What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-03-01 · 420 added, 278 removed, 1867 unchanged (27% of the section changed)

22 unchanged sentences

Federal funds purchased — 240,000

Federal Home Loan Bank advances 1,100,000 1,250,000

FHLB advances 850,000 1,100,000

Senior debt and subordinated debt 367,316 535,384

5 unchanged sentences

SHAREHOLDERS' EQUITY

Preferred stock, no par value, 10,000,000 shares authorized, Series A, 200,000 shares authorized and issued as of December 31, 2023 and 2022, liquidation preference of $ 1,000 per share

Preferred stock, no par value, 10,000,000 shares authorized, Series A, 200,000 shares issued as of December 31, 2024 and 2023, liquidation preference of $ 1,000 per share

192,878 192,878

20 unchanged sentences

Federal funds purchased 2,881 30,417 2,967

Federal Home Loan Bank advances 46,965 7,334 2,286

FHLB advances 37,793 46,965 7,334

Senior debt and subordinated debt 20,255 21,361 22,257

9 unchanged sentences

Mortgage banking 13,943 10,388 14,204

Gain on acquisition, net of tax 36,996 — —

Other 19,846 14,125 14,835

Non-Interest Income Before Investment Securities Gains, Net 228,411 227,157 240,229

Non-Interest Income Before Investment Securities Gains (Losses), Net 296,014 228,411 227,157

Investment securities gains (losses), net ( 20,283 ) ( 733 ) ( 27 )

7 unchanged sentences

Equipment 17,850 14,390 14,033

Marketing 9,004 6,885 5,275

Professional fees 8,392 9,123 9,647

Intangible amortization 17,830 2,944 1,731

Debt extinguishment cost — — 33,249

Merger-related expenses — 10,328 —

Professional fees 10,857 8,392 9,123

Marketing 8,958 9,004 6,885

Acquisition-related expenses 37,635 — 10,328

Other 62,184 69,281 68,595

15 unchanged sentences

Unrealized gains (losses) on AFS investment securities:

Net unrealized holding gains (losses) on securities 36,023 ( 312,169 ) ( 17,948 )

Reclassification adjustment for securities gains (losses) included in net income ( 567 ) ( 20 ) ( 25,905 )

Net unrealized holding gains (losses) ( 22,425 ) 36,023 ( 312,169 )

Reclassification adjustment for securities net change realized in net income 15,689 ( 567 ) ( 20 )

Amortization of net unrealized gains (losses) on AFS securities transferred to HTM 5,609 5,913 ( 44,483 )

Net Unrealized Gains (Losses) on AFS Investment Securities ( 1,127 ) 41,369 ( 356,672 )

Unrealized (losses) gains on interest rate derivatives used in cash flow hedges:

Net unrealized holding losses arising during the period 6,998 ( 62,963 ) ( 2,670 )

Reclassification adjustment for net gains (losses) realized in net income 19,995 6,004 ( 2,147 )

Unrealized gains (losses) on interest rate derivatives used in cash flow hedges:

Net unrealized holding gains (losses) 590 6,998 ( 62,963 )

Reclassification adjustment for net change realized in net income 18,141 19,995 6,004

Net Unrealized Gains (Losses) on Interest Rate Derivatives Used in Cash Flow Hedges 18,731 26,993 ( 56,959 )

2 unchanged sentences

Amortization of net unrecognized pension and postretirement income (loss) ( 422 ) 57 100

Net unrealized (losses) gains on defined benefit pension and postretirement plans 4,834 744 8,300

Other Comprehensive Income (Loss) 73,196 ( 412,887 ) ( 37,680 )

Total Comprehensive Income (Loss) $ 357,476 $ ( 125,906 ) $ 237,817

Net Unrealized Gains (Losses) on Defined Benefit Pension and Postretirement Plans 6,857 4,834 744

Other Comprehensive Income (Loss), Net of Tax 24,461 73,196 ( 412,887 )

Total Comprehensive Income $ 313,204 $ 357,476 $ ( 125,906 )

See Notes to Consolidated Financial Statements

13 unchanged sentences

Dividend reinvestment activity 362 85 5,149 5,234

Reissuance of treasury stock pursuant to acquisition 6,209 4,547 85,166 89,713

Stock-based compensation awards (repurchases) 277 1,092 13,658 ( 2,438 ) 12,312

Acquisition of treasury stock ( 2,803 ) ( 43,909 ) ( 43,909 )

Preferred stock dividend ( 10,248 ) ( 10,248 )

3 unchanged sentences

Net income 284,280 284,280

Other comprehensive loss ( 412,887 ) ( 412,887 )

Other comprehensive income 73,196 73,196

Common stock issued (1)

2 unchanged sentences

Stock-based compensation awards (repurchases) 592 2,313 8,604 ( 3,936 ) 6,981

Reissuance of treasury stock pursuant to acquisition 6,209 4,547 85,166 89,713

Acquisition of treasury stock ( 5,029 ) ( 77,056 ) ( 77,056 )

Preferred stock dividend ( 10,248 ) ( 10,248 )

14 unchanged sentences

(1) Issuance of common stock includes issuance in connection with the Corporation's ESPP and exercised stock options.

(2) Issuance of common stock includes the issuance of 19,166,667 shares of common stock in an underwritten public offering that closed on May 1, 2024, issuance in

connection with the Corporation’s ESPP and exercised stock options.

See Notes to Consolidated Financial Statements

8 unchanged sentences

Net amortization of investment securities premiums 764 11,231 12,824

Investment securities losses (gains), net 733 27 ( 33,516 )

Net accretion of loan discounts ( 38,748 ) — —

Investment securities losses, net 20,283 733 27

Gain on sales of mortgage loans held for sale ( 8,186 ) ( 5,094 ) ( 8,816 )

3 unchanged sentences

Amortization of issuance costs and discounts on long-term borrowings 710 750 724

Debt extinguishment costs — — 33,249

Gain on acquisition, net of tax ( 36,996 ) — —

Gain on disposal of premises and equipment ( 30 ) — —

Gain on Sale-Leaseback Transaction ( 20,266 ) — —

Stock-based compensation 10,516 12,540 14,000

Change in deferred federal income tax 24,666 ( 117,849 ) ( 417 )

Net change in deferred income tax ( 23,187 ) 24,666 ( 117,849 )

Net change in accrued salaries and benefits 19,463 ( 5,868 ) 12,826

Change in life insurance cash surrender value ( 27,664 ) ( 95,702 ) ( 93,986 )

Net change in life insurance cash surrender value ( 19,872 ) ( 27,664 ) ( 95,702 )

Other changes, net 97,015 ( 16,825 ) 392,503

7 unchanged sentences

Purchase of HTM securities ( 177,947 ) — ( 30,959 )

Sale of Visa Shares — — 33,962

Net change in FRB and FHLB stock 22,762 5,781 ( 72,551 )

2 unchanged sentences

Settlement of bank owned life insurance 2,687 2,264 3,474

Net cash paid for acquisition — ( 21,811 ) ( 1,982 )

Proceeds from Sale-Leaseback Transaction 51,123 — —

Net cash received (paid) for acquisitions 1,018,371 — ( 21,811 )

Net change in tax credit investments ( 42,699 ) ( 26,753 ) ( 29,071 )

Net cash used in investing activities ( 809,215 ) ( 1,535,583 ) ( 210,086 )

Net Cash Provided by (Used in) Investing Activities 1,629,332 ( 809,215 ) ( 1,535,583 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Net change in time deposits and brokered deposits 1,074 2,086,307 ( 257,823 )

Net (decrease) increase in other borrowings ( 379,431 ) 1,629,870 ( 212,682 )

Net change in other borrowings ( 1,951,161 ) ( 379,431 ) 1,629,870

Repayments of senior debt and subordinated debt ( 168,778 ) ( 5,000 ) ( 81,496 )

Net proceeds from issuance of common stock 3,160 7,876 7,437

Net proceeds from common stock 270,582 3,160 7,876

Dividends paid ( 131,698 ) ( 115,738 ) ( 116,009 )

Acquisition of treasury stock ( 30,348 ) ( 77,056 ) —

Net cash provided by (used in) financing activities 314,020 ( 15,901 ) ( 337,523 )

Net decrease in Cash and Cash Equivalents ( 132,211 ) ( 956,693 ) ( 209,218 )

Net Cash (Used in) Provided by Financing Activities ( 1,531,736 ) 314,020 ( 15,901 )

Net increase (decrease) in Cash and Cash Equivalents 514,161 ( 132,211 ) ( 956,693 )

Cash and Cash Equivalents at Beginning of Period 549,710 681,921 1,638,614

6 unchanged sentences

Transfer of AFS securities to HTM securities $ — $ — $ 479,008

Fair value of tangible assets acquired 4,707,290 — —

Intangible assets 92,600 — —

Liabilities assumed 5,561,979 — —

PCD Loans credit discount 54,631 — —

See Notes to Consolidated Financial Statements

29 unchanged sentences

however, since the investment portfolio serves as a source of liquidity, most debt securities are classified as AFS.

AFS securities are carried at estimated fair value with the related unrealized holding gains and losses reported in shareholders' equity as a component of OCI, net of tax.

AFS securities are carried at estimated fair value with the related unrealized holding gains and losses reported in shareholders' equity as a component of AOCI, net of tax.

Realized securities gains and losses are computed using the specific identification method and are recorded on a trade date basis.

50 unchanged sentences

The ACL is determined for two distinct categories of loans:

1) loans evaluated collectively for expected credit losses and 2) loans evaluated individually for expected credit losses.

(i) loans evaluated collectively for expected credit losses and (ii) loans evaluated individually for expected credit losses.

Loans Evaluated Collectively :

18 unchanged sentences

Loans evaluated individually for expected credit losses include loans on non-accrual status where the commitment amount equals or exceeds $1.0 million.

The required ACL for such loans is determined using either the present value of expected future cash flows, observable market price or the fair value of collateral.

The required ACL for such loans is determined using the present value of expected future cash flows, observable market price or the fair value of collateral.

Loans evaluated individually may have specific allocations of the ACL assigned if the measured value of the loan using one of the noted techniques is less than its current carrying value.

127 unchanged sentences

Stock-Based Compensation:

The Corporation grants equity awards to employees, consisting of stock options, restricted stock, RSUs and PSUs under its Employee Equity Plan.

The Corporation grants equity awards to employees, consisting of restricted stock, RSUs and PSUs under its Employee Equity Plan.

In addition, employees may purchase stock under the Corporation's ESPP.

1 unchanged sentence

Under the Directors' Plan, the Corporation can grant equity awards to non-employee

holding company and subsidiary bank directors in the form of stock options, restricted stock, RSUs or common stock.

holding company and subsidiary bank directors in the form of restricted stock, RSUs or common stock.

Recent grants of equity awards under the Directors' Plan have been limited to RSUs.

10 unchanged sentences

The Corporation has not issued stock options since 2014 and accordingly, there is no compensation expense for this instrument.

All stock options have been exercised or expired during 2024.

Disclosures about Segments of an Enterprise and Related Information:

The Corporation does not have any operating segments which require disclosure of additional information.

Fulton Financial Corporation is a single segment.

The Corporation's Chief Operating Decision Maker reviews consolidated results on a GAAP basis.

Financial Guarantees :

5 unchanged sentences

Any purchase price exceeding the fair value of net assets acquired is recorded as goodwill.

Any purchase price lower than the fair value of net assets acquired is recorded as a gain on acquisition, net of tax.

Goodwill is not amortized to expense, but is evaluated for impairment at least annually.

39 unchanged sentences

Consists of income from trust commissions, brokerage, money market and insurance commissions.

Trust commissions consists of advisory fees that are based on market values of clients' managed portfolios and transaction fees for fiduciary services performed, both of which are recognized when earned.

Trust commissions consist of advisory fees that are based on market values of clients' managed portfolios and transaction fees for fiduciary services performed, both of which are recognized when earned.

Brokerage income includes advisory fees which are recognized when earned on a monthly basis and transaction fees that are recognized when transactions occur.

35 unchanged sentences

Under the acquisition method, identifiable assets acquired and liabilities assumed are measured at fair value as of the acquisition date.

The difference between the purchase price and the fair value of net assets acquired is recorded as goodwill.

The difference between the purchase price and the fair value of net assets acquired is recorded as goodwill, unless the acquisition is a bargain purchase.

Results of the operations of the acquired entity are included in the consolidated statement of income from the acquisition date.

1 unchanged sentence

Recently Adopted Accounting Standards

In March 2022, FASB issued ASU 2022-01 Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method ("ASU 2022-01") .

This update addresses questions regarding the last-of-layer method arising from the issuance of ASU 2017-12 and permits more flexibility in hedging interest rate risk for both variable-rate and fixed-rate financial instruments and introduces the ability to hedge risk components for non-financial hedges.

The Corporation adopted ASU 2022-01 on January 1, 2023, and it did not have a material impact on its consolidated financial statements.

In March 2022, FASB issued ASU 2022-02 Financial Instruments - Credit Losses (Topic 326) ("ASU 2022-02").

This update reduces the complexity of accounting for TDRs by eliminating certain accounting guidance, enhancing disclosures and improving the consistency of vintage disclosures.

The Corporation adopted ASU 2022-02 on January 1, 2023, and it did not have a material impact on its consolidated financial statements.

In September 2022, FASB issued ASU 2022-04 Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations ("ASU 2022-04").

This update enhances transparency in the disclosure of supplier finance programs, which previously had no explicit requirements under GAAP.

In June 2022, FASB issued ASU 2022-03 Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03") .

This update clarifies how the fair value of equity securities subject to contractual sale restrictions is determined and requires additional qualitative and quantitative disclosures for equity securities with contractual sale restrictions.

The Corporation adopted ASU 2022-03 on January 1, 2024, and it did not have a material impact on its consolidated financial statements.

In December 2022, FASB issued ASU 2022-06 Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

This update extends the sunset provision date of ASU 2020-04 Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") to December 31, 2024 .

The Corporation adopted ASU 2020-04 on June 30, 2023 and it did not have a material impact on its consolidated financial statements.

In March 2023, FASB issued ASU 2023-02 Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ("ASU 2023-02") .

This update allows any tax credit program that meets certain criteria to use the proportional amortization method.

The Corporation early adopted ASU 2023-02 using the modified retrospective method effective upon issuance, and it did not have a material impact on its consolidated financial statements.

In July 2023, FASB issued ASU 2023-03 Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC SAB No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and SAB Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock ("ASU 2023-03") .

This update amends certain SEC paragraphs from the Codification in response to (1) the issuance of SEC SAB 120;

(2) the SEC staff announcement at the March 24, 2022, EITF meeting;

and (3) SAB Topic 6.B, "Accounting Series Release No.

280 - General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock." ASU 2023-03 does not provide any new guidance so there is no transition or effective date associated with it.

In August 2023, FASB issued ASU 2023-04 Liabilities (Topic 405):

Amendments to SEC Paragraphs Pursuant to SEC SAB No.

121 ("ASU 2023-04") .

This update adjusts language in FASB ASC 405-10 to align with SEC SAB No.

121 relating to accounting for obligations to safeguard crypto-assets an entity holds for its platform users.

ASU 2023-24 does not provide any new guidance so there is no transition or effective date associated with it.

The Corporation currently does not have obligations to safeguard crypto-assets.

In October 2023, FASB issued ASU 2023-06 Disclosure Improvements ("ASU 2023-06").

This update adjusts language in FASB disclosure guidance to align with certain SEC disclosure requirements.

The Corporation adopted ASU 2023-06 upon issuance, and it did not have an impact on its consolidated financial statements.

Recently Issued Accounting Standards

In March 2023, FASB issued ASU 2023-01 Leases (Topic 842):

1 unchanged sentence

This update clarifies guidance for leases between related parties under common control .

The Corporation will adopt ASU 2023-01 on January 1, 2024.

The Corporation does not expect the adoption of ASU 2023-01 to have a material impact on its consolidated financial statements.

The Corporation adopted ASU 2023-01 on January 1, 2024, and it did not have a material impact on its consolidated financial statements.

In November 2023, FASB issued ASU 2023-07 Segment Reporting (Topic 280):

1 unchanged sentence

This update requires public entities with reportable segments to provide additional and more detailed disclosures.

The Corporation will adopt ASU 2023-07 on December 15, 2024.

The Corporation is not currently required to report segment information and, as such, does not expect the adoption of ASU 2023-07 to have an impact on its consolidated financial statements.

The Corporation adopted ASU 2023-07 on December 15, 2024, and it did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards

In December 2023, FASB issued ASU 2023-08 Intangibles – Goodwill and Other - Crypto Assets (Subtopic 350-60):

8 unchanged sentences

The Corporation will adopt ASU 2023-09 on January 1, 2025.

The Corporation does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

In March 2024, FASB issued ASU 2024-01 Compensation – Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards ("ASU 2024-01") .

This update provides guidance for profits interest and similar awards.

The Corporation will adopt ASU 2024-01 on January 1, 2025.

The Corporation does not expect the adoption of ASU 2024-01 to have a material impact on its consolidated financial statements.

In November 2024, FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03").

This update requires disaggregation of certain expenses in a note to the consolidated financial statements.

The Corporation will adopt ASU 2024-03 on January 25, 2027.

The Corporation does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

In November 2024, FASB issued ASU 2024-04 – Debt – Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments ("ASU 2024-04").

This update clarifies the requirements for determining whether settlement of convertible debt should be accounted for as induced conversion.

The Corporation will adopt ASU 2024-04 on January 1, 2026.

The Corporation does not expect the adoption of ASU 2024-04 to have an impact on its consolidated financial statements.

2 unchanged sentences

NOTE 2 - BUSINESS COMBINATIONS

On July 1, 2022, the Corporation completed its acquisition of Prudential Bancorp, a Pennsylvania chartered bank holding company headquartered in Philadelphia, Pennsylvania that primarily served the Greater Philadelphia region.

On that date, the Corporation acquired 100 % of the outstanding common stock of Prudential Bancorp, Prudential Bancorp was merged with and into the Corporation, and Prudential Bancorp's wholly-owned subsidiary, Prudential Bank, became a wholly-owned subsidiary of the Corporation.

The Corporation merged Prudential Bank with and into Fulton Bank in the fourth quarter of 2022.

Results of the operations of the acquired entity were included in the Corporation's consolidated financial statements beginning on July 1, 2022.

In accordance with the terms of the definitive merger agreement, each share of Prudential Bancorp's common stock issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive the Merger Consideration.

In the aggregate, approximately eighty percent (80%) of the Merger Consideration consisted of the Corporation's common stock with the remaining approximately twenty percent (20%) paid in cash.

The acquisition of Prudential Bancorp was accounted for as a business combination using the acquisition method of accounting, and accordingly, the assets acquired, the liabilities assumed, and consideration transferred were recorded at their estimated fair values as of the Merger date.

The $ 19.1 million excess of the Merger Consideration over the fair value of assets acquired was recorded as goodwill and is not amortizable or deductible for tax purposes.

The following table summarizes the consideration transferred and the fair values of identifiable assets acquired and liabilities assumed on July 1, 2022:

(dollars in thousands, except share data)

Consideration transferred:

Common stock shares issued ( 6,208,516 )

Cash paid to Prudential Bancorp shareholders 29,343

Value of consideration 119,056

On the Acquisition Date, Fulton Bank acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank from the FDIC, as receiver for Republic First Bank.

As part of the Republic First Transaction, the Bank acquired approximately $ 4.8 billion of assets of Republic First Bank and received approximately $ 0.8 billion of cash from the FDIC.

The Bank assumed approximately $ 5.6 billion of total liabilities of Republic First Bank.

The Bank did not enter into a loss sharing arrangement with the FDIC in connection with the Republic First Transaction.

As a result of the Republic First Transaction, the Bank enhanced its presence in Philadelphia, Pennsylvania and New Jersey.

The Republic First Transaction constitutes a business combination as defined by FASB ASC Topic 805, Business Combinations.

Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values as of the Acquisition Date.

The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows and market conditions at the time of the Republic First Transaction.

The Bank is awaiting conclusion of the customary final settlement process to determine whether certain assets and liabilities of Republic First Bank will be acquired by the Bank.

Until the settlement process is finalized, the preliminary gain on acquisition can be updated for a period not to exceed one year following the Acquisition Date.

The fair value estimates of assets acquired and liabilities assumed, provide a reasonable basis for determining the preliminary gain on acquisition.

During the fourth quarter of 2024, adjustments to the estimated fair values of certain assets acquired were recorded, resulting in a decrease of $ 2.7 million in the preliminary gain on acquisition, net of income taxes.

The excess of the estimated fair value of net assets acquired and the cash consideration received from the FDIC over the estimated fair value of liabilities assumed was recorded as a preliminary gain on acquisition of $ 37.0 million, net of income taxes.

The following table summarizes the consideration transferred and the estimated fair values of identifiable assets acquired and liabilities assumed in connection with the Republic First Transaction:

Estimated Fair Value

(dollars in thousands)

Cash payment received from FDIC $ 809,920

Assets acquired:

3 unchanged sentences

Premises and equipment 184

FHLB Stock 37,931

Accrued interest receivable 16,164

Other assets 10,179

3 unchanged sentences

Borrowings 1,413,751

Accrued interest payable 33,444

Other liabilities 2,641

1 unchanged sentence

Net assets acquired:

Goodwill resulting from the Merger $ 19,081

(1) Included a $ 30.5 million intercompany borrowing between Prudential Bank and Fulton Bank.

While the valuation of the acquired assets and liabilities were completed, fair value estimates related to the assets and liabilities from Prudential Bancorp were subject to adjustment for up to one year after the closing date of the Merger as additional information became available.

Included in the above table are adjustments of $2.8 million that occurred during the year ended December 31, 2023 resulting in a change to goodwill resulting from the Merger.

The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition and represents the excess purchase price over the estimated fair value of the net assets acquired from Prudential Bancorp.

The following table presents the change in goodwill during the period:

Gain on acquisition, before income taxes $ 47,831

Gain on acquisition, net of income taxes $ 36,996

In the fourth quarter of 2024, the Bank assumed 14 leases from the FDIC in accordance with the terms of the P and A Agreement.

Upon assignment of the leases, the Corporation recorded at fair market value, a $ 13.1 million ROU asset and a corresponding $ 14.4 million lease liability, with the $ 1.3 million difference recognized as a decrease to gain on acquisition, before income taxes.

Additionally, in the fourth quarter of 2024, the Bank purchased 15 premises and related property, plant and equipment in accordance with the P and A Agreement.

Upon the purchase, the Corporation recorded at fair market value, $ 21.7 million in premises and equipment, with a corresponding reduction of $ 1.0 million in gain on acquisition, before income taxes.

The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets

acquired and liabilities assumed.

Cash and due from banks:

The fair values of cash and due from banks approximate their book values.

Investment securities:

The investment portfolio acquired in the Republic First Transaction, with a fair value of $ 1.9 billion, was sold by the Corporation shortly after the Acquisition Date.

The fair value of the investment portfolio was based on the proceeds from the sale.

The Corporation recorded $ 2.5 billion of acquired loans that were initially recorded at their estimated fair values as of the Acquisition Date.

The estimated fair value for the loans was based on a discounted cash flow methodology that considered credit loss and prepayment expectations, market interest rates and other market factors from the perspective of a market participant.

Loan cash flows were generated on an individual loan basis.

The PD, LGD, exposure at default and prepayment assumptions are the key factors driving credit losses that are embedded in the estimated cash flows.

The following table presents information with respect to the estimated fair value and unpaid principal balance of acquired loans at the Acquisition Date:

April 26, 2024

Unpaid Principal Balance Estimated Fair Value

(dollars in thousands)

Goodwill at December 31, 2021 $ 534,266

Goodwill from the Merger 16,273

Goodwill at December 31, 2022 550,539

Adjustments to goodwill from the Merger 2,807

Goodwill at December 31, 2023 $ 553,346

Real estate - commercial mortgage $ 1,384,029 $ 1,234,409

Commercial and industrial 310,190 279,309

Real-estate - residential mortgage 947,144 752,331

Real-estate - home equity 90,882 84,369

Real-estate - construction 149,047 142,768

Consumer 2,638 2,624

Total acquired loans $ 2,883,930 $ 2,495,810

The following table summarizes PCD Loans acquired in the Republic First Transaction as of the Acquisition Date:

April 26, 2024

(dollars in thousands)

Book balance of loans with deteriorated credit quality at acquisition $ 1,014,559

Fair value of loans with deteriorated credit quality at acquisition 895,588

Fair value discount 118,971

PCD Loans credit discount ( 54,631 )

Non-credit discount $ 64,340

The Republic First Transaction resulted in the addition of $ 78.1 million to the ACL, including the $ 54.6 million identified in the table above for PCD Loans, and $ 23.4 million recorded through the provision for credit losses at the Acquisition Date for non-PCD Loans.

Intangible assets:

The Corporation recorded $ 92.6 million of CDI reflected in other assets that is being amortized over seven years using the sum-of-the-years'-digits method.

The estimated fair value of the CDI was determined using the cost savings approach.

The cost savings approach is defined as the difference between the cost of funds of core deposits and an alternative cost of funds for those deposits.

The CDI estimated fair value was determined by projecting discounted net cash flows that included assumptions related to customer attrition rates, discount rates, deposit interest rates, deposit account maintenance costs and alternative cost of funding rates.

The Corporation acquired $ 37.9 million of FHLB stock.

The estimated fair value of the FHLB stock approximated its book value.

Accrued interest receivable:

The Corporation acquired $ 16.2 million of accrued interest receivable.

The fair value of the accrued interest receivable approximated its book value.

Core deposits:

Demand deposits, savings and money market deposits and time deposits (less than $250,000) were recorded at book value which approximated fair value.

The Corporation recorded $ 92.6 million of CDI in other assets for these deposits.

Time deposits:

Time deposits of $250,000 and greater were valued based on a comparison with the contractual cost of a portfolio of brokered deposits having a similar tenor.

As the time deposit portfolio had a remaining average life of approximately three months, the estimated fair value of the time deposits approximated their book value and no adjustment was recorded.

Borrowings assumed in the Republic First Transaction, with a fair value of $ 1.4 billion, were repaid shortly after the Acquisition Date.

The fair value of borrowings was based on the repayment amounts.

Acquisition-related expenses:

The Corporation developed a comprehensive integration plan under which it incurred direct costs that are expensed as incurred.

Costs related to the Republic First Transaction are included in acquisition-related expenses in the unaudited Consolidated Statements of Income.

The following table details the costs identified and classified as acquisition-related expenses:

Year ended December 31, 2024

(dollars in thousands)

Salaries and employee benefits $ 2,023

Net occupancy 10,085

Professional fees 11,439

Charitable donation Charitable donation 5,000

In connection with the Republic First Transaction, Fulton Bank made a $ 5.0 million donation to the Fulton Forward Foundation

to provide additional impact grants to nonprofit community organizations across the region that share the Bank's vision of advancing economic empowerment, particularly in underserved communities.

During the fourth quarter of 2024, the Corporation closed 13 of the Bank's financial center offices and consolidated the operations of those offices into nearby financial center offices operated by the Bank.

The plan was adopted as part of the Bank's integration of the assets acquired and the deposits and certain other liabilities assumed in the Republic First Transaction.

The premises and equipment of the 13 locations included five locations owned by the Bank and eight locations leased by the Bank.

The Corporation recorded pre-tax costs of approximately $ 9.8 million reflected in acquisition-related expenses in the Consolidated Statements of Income for the year ended December 31, 2024, consisting of write-offs of premises and equipment and related expenses, and lease termination charges.

Unaudited Pro Forma Information:

The amount of net interest income, non-interest income, non-interest expense and net income of $ 111.4 million, $ 44.7 million, $ 71.9 million and $ 50.5 million, respectively, attributable to the Republic First Transaction were included in the Corporation's Consolidated Statements of Income for the year ended December 31, 2024.

Included in non-interest income above is $ 37.0 million related to the gain on acquisition, net of tax.

Net interest income, non-interest income, non-interest expense and net income shown above reflect management's best estimates based on information available.

Republic First Bank does not have historical financial information that the Corporation could base pro forma information.

Additionally, the Bank did not acquire all of the assets or assume all of the liabilities of Republic First Bank.

Therefore, it is impracticable to provide pro forma information on revenues and earnings for the Republic First Transaction in accordance with ASC 805-10-50-2.

Prudential Bancorp, Inc

On that date, the Corporation acquired 100 % of the outstanding common stock of Prudential Bancorp.

As of July 1, 2022, Prudential Bancorp had approximately $ 930.6 million in assets, $ 554.1 million in loans and $ 532.2 million in deposits after purchase accounting adjustments.

The common shareholders of Prudential received 0.7974 shares of Fulton Financial common stock and $ 3.65 cash for each Prudential Bancorp share they owned prior to the Merger.

The total consideration for the Merger was $ 119.1 million consisting of approximately 6,208,516 shares of the Corporation's common stock and $ 29.3 million in cash.

NOTE 3 - RESTRICTIONS ON CASH AND CASH EQUIVALENTS

6 unchanged sentences

Available for Sale

Government securities $ 42,475 $ — $ ( 314 ) $ 42,161

Government-sponsored agency securities 1,038 — ( 28 ) 1,010

State and municipal securities $ 960,227 $ 106 $ ( 145,446 ) $ 814,887

21 unchanged sentences

Total $ 1,267,922 $ — $ ( 195,715 ) $ 1,072,207

On May 1, 2022, the Corporation transferred certain residential mortgage-backed securities and commercial mortgage-backed securities from AFS to HTM classification as permitted by ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments .

The estimated fair value of the securities transferred was $ 415.2 million, and the amortized cost of the securities was $ 479.0 million.

In May 2024, the Corporation sold $345.7 million of AFS securities and recorded a pre-tax loss of $20.3 million.

The proceeds from the sale were reinvested into higher-yielding securities of a similar type and similar duration.

Securities carried at $ 0.3 billion and $ 0.4 billion at December 31, 2024 and 2023, respectively, were pledged as collateral to secure public and trust deposits.

The amortized cost and estimated fair values of debt securities as of December 31, 2024, by contractual maturity, are shown in the following table.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay with or without call or prepayment penalties.

Actual maturities may differ from contractual maturities because issuers may have the right to call or borrowers may have the right to prepay with or without call or prepayment penalties.

Available for Sale Held to Maturity

24 unchanged sentences

Less than 12 months 12 Months or Longer Total

Number of Securities Estimated

Fair Value Unrealized

Losses Estimated

Losses Number of Securities Estimated

Fair Value Unrealized

3 unchanged sentences

Available for Sale

Government securities $ — $ — $ 42,161 $ ( 314 ) $ 42,161 $ ( 314 )

Government-sponsored agency securities — — 1,010 ( 28 ) 1,010 ( 28 )

State and municipal securities 22 $ 53,026 $ ( 1,692 ) 272 $ 755,310 $ ( 143,754 ) $ 808,336 $ ( 145,446 )

8 unchanged sentences

Total held to maturity 7 $ 155,726 $ ( 1,754 ) 180 $ 1,008,973 $ ( 210,368 ) $ 1,164,699 $ ( 212,122 )

There were 727 AFS and 180 HTM positions at unrealized loss at December 31, 2023.

Less than 12 months 12 Months or Longer Total

Number of Securities Estimated

Fair Value Unrealized

Losses Estimated

Losses Number of Securities Estimated

Fair Value Unrealized

15 unchanged sentences

Total held to maturity — $ — $ — 180 $ 1,072,207 $ ( 195,715 ) $ 1,072,207 $ ( 195,715 )

There were 782 AFS and 180 HTM positions at unrealized loss at December 31, 2022.

The Corporation's collateralized mortgage obligations, residential mortgage-backed securities and commercial mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment.

3 unchanged sentences

government-sponsored agencies.

Therefore, the Corporation does not have an ACL for these investments as of December 31, 2023 and 2022.

Therefore, the Corporation does not have an ACL for these investments as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, no ACL was required for the Corporation's state and municipal securities.

The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

The majority of the corporate debt securities were rated at or above investment grade as of December 31, 2023 and 2022, respectively.

The Corporation does not have the intent to sell and does not believe it will be more likely than not to be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

Based on the payment status, rating and management's evaluation of these securities, no ACL was required for corporate debt securities as of December 31, 2023 and 2022.

Therefore, the Corporation did not record a loss on these investments as of December 31, 2024 and December 31, 2023, respectively.

The majority of the corporate debt securities were rated at or above investment grade as of December 31, 2024 and December 31, 2023.

Based on the payment status, rating and management's evaluation of these securities, no ACL was required for corporate debt securities as of December 31, 2024 and December 31, 2023.

The Corporation does not have the intent to sell and does not believe it will more likely than not to be required to sell any of these securities prior to a recovery of their fair value to

amortized cost, which may be at maturity.

Therefore, the Corporation did not record a loss on these investments as of December 31, 2024 and December 31, 2023.

NOTE 5 - LOANS AND ALLOWANCE FOR CREDIT LOSSES

12 unchanged sentences

Net loans $ 24,044,919 $ 21,351,094

(1) Includes unearned income of $ 41.0 thousand and $ 4.5 million at December 31, 2023 and December 31, 2022, respectively.

(1) Includes no unearned income for December 31, 2024 and $ 41.0 thousand at December 31, 2023.

(2) Includes unearned income of $ 35.6 million and $ 38.0 million at December 31, 2024 and December 31, 2023, respectively.

10 unchanged sentences

(1) Included in other liabilities on the Consolidated Balance Sheets.

The following table presents the activity in the ACL - loans balances for the years ended December 31:

The following table presents the activity in the ACL for the years ended December 31:

2024 2023 2022

1 unchanged sentence

Balance at beginning of period $ 293,404 $ 269,366 $ 249,001

CECL Day 1 Provision expense — 7,954 —

Initial purchased credit deteriorated loans — 1,135 —

CECL Day 1 Provision (1)

23,444 — 7,954

Initial PCD allowance for credit losses 54,631 — 1,135

Loans charged off ( 54,429 ) ( 39,201 ) ( 21,472 )

2 unchanged sentences

Provision for credit losses (1) (2)

52,122 53,110 18,656

Balance at end of period $ 379,156 $ 293,404 $ 269,366

The following table presents the activity in the ACL - loans losses by portfolio segment for the years ended December 31, 2023 and 2022, by portfolio segment:

Provision for OBS credit exposures (1)

$ ( 3,930 ) $ 926 $ 1,411

Reserve for OBS credit exposures $ 14,161 $ 17,254 $ 16,328

(1) The sum of these amounts are reflected in the provision for credit losses in the Consolidated Statements of Income.

(2) Provision only includes the portion related to net loans.

The following table presents the activity in the ACL by portfolio segment:

Real Estate -

Mortgage Commercial and Industrial Consumer and Real Estate -

Mortgage Commercial and Industrial Real Estate -

Mortgage Consumer and Real Estate -

Equity Real Estate -

Mortgage Real Estate -

Construction Leases and other loans Total

1 unchanged sentence

Balance at December 31, 2022 $ 69,456 $ 70,116 $ 83,250 $ 26,429 $ 10,743 $ 9,372 $ 269,366

CECL Day 1 Provision expense 4,107 — 131 3,716 — — 7,954

Initial purchased credit deteriorated loans 1,051 — 7 77 — — 1,135

Loans charged off ( 17,999 ) ( 9,246 ) ( 62 ) ( 7,514 ) — ( 4,380 ) ( 39,201 )

4 unchanged sentences

Balance at December 31, 2023 112,565 74,266 73,286 17,604 12,295 3,388 293,404

CECL Day 1 Provision (1)

6,648 1,121 14,920 445 310 — 23,444

Initial PCD allowance for credit losses 41,559 10,463 565 357 1,687 — 54,631

Loans charged off ( 13,186 ) ( 26,585 ) ( 1,472 ) ( 8,490 ) — ( 4,696 ) ( 54,429 )

4 unchanged sentences

Balance at December 31, 2024 $ 158,181 $ 92,212 $ 81,331 $ 19,397 $ 25,140 $ 2,895 $ 379,156

(1) These amounts are reflected in the provision for credit loss in the Consolidated Statements of Income.

(2) Provision included in the table only includes the portion related to net loans.

1 unchanged sentence

In determining qualitative adjustments, management considers changes in national, regional, and local economic and business conditions and their impact on the lending environment, including underwriting standards and other factors affecting credit losses over the remaining life of each loan.

The increase in ACL - loans in 2023 was largely due to loan growth, changes to the macroeconomic outlook, net charge-offs and risk migration.

The increase in ACL - loans in 2022 was primarily due to loan growth and changes to the macroeconomic outlook.

In 2023, the Corporation made updates to its PD and LGD models and methodology to enhance base quantitative ACL models.

The Corporation updated the PD models to utilize a linear regression methodology and implemented a discreet 24 month reasonable and supportable forecast period with a 12 month straight-line reversion methodology.

The ACL model enhancements did not have a material effect on the ACL as the model updates reduced reliance on supplementary models and qualitative factors and increased reliance on the output of the Corporation’s base quantitative models.

The increase in ACL in 2024 was largely due to loans acquired in the Republic First Transaction.

The increase in ACL in 2023 was primarily due to loan growth, changes to the macroeconomic outlook, net charge-offs and risk migration.

Collateral-Dependent Loans

A loan or a lease is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral.

For all classes of loans and leases deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell.

In most cases, the Corporation records a partial charge-off to reduce the collateral-dependent loan or lease's carrying value to the collateral’s fair value less cost to sell.

Substantially all of the collateral supporting collateral-dependent loans or leases consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging, agricultural land, and vacant land.

Commercial and industrial loans may also be secured by real estate.

All loans individually evaluated for impairment are measured for losses on a quarterly basis.

As of December 31, 2024 and 2023, substantially all of the Corporation's individually evaluated loans with total commitments greater than or equal to $ 1.0 million were measured based on the estimated fair value of each loan's collateral, if any.

Collateral could be in the form of real estate, in the case of commercial mortgages and construction loans, or business assets, such as accounts receivables or inventory, in the case of commercial and industrial loans.

Commercial and industrial loans may also be secured by real estate.

As of December 31, 2023 and 2022, approximately 78 % and 91 %, respectively, of loans evaluated individually for impairment with principal balances greater than or equal to $ 1.0 million, whose primary collateral consisted of real estate, were measured at estimated fair value using appraisals performed by certified third-party appraisers that had been updated in the preceding 12 months.

As of December 31, 2024 and 2023, approximately 90 % and 78 %, respectively, of loans evaluated individually for impairment with principal balances greater than or equal to $ 1.0 million, whose primary collateral consisted of real estate, were measured at estimated fair value using appraisals performed by state certified third-party appraisers that had been updated in the preceding 12 months.

Non-accrual Loans

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Maintaining an appropriate ACL is dependent on various factors, including the ability to identify potential problem loans in a timely manner.

For construction, commercial and industrial, and commercial real estate, an internal risk rating process is used.

For commercial construction loans, commercial and industrial loans, and commercial real estate loans, an internal risk rating process is used.

The Corporation believes that internal risk ratings are the most relevant credit quality indicator for these types of loans.

The migration of loans through the various internal risk categories is a significant component of the ACL methodology for these loans, which bases the probability of default on this migration.

The migration of loans through the various internal risk categories is a significant component of the ACL methodology for these loans, which bases the PD on this migration.

Assigning risk ratings involves judgment.

33 unchanged sentences

(1) Excludes real estate - construction - other.

Total loans risk- rated substandard or lower increased by $157.9 million, or 54.4%, compared to December 31, 2022, primarily due to borrower performance in both commercial and industrial loans and commercial real estate loans.

Total criticized and classified loans increased $911.4 million, or 98.5%, compared to December 31, 2023.

The increase of $454.6 million in special mention loans as of December 31, 2024 was primarily due to loans acquired in the Republic First Transaction with a balance of $350.4 million as of December 31, 2024.

The increase of $456.8 million in substandard or lower loans as of December, 31, 2024 was partially due to loans acquired in the Republic First Transaction with a balance of $193.0 million as of December 31, 2024.

The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the prior period:

141 unchanged sentences

Loan Modifications to Borrowers Experiencing Financial Difficulty

On January 1, 2023, the Corporation adopted ASU 2022-02.

Loan modifications reported below do not include modifications with insignificant payment delays.

ASU 2022-02 lists the following factors when considering if the loan modification has insignificant payment delays:

(1) the amount of the restructured payments subject to the delay is insignificant relative to the unpaid principal or collateral value of the debt and will result in an insignificant shortfall in the contractual amount due, and (2)

the delay in timing of the restructured payment period is insignificant relative to the frequency of payments due under the debt, the debt’s original contractual maturity or the debt’s original expected duration.

The Corporation modifies loans by providing a concession when deemed appropriate.

Depending on the circumstances, a term extension, interest rate reduction or principal forgiveness may be granted.

In certain instances a combination of concessions may be provided to a customer.

In certain instances a combination of concessions may be provided to a borrower.

When principal forgiveness is provided, the amount of principal forgiven is deemed to be uncollectible and the amortized cost basis of the loan is reduced by the amount of the forgiven portion, with a corresponding reduction to the ACL.

The following table presents the amortized cost basis for the year ended December 31, 2023 of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

The following table presents the amortized cost basis of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

Term Extension

Amortized Cost Basis % of Class of Financing Receivable

Amortized Cost Basis % of Class of Financing Receivable Amortization Cost Basis % of Class of Financing Receivable

(dollars in thousands)

2 unchanged sentences

Real estate - residential mortgage 11,604 0.18 8,182 0.15

Real estate - home equity 379 0.03 — —

Real estate - construction 595 0.04 — —

Total $ 36,992 $ 23,096

Interest Rate Reduction and Term Extension

Amortized Cost Basis % of Class of Financing Receivable

Amortized Cost Basis % of Class of Financing Receivable Amortization Cost Basis % of Class of Financing Receivable

(dollars in thousands)

Real estate - residential mortgage $ 2,365 0.04 % $ 910 0.02 %

The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty for the year ended December 31, 2023.

Total $ 2,365 $ 910

The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty:

Term Extension

3 unchanged sentences

Real estate - residential mortgage Added a weighted-average 8.98 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - home equity Added a weighted-average 14.30 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - construction Added a weighted-average 0.67 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - commercial mortgage Added a weighted-average 1.22 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Commercial and industrial Added a weighted-average 0.92 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - residential mortgage Added a weighted-average 8.10 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Interest Rate Reduction

1 unchanged sentence

Real estate - residential mortgage Reduced weighted-average interest rate from 2.35 % to 1.40 %

During the year ended December 31, 2023, there were no loans modified due to financial difficulty where there was a principal balance forgiveness.

During the year ended December 31, 2023, there were no loans modified due to financial difficulty during 2023 that defaulted subsequent to modification.

The following table presents the performance of loans that have been modified in the year ended December 31, 2023.

Real estate - residential mortgage Reduced weighted-average interest rate from 3.76 % to 2.30 %

During the years ended December 31, 2024 and 2023, there were no loans modified due to financial difficulty where there was a principal balance forgiveness.

During the years ended December 31, 2024 and 2023, there were no loans modified due to financial difficulty that defaulted subsequent to modification.

The following table presents the performance of loans that have been modified due to financial difficulty in the previous 12 months.

30-89 90+ Total

5 unchanged sentences

Real estate - residential mortgage 11,448 1,918 642 2,560

Real estate - home equity 379 — — —

Real estate - construction 595 — — —

Total $ 32,656 $ 2,041 $ 642 $ 2,683

10 unchanged sentences

Net premises and equipment $ 195,527 $ 222,881

The $58.6 million decrease in land and buildings and improvements was primarily due to $73.5 million of asset disposals in the Sale-Leaseback Transaction, partially offset by $21.7 million of land and buildings and improvements purchased as part of the Republic First Transaction in the fourth quarter of 2024.

The $73.5 million of premises and equipment disposals in the Sale-Leaseback Transaction included $42.5 million of related accumulated depreciation for a net disposal amount of $31.0 million.

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS

Goodwill totaled $ 553.3 million and $ 550.5 million as of December 31, 2023 and 2022, respectively.

The increase was the result of adjustments related to the Merger.

See "Note 2 - Business Combinations" in the Notes to Consolidated Financial Statements for additional information.

Goodwill totaled $ 553.3 million as of December 31, 2024 and 2023, respectively.

There were no goodwill impairment charges in 2024 based on the annual assessment.

The estimated fair values of the Corporation's reporting units are subject to uncertainty, including future changes in fair values of banks in general and future operating results of reporting units, which could differ significantly from the assumptions used in the current valuation of reporting units.

The follow table summarizes intangible assets, which are included in goodwill and intangible assets on the consolidated balance sheets:

The following table summarizes intangible assets, which are included in goodwill and net intangible assets on the consolidated balance sheets:

(dollars in thousands)

3 unchanged sentences

Net intangibles included CDI of $ 80.2 million and $ 4.9 million as of December 31, 2024 and 2023, respectively.

The CDI was recorded as part of the Merger and is being amortized over 7 years using the sum-of-the-years digits method.

The CDI was recorded as part of the Republic First Transaction and the Merger and is being amortized over seven years using the sum-of-the-years' digits method.

The following table summarizes CDI amortization expense for each of the next five years and thereafter (dollars in thousands):

2025 $ 22,010

Thereafter 5,512

Total $ 80,185

NOTE 8 - MORTGAGE SERVICING RIGHTS

14 unchanged sentences

MSRs represent the economic value of contractual rights to service mortgage loans that have been sold.

The total portfolio of mortgage loans serviced by the Corporation for unrelated third parties was $ 4.1 billion and $ 4.2 billion as of December 31, 2023 and 2022, respectively.

The total portfolio of mortgage loans serviced by the Corporation for unrelated third parties was $ 4.1 billion as of December 31, 2024 and 2023, respectively.

Actual and expected prepayments of the underlying mortgage loans can impact the fair value of MSRs.

2 unchanged sentences

Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections.

The fair values of MSRs were $ 49.7 million and $ 50.0 million as of December 31, 2023 and 2022, respectively.

Based on its fair value analysis as of December 31, 2023 and 2022, the Corporation determined that no valuation allowance was required for the years ended December 31, 2023 and 2022.

The valuation allowance was $ 0.6 million at December 31, 2021.

The fair values of MSRs were $ 54.0 million, $ 49.7 million and $ 50.0 million as of December 31, 2024, 2023 and 2022, respectively.

Based on its fair value analysis as of December 31, 2024, 2023, and 2022, the Corporation determined that no valuation allowances were required.

Total servicing income, included in mortgage banking income in the consolidated statements of income, was $ 10.2 million, $ 10.2 million and $10.6 million as of December 31, 2024, 2023 and 2022, respectively.

Total MSR amortization expense, recognized as a reduction to mortgage banking income in the consolidated statements of income, was $ 5.1 million, $ 5.8 million and $ 12.0 million in 2023, 2022 and 2021, respectively.

Estimated future MSR amortization expense, based on balances as of December 31, 2023, and the estimated remaining lives of the underlying loans, follows (dollars in thousands):

Total MSRs amortization expense, recognized as a reduction to mortgage banking income in the consolidated statements of income, was $ 4.7 million, $ 5.1 million and $ 5.8 million in 2024, 2023 and 2022, respectively.

Estimated future MSRs

amortization expense, based on balances as of December 31, 2024, and the estimated remaining lives of the underlying loans, is as follows (dollars in thousands):

Thereafter 16,249

14 unchanged sentences

Total $ 4,150,098

Included in time deposits were certificates of deposit equal to or greater than $100,000 of $ 1.5 billion and $ 691.4 million as of December 31, 2023 and 2022, respectively.

Time deposits equal or greater than $250,000 were $ 551.2 million and $ 214.8 million as of December 31, 2023 and 2022, respectively.

Included in time deposits were certificates of deposit equal to or greater than $100,000 of $ 2.5 billion and $ 1.5 billion as of December 31, 2024 and 2023, respectively.

Time deposits equal or greater than $250,000 were $ 1.0 billion and $ 551.2 million as of December 31, 2024 and 2023, respectively.

NOTE 10 - BORROWINGS

4 unchanged sentences

Federal funds purchased $ — $ 240,000 $ 125,000 $ 862,000

Federal Home Loan Bank advances 1,100,000 1,250,000 1,720,000 1,250,000

FHLB advances 850,000 1,100,000 1,706,621 1,720,000

Other borrowings:

Short-term promissory notes issued to customers and customer repurchase agreements 563,831 611,304 625,829 646,439

Other repurchase agreements — 315,000 — 315,000

Other borrowings 901 838 1,155 1,151

Total other borrowings $ 564,732

As of December 31, 2023, the Corporation had aggregate federal funds lines borrowing capacity of $ 2.6 billion, with $0.2 billion of outstanding borrowings against that amount.

As of December 31, 2024, the Corporation had aggregate federal funds line borrowing capacity of $ 2.6 billion, with no amount outstanding.

A combination of commercial real estate loans, commercial loans, consumer loans and investment securities were pledged to the FRB to provide access to the FRB discount window borrowings.

The Corporation had $ 3.1 billion of collateralized borrowing availability at the FRB discount window with no amount outstanding as of December 31, 2024.

The Corporation had $1.9 billion of borrowing capacity at the Bank Term Funding Program facility with no amount outstanding as of December 31, 2023.

As of December 31, 2023, the Corporation had total borrowing capacity of $ 8.2 billion with remaining borrowing capacity of approximately $ 4.9 billion with the FHLB.

As of December 31, 2024, the Corporation had total FHLB borrowing capacity of $ 11.1 billion with $5.1 billion of advances and letters of credit outstanding, for a remaining borrowing capacity of approximately $ 6.0 billion.

Advances from the FHLB, when utilized, are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets.

5 unchanged sentences

The following table summarizes the scheduled maturities of senior and subordinated debt with an original maturity of one year or more as of December 31, 2024 (dollars in thousands):

2024 $ 168,778

Thereafter 370,000

1 unchanged sentence

Total $ 367,316

In November 2024, the Corporation retired $168.8 million of subordinated notes issued in June 2015 and November 2014 which matured on November 15, 2024.

The subordinated notes issued June 2015 carried a fixed rate of 4.50 % and an effective rate of 4.69 % as a result of discounts and issuance costs.

Interest was paid semi-annually in May and November.

The subordinated notes issued November 2014, carried a fixed rate of 4.50 % and an effective rate of 4.87 % as a result of discounts and issuance costs.

Interest was paid semi-annually in May and November.

In December 2023, the Corporation retired $ 5.0 million of subordinated debt with a fixed-to-floating rate of 3.25 % and effective rate of 3.35 % maturing in 2030.

On March 16, 2022, $ 65 million of senior notes with a fixed rate of 3.60% were repaid upon their maturity.

The Corporation owned all of the common stock of the Columbia Bancorp Statutory Trust, Columbia Bancorp Statutory Trust II and Columbia Bancorp Statutory Trust III, each of which issued TruPS in conjunction with the Corporation issuing junior subordinated deferrable interest debentures to these trusts.

In September 2022, the Corporation redeemed all of the outstanding junior subordinated deferrable interest debentures issued to these trusts, totaling approximately $ 17.2 million, and these trusts redeemed all of the outstanding TruPS in a like amount, after which the subsidiary trusts were canceled.

In March 2020, the Corporation issued $ 200.0 million and $ 175.0 million of subordinated notes due in 2030 and 2035, respectively.

The subordinated notes maturing in 2030 were issued with a fixed-to-floating rate of 3.25 % and an effective rate of 3.35 %, due to issuance costs, and the subordinated notes maturing in 2035 were issued with a fixed-to-floating rate of 3.75 % and an effective rate of 3.85 %, due to issuance costs.

In June 2015, the Corporation issued $ 150.0 million of subordinated notes, which mature on November 15, 2024 and carry a fixed rate of 4.50 % and an effective rate of 4.69 % as a result of discounts and issuance costs.

Interest is paid semi-annually in May and November.

In November 2014, the Corporation issued $ 100.0 million of subordinated notes, which mature on November 15, 2024 and carry a fixed rate of 4.50 % and an effective rate of 4.87 % as a result of discounts and issuance costs.

Interest is paid semi-annually in May and November.

NOTE 11 - DERIVATIVE FINANCIAL INSTRUMENTS

23 unchanged sentences

Negative fair values 32,406 ( 1,569 ) 6,112 ( 31 )

(1) Fair values are net of a valuation allowance of $366.3 thousand as of December 31, 2023 and 2022.

In the third quarter of 2023, the Corporation recorded a $3.0 million reduction to other non-interest income to reflect market valuation movement in certain of the Corporation's legacy commercial customer back-to-back interest rate swap transactions resulting from the transition from LIBOR to SOFR.

For the year ended December 31, 2023, the full-year reduction to other non-interest income related to the transition from LIBOR to SOFR was $1.9 million.

The following table presents the effect of cash flow hedge accounting on AOCI for the year ended December 31, 2023 and 2022:

(1) Fair values are net of a valuation allowance of $366.3 thousand as of December 31, 2024 and 2023, respectively.

In the third quarter of 2023, the Corporation transitioned certain of the Corporation's legacy commercial customer back-to-back

interest rate swap transactions from LIBOR to SOFR.

During 2024, the increase to other non-interest income to reflect market valuation movements from the transition from LIBOR to SOFR was $0.4 million.

During 2023, the reduction to other non-interest income related to the transition from LIBOR to SOFR was $1.9 million.

The following table presents the effect of cash flow hedge accounting on AOCI:

Amount of Gain (Loss) Recognized in OCI on Derivative Amount of Gain (Loss) Recognized in OCI Included Component Amount of Gain (Loss) Recognized in OCI Excluded Component Location of Gain (Loss) Recognized from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Included Component Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component

6 unchanged sentences

Interest Rate Products $ 19,598 $ 19,598 $ — Interest Income $ ( 27,546 ) $ ( 27,546 ) $ —

Interest Rate Products ( 10,550 ) ( 10,550 ) — Interest Expense 1,696 1,696 —

Total $ 9,048 $ 9,048 $ — $ ( 25,850 ) $ ( 25,850 ) $ —

7 unchanged sentences

Interest contracts:

Amount of gain (loss) reclassified from AOCI into income ( 27,546 ) 1,696 ( 7,761 ) —

Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring — — — —

Amount of gain (loss) reclassified from AOCI into income - included component ( 27,546 ) 1,696 ( 7,761 ) —

Amount of gain (loss) reclassified from AOCI into income - excluded component — — — —

Amount of (loss) gain reclassified from AOCI into income ( 29,899 ) 6,446 ( 27,546 ) 1,696

Amount of (loss) gain reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring — — — —

Amount of (loss) gain reclassified from AOCI into income - included component ( 29,899 ) 6,446 ( 27,546 ) 1,696

Amount of (loss) gain reclassified from AOCI into income - excluded component — — — —

During the next twelve months, the Corporation estimates that an additional $ 16.5 million will be reclassified as a decrease to interest income.

16 unchanged sentences

(1) Cost basis of mortgage loans held for sale represents the unpaid principal balance.

Gains related to changes in fair values of mortgage loans held for sale were $ 0.3 million for the year ended December 31, 2023.

Losses related to changes in fair values of mortgage loans held for sale were $ 0.6 million for the year ended December 31, 2022, and losses related to changes in fair values of mortgage loans held for sale were $ 2.5 million for the year ended December 31, 2021.

Losses related to changes in fair values of mortgage loans held for sale were $ 0.1 million for the year ended December 31, 2024.

Gains related to changes in fair values of mortgage loans held for sale were $ 0.3 million for the year ended December 31, 2023, and losses related to changes in fair values of mortgage loans held for sale were $ 0.6 million for the year ended December 31, 2022.

The gains and losses are recorded on the consolidated income statements as an adjustment to mortgage banking income.

24 unchanged sentences

For interest rate derivative liabilities, amounts represent any derivative asset fair values that could be offset in the event of counterparty or customer default.

(2) Amounts represent cash collateral (pledged by the Corporation) or received from the counterparty on interest rate derivative transactions and foreign

(2) Amounts represent cash collateral received from the counterparty or posted by the Corporation on interest rate derivative transactions and foreign

exchange contracts with financial institution counterparties.

1 unchanged sentence

underlying loans to those borrowers.

Cash collateral amounts are included in the table only to the extent of the net derivative fair values.

Cash and securities collateral amounts are included in the table only to the extent of the net derivative fair values.

Cash Flow Hedge Terminations

On October 10, 2024, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $250 million.

As the hedged transaction continues to be probable, the unrealized losses will be recorded in AOCI and will be recognized as an increase to interest expense when the previously forecasted hedged items affect earnings in future periods.

During the year ended December 31, 2024, $0.2 million of these unrealized losses were reclassified as an increase to interest expense on borrowings on the Consolidated Statements of Income.

In January 2023, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $ 1.0 billion.

As the hedged transaction continues to be probable, the unrealized losses that have been recorded in AOCI are recognized as reduction to interest income when the previously forecasted hedged item affects earnings in future periods.

During 2023, $ 22.1 million of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the consolidated statements of income.

As the hedged transaction continues to be probable, the unrealized losses that have been recorded in AOCI are recognized as reduction to interest income, including fees, when the previously forecasted hedged item affects earnings in future periods.

During the years ended December 31, 2024 and 2023, $27.9 million and $ 22.1 million, respectively, of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the consolidated statements of income.

NOTE 12 - REGULATORY MATTERS

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To be categorized as well capitalized, the Bank was required to maintain minimum total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the table below.

There are no conditions or events since December 31, 2023, that management believes have changed the institution's categories.

There are no conditions or events since December 31, 2024, that management believes have changed the Corporation and the Bank's categories.

T he following tables present the Total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage requirements under the Basel III Rules as of December 31:

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The total amount available for payment of dividends by the Bank to the Parent Company calculated using the three-year earnings test was approximately $ 334.4 million as of December 31, 2024 based on the Bank maintaining enough capital to be considered well capitalized under the Basel III Rules.

Under current regulations, the Bank is limited in the amount it may loan to its affiliates, including the Parent Company.

A condition of the OCC’s approval of the Republic First Transaction requires that the Bank, for a period of two years following the Acquisition Date, request and receive a written determination of no supervisory objection from the OCC prior to declaring or paying any dividend to the Parent Company

Under current regulations, the Bank is limited in the amount it may lend to its affiliates, including the Parent Company.

Loans to a single affiliate may not exceed 10 %, and the aggregate of loans to all affiliates may not exceed 20 % of the Bank's regulatory capital.

17 unchanged sentences

Tax-exempt income ( 4.3 ) ( 4.2 ) ( 3.5 )

Bargain purchase gain ( 2.3 ) — —

Bank owned life insurance ( 0.9 ) ( 0.8 ) ( 0.7 )

9 unchanged sentences

Allowance for credit losses 90,148 71,013

State loss carryforwards 27,948 26,421

Lease liability 34,921 21,570

State loss carryforwards 26,118 27,948

Other accrued expenses 16,142 11,082

8 unchanged sentences

Right-of-use-asset 31,960 20,022

MSRs 7,158 7,750

Acquisition premiums/discounts 16,360 5,508

MSRs 6,952 7,158

Postretirement and defined benefit plans 5,560 3,438

11 unchanged sentences

As of December 31, 2024, based on the level of historical taxable income and projections for future taxable income over the periods in which the DTAs are deductible, management believes it is more likely than not that the Corporation will realize the benefits of its DTAs, net of the valuation allowance.

As of December 31, 2023, the Corporation had tax credit carryforwards related to TCIs of approximately $ 5 million.

The Corporation recorded a DTA of $ 5 million, reflecting the benefit of these tax credit carryforwards, which will begin to expire in 2042 if not yet utilized.

Uncertain Tax Positions

10 unchanged sentences

These offsetting increases and decreases are likely to continue in the future, including over the next twelve months.

While the net effect on total unrecognized tax benefits during this period cannot be reasonably estimated, approximately $ 0.1 million is expected to reverse in 2024 due to lapsing of the statute of limitations.

While the net effect on total unrecognized tax benefits during this period cannot be reasonably estimated, approximately $ 82 thousand is expected to reverse in 2025 due to lapsing of the statute of limitations.

Decreases can also occur throughout the settlement of positions with taxing authorities.

As of December 31, 2024, if recognized, all of the Corporation's unrecognized tax benefits would impact the effective tax rate.

Not included in the table above is $ 0.2 million of federal income tax benefit on unrecognized state tax benefits which, if recognized, would also impact the effective tax rate.

Not included in the table above is $ 134 thousand of federal income tax benefit on unrecognized state tax benefits which, if recognized, would also impact the effective tax rate.

Interest accrued related to unrecognized tax benefits is recorded as a component of income tax expense.

1 unchanged sentence

The Corporation recognized approximately $ 168 thousand and $ 138 thousand of recoveries in 2024 and 2023, respectively, for interest and penalties in income tax expense related to unrecognized tax positions.

As of December 31, 2023 and 2022, total accrued interest and penalties related to unrecognized tax positions were approximately $ 0.3 million and $ 0.5 million, respectively.

As of December 31, 2024 and 2023, total accrued interest and penalties related to unrecognized tax positions were approximately $ 177 thousand and $ 0.3 million, respectively.

The Corporation files income tax returns in the federal and various state jurisdictions.

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Diluted net income per common share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding plus the incremental number of shares added as a result of converting common stock equivalents, calculated using the treasury stock method.

The Corporation's common stock equivalents consist of outstanding stock options, restricted stock, RSUs and PSUs.

The Corporation's common stock equivalents consist of outstanding restricted stock, RSUs and PSUs.

PSUs are required to be included in weighted average diluted shares outstanding if performance measures, as defined in each PSU award agreement, are met as of the end of the period.

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The preferred stock is redeemable, at the Corporation's option, in whole or in part, on and after January 15, 2026, and redeemable in whole, but not in part, prior to January 15, 2026 within 90 days following the occurrence of a regulatory capital treatment event.

Common Stock Offering

On May 1, 2024, the Corporation completed its underwritten public offering of 19,166,667 shares of its common stock at a price to the public of $ 15.00 per share, before underwriting discounts.

The net proceeds to the Corporation from the offering after deducting underwriting discounts and transaction expenses were approximately $ 272.6 million.

Stock Reissuance

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss)

The following table presents the components of other comprehensive income (loss) for the years ended December 31:

The following table presents the components of OCI for the years ended December 31:

Before-Tax Amount Tax Effect Net of Tax Amount

(dollars in thousands)

Unrealized gain (loss) on securities $ 46,572 $ ( 10,549 ) $ 36,023

Net unrealized gains (losses) on securities $ ( 28,993 ) $ 6,568 $ ( 22,425 )

Reclassification adjustment for securities gains (losses) included in net income (1)

2 unchanged sentences

7,251 ( 1,642 ) 5,609

Net unrealized holding gains (loss) arising during the period on interest rate derivatives used in cash flow hedges 9,048 ( 2,050 ) 6,998

Reclassification adjustment for net loss (gain) realized in net income on interest rate derivatives used in cash flow hedges 25,850 ( 5,855 ) 19,995

Unrecognