June 2024, the FDIC finalized amendments to the resolution planning requirements for IDIs with $50 billion or more in total assets.

The amendments require IDIs with between $50 billion and $100 billion in assets, which includes FNBPA, to submit informational filings on a three-year cycle, with an interim supplement updating key information submitted in the off years.

The final rule became effective October 1, 2024.

On April 18, 2025, the FDIC announced it was waiving the requirement for covered IDIs to submit content that required speculative analysis or information that was of relatively low value and released Frequently Asked Questions that clarified its approach to reviewing plan submissions under the 2024 rule.

Additionally, on December 31, 2025, the FDIC announced that it plans to propose changes to the covered IDI rule in 2026 to codify the content waivers provided in April 2025 and to ensure that the information most critical to supporting the FDIC’s ability to execute a rapid, low-cost failed bank resolution under the FDI Act is available to the FDIC in covered IDI plans, while eliminating requirements that might distract from this objective or that otherwise provide relatively low value.

The FDIC also stated that institutions that become covered IDIs prior to the issuance of a final rule will not be required to file plans until a final rule is issued.

FNBPA is not a covered IDI but may become one if the average of its total assets on its four most recent Consolidated Reports of Condition and Income exceeds $50 billion.

Community Reinvestment Act and Fair Lending

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Furthermore, federal banking regulators take into account CRA ratings when considering acquisitions of control and new activities.

In its most recent CRA examination, FNBPA received an “Outstanding” rating.

On October 24, 2023, the federal banking agencies issued a joint final rule that makes extensive amendments to the regulations that implement the CRA.

The agencies’ stated goal in issuing the Final Rule was to “strengthen and modernize” the CRA regulations.

Under the new requirements, FNB would be subject to new performance tests that could make it difficult to achieve a “Satisfactory” or “Outstanding” rating.

The final rule also would establish new standardized metrics and quantitative standards for evaluating banks’ CRA performance under various performance tests.

The new requirements would include an extensive overhaul of the current data collection, calculations and reporting under the existing CRA rule and would require additional costs to come into compliance.

Industry organizations have challenged the final rule in court, and on March 29, 2024, the U.S.

District Court for the Northern District of Texas granted an injunction and stay of the final rule.

The final outcome of such challenge is uncertain.

Fair lending laws prohibit discrimination in the provision of banking services, and the enforcement of these laws has been an increasing focus for the OCC, DOJ, CFPB, HUD, and other regulators.

Fair lending laws include the ECOA and the Fair Housing Act, which outlaw discrimination in credit and residential real estate transactions on the basis of prohibited factors including, among others, race, color, national origin, gender, and religion.

A lender may be liable for policies that result in a disparate treatment of or have a disparate impact on a protected class of applicants or borrowers.

If a pattern or practice of lending discrimination is alleged by a regulator, then that agency may refer the matter to the DOJ for investigation.

The OCC's most recent publication of FNBPA's CRA performance evaluation is an “Outstanding” rating.

In October 2023, the FDIC, FRB and OCC issued a joint final rule to modernize their respective CRA regulations.

The revised rules substantially alter the methodology for assessing compliance with the CRA, with material aspects taking effect on January 1, 2026, and revised data reporting requirements taking effect on January 1, 2027.

The final rule is currently enjoined while a federal court considers a lawsuit challenging the rule, and in July 2025, the agencies issued a joint notice of proposed rulemaking to rescind the final rule and replace it with regulations substantively identical to those in effect on March 29, 2024.

In October 2021, the DOJ announced an initiative to combat redlining through utilization of its fair lending prosecutorial authority and has announced the settlement of a number of bank investigations concerning redlining and other violations of the fair lending laws, including a February 5, 2024 announcement that Yadkin Bank (Yadkin) and its successor by merger, FNBPA, reached a settlement with the DOJ and the State of North Carolina to resolve their fair lending allegations related to the assessment of mortgage lending activities during a five-year period in the Winston-Salem and Charlotte, North Carolina majority Black and Hispanic census tracts (MBHCTs) that began prior to Yadkin’s merger with FNBPA in March 2017.

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FNBPA is required to have a fair lending program that is of sufficient scope to monitor fair lending and that appropriately remediates issues which were identified during the DOJ investigation as well as add additional branches and increase marketing and mortgage and home equity loan subsidies in these MBHCTs.

Specifically, pursuant to the settlement agreement, FNBPA will invest a minimum of $11.75 million in a mortgage loan subsidy fund over a five-year period, leveraging its previously announced commitment to underserved communities across its footprint, including those located in the Charlotte and Winston-Salem markets.

FNBPA has also agreed to spend approximately $1.75 million over the five-year period on community partnerships, advertising, community outreach and consumer education.

FNBPA has also agreed to open three new branch offices in predominantly Black and Hispanic neighborhoods, with two in Charlotte and one in Winston Salem, North Carolina.

Specifically, leveraging its previously announced and longstanding commitment to underserved communities across its footprint (including Charlotte and Winston Salem North Carolina), FNBPA entered into settlement agreements with the DOJ and the North Carolina DOJ whereby it committed to invest a minimum of $11.75 million in a mortgage loan subsidy fund over a five-year period ending in 2029.

Effective January 2026, FNBPA had fully deployed the $11.75 million mortgage subsidy in the Charlotte and Winston Salem MBHCTs.

FNBPA has also agreed to spend approximately $1.75 million over the five-year period on community partnerships, advertising, community outreach and consumer education, of which, FNBPA has also agreed to open three new branch offices in predominantly Black and Hispanic neighborhoods, with two in Charlotte and one in Winston Salem, North Carolina (two opened in 2025 and the third branch will soon begin the construction phase).

FNBPA believes the terms of the settlement agreement are consistent with its broad focus on promoting equity and economic prosperity in the markets that it serves.

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Consumer Protection Statutes and Regulations

FNBPA is subject to various federal consumer protection laws and regulations including the TILA, Truth in Savings Act, ECOA, Fair Housing Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Electronic Fund Transfer Act and Home Mortgage Disclosure Act, and regulations and guidance promulgated thereunder by the CFPB and the federal banking agencies, as well as certain state consumer protection requirements.

FNBPA is subject to various federal consumer protection laws and regulations including the Truth in Lending Act, Truth in Savings Act, ECOA, Fair Housing Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Electronic Fund Transfer Act and Home Mortgage Disclosure Act, and regulations and guidance promulgated thereunder by the CFPB and the federal banking agencies, as well as certain state consumer protection requirements.

Among other things, these laws and regulations:

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We have incurred and may in the future incur additional costs in complying with the above-identified consumer requirements.

In addition, there is continued uncertainty about the CFPB’s priorities and how they will change under the Trump Administration.

For example, in February 2025, the Acting Director of the CFPB instructed agency staff to pause most activity, including supervision and enforcement.

In addition, there is continued uncertainty about the CFPB’s priorities under the current U.S.

administration.

For example, in February 2025, the Acting Director of the CFPB instructed agency staff to pause most activity, including supervision and

While it is presently unclear when and to what extent the CFPB will resume its activities, other governmental authorities, including state attorneys general or banking regulators, may seek to increase their regulation, supervision, and enforcement of providers of consumer financial products and services in response to changes at the CFPB.

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The definition of a "covered cyber-incident" will be determined by CISA rulemaking, but SACA provides that, at a minimum, an incident must be reported if it:

(1) leads to "substantial loss of confidentiality, integrity, or availability" of an

information system or network or a "serious impact on the safety and resiliency of operational systems and processes";

(1) leads to "substantial loss of confidentiality, integrity, or availability" of an information system or network or a "serious impact on the safety and resiliency of operational systems and processes";

(2) causes a "disruption of business or industrial operations, including due to a denial of service attack, ransomware attack, or exploitation of a zero day vulnerability" against an information system or network, or an operational technology system or process;

or (3) involves "unauthorized access or disruption of business or industrial operations" due to a "compromise of a cloud service provider, managed service provider, or other third-party data hosting provider or by a supply chain compromise".

In addition, in July 2023, the SEC issued a final rule that requires disclosure of material cybersecurity incidents, as well as cybersecurity risk management, strategy and governance.

In addition, in July 2023, the SEC issued a final rule that requires prompt disclosure of material cybersecurity incidents, as well as annual disclosures regarding cybersecurity risk management, strategy and governance.

Anti-Money Laundering Initiatives and the USA PATRIOT Act

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing.

The USA PATRIOT Act of 2001 (USA PATRIOT Act), which amended the Bank Secrecy Act of 1970 (BSA), substantially broadened the scope of U.S.

The USA PATRIOT Act of 2001 (USA PATRIOT Act), which amended the BSA, substantially broadened the scope of U.S.

anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the U.S.

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In addition, absent an applicable exclusion, banks must identify and verify the identity of the beneficial owners of all legal entity customers at the time a new account is established.

The failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal, including criminal law enforcement, and reputational consequences for the institution.

The failure of a financial institution to maintain and

implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal, including criminal law enforcement, and reputational consequences for the institution.

Federal regulators evaluate the effectiveness of an applicant in combating money laundering when determining whether to approve a proposed bank merger, acquisition, restructuring, or other expansionary activity.

There have been a number of significant enforcement actions by regulators, as well as state attorneys general and the DOJ, against banks, broker-dealers and non-bank financial institutions with respect to these laws and some have resulted in substantial penalties, including criminal pleas.

FNB and its subsidiaries have implemented policies and procedures that it believes comply with these laws.

On January 1, 2021, Congress passed the National Defense Authorization Act, which enacted the most significant overhaul of the BSA and related anti-money laundering laws since the USA PATRIOT Act.

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and (v) expanded duties and powers of FinCEN.

On March 31, 2025, FinCEN issued an interim final rule that largely eliminated the beneficial ownership collection requirements with respect to U.S.

companies and U.S.

Office of Foreign Assets Control Regulation

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These are sometimes known as the “OFAC rules” because they are administered by the UST Office of Foreign Assets Control (OFAC).

The OFAC-administered sanctions target countries in various ways.

The OFAC-administered sanctions target countries and territories in various ways.

Generally, however, they contain one or more of the following elements:

(i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country, and prohibitions on “U.S.

persons” engaging in financial transactions which relate to investments in, or providing investment-related advice or assistance to, a sanctioned country;

and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S.

jurisdiction (including property in the possession or control of U.S.

(i) restrictions on trade with or investment in a sanctioned country/territory, including prohibitions against direct or indirect imports from and exports to a sanctioned country, and prohibitions on engaging in transactions to or from (including investments in, or providing investment-related advice or assistance to) a sanctioned country/territory;

and (ii) prohibition on dealing with, and a requirement to block assets of, specified individuals, entities, or governments.

Blocked assets (such as property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC.

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In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements.

In June 2010, the FRB and FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.

This guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles

that a banking organization’s incentive compensation arrangements should (i) provide incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risk, (ii) be compatible with effective controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.

The federal banking agencies have issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.

This guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risk, (ii) be compatible with effective controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.

During the second quarter of 2016, the U.S.

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The findings of the supervisory initiatives will be included in reports of examination.

Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions.

Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and

take other actions.

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

The scope and content of federal bank regulatory agencies’ policies on executive compensation are continuing to develop and are likely to continue evolving in the future.

In October 2023, the NYSE adopted a rule as required by the SEC’s 2022 rulemaking that requires listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding a required accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

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Investment Advisers Act

FNBIA is a registered investment adviser under the Investment Advisers Act of 1940 (the Investment Advisers Act) and as such is supervised by the SEC.

The Investment Advisers Act imposes numerous obligations on registered investment advisers, including record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities.

The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act, ranging from fines and censure to termination of an investment adviser’s registration.

Investment advisers also are subject to certain state securities laws and regulations.

Noncompliance with the Investment Advisers Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines and reputation damage.

Until December 31, 2025, FNBIA operated as an investment adviser under the Investment Advisers Act and as such was supervised by the SEC and subject to various legal and regulatory obligations (e.g., record keeping, operational and marketing requirements, disclosure requirements, etc.).

FNBIA ceased operations and deregistered as an investment adviser effective December 31, 2025.

Although we no longer have a subsidiary that is registered as an investment adviser with the SEC, violations of the Investment Advisers Act by FNB or our subsidiaries (including past violations by FNBIA), could result in investigations, sanctions, fines, disgorgement and reputational damage.

Standard of Care

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Various states have also proposed, or adopted, laws and regulations seeking to impose new standards of conduct on broker-dealers that may differ from the SEC's regulations, which may lead to additional implementation costs.

In April 2024, the Department of Labor (DOL) issued a final rule significantly expanding the definition of “investment advice fiduciary” under ERISA, as amended.

In related rulemakings, the DOL also finalized amendments to several class prohibited transaction exemptions (PTE), which exempt certain compensation arrangements that would otherwise be prohibited.

In July 2024, two federal district courts separately issued nationwide stays of the effective date of the final rule and PTE amendments pending consideration of the merits.

We are monitoring the legal activity while continuing to evaluate the impact these new rules could have on our business.

If the rules become effective as promulgated, we expect compliance will require us to alter certain of our business practices and impose additional costs.

In April 2024, the Department of Labor (DOL) issued a final rule significantly expanding the definition of “investment advice fiduciary” under ERISA, as well as amendments to certain prohibited transaction class exemptions (PTEs).

Two federal district courts separately issued nationwide stays of the effective date of the final rule and PTE amendments pending consideration of the merits, which the DOL has since declined to appeal.

In September 2025, the DOL announced it would be revisiting the definition of "investment fiduciary" with the objective of issuing a new rule in 2026.

As of the date of this filing, the DOL has not published a proposed new rule.

We will continue to monitor developments in this regard, as well as other related regulatory and legislative matters, including regarding environmental, social and governance matters and alternative assets investing under ERISA, and evaluate any potential impacts to our business.

Insurance Agencies

FNIA is subject to licensing requirements and extensive regulation under the laws of the Commonwealth of Pennsylvania and the various states in which FNIA conducts its insurance agency business.

Certain FNB subsidiaries are subject to licensing requirements and extensive regulation under the laws of the Commonwealth of Pennsylvania and the various states in which they conduct insurance agency business.

Insurance activities are subject to regulation by the states in which such business is transacted.

These laws and regulations are primarily for the protection of policyholders.

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Heightened Standards for Risk Management Governance

The OCC’s Heightened Standards establish guidelines for the governance and risk management practices of OCC-regulated institutions with total consolidated assets of $50 billion or greater.

These Heightened Standards require covered banks to establish and adhere to a written governance framework in order to manage and control their risk-taking activities, provide standards for covered banks’ boards of directors to oversee the risk governance framework, and describe the appropriate risk management roles and responsibilities of front line units, independent risk management, and internal audit functions.

FNBPA currently has total consolidated assets of $48.4 billion and is currently preparing to meet the requirements of Heightened Standards.

Establishing this framework comes with additional costs on OCC-regulated institutions with $50 billion or more in total consolidated assets.

The OCC’s Heightened Standards establish guidelines for the governance and risk management practices of OCC-regulated institutions with average total consolidated assets of $50 billion or greater.

These Heightened Standards require covered banks to establish and adhere to a written risk management governance framework in order to manage and control their risk-taking activities, provide standards for covered banks’ boards of directors to oversee the risk governance framework, and describe the appropriate risk management roles and responsibilities of front line units, independent risk management, and internal audit functions.

FNBPA currently has total consolidated assets of $50 billion and has made substantial progress implementing the necessary enhancements to strengthen risk management and governance practices required for compliance to Heightened Standards.

The remaining work will be completed in 2026, with focus on maturing risk management framework execution, continuous process improvement, and optimization through the deployment of technology capabilities.

Establishing this risk management framework entailed additional costs for OCC-regulated institutions preparing to comply with the Heightened Standards Guidelines.

On December 23, 2025, the OCC issued a proposal for comment in the Federal Register to amend the Heightened Standards requirements to increase the average total consolidated assets threshold for applying the guidelines from $50 billion to $700 billion.

Monetary Policy

The operations of FNB and our subsidiaries are affected not only by general economic conditions, but also by the policies of various regulatory authorities and the current Presidential Administration.

The operations of FNB and our subsidiaries are affected not only by general economic conditions, but also by the policies of various regulatory authorities and the current U.S.

administration.

In particular, the FRB regulates monetary policy and interest rates in order to influence general economic conditions.

These policies have a significant influence on overall growth and distribution of loans, investments and deposits and affect interest rates charged on loans or paid for deposits.

Throughout 2022 and 2023, the FRB raised the target range for the federal funds rate in an effort to curb inflation.

From September 2024 to December 2024, the FOMC lowered the target range for the federal funds rate by 100 basis points to a range of 4.25% to 4.50%.

FRB monetary policies have had a significant effect on the operating results of all financial institutions in the past and may continue to do so in the future.

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

What changed 10-K

Item 1. Business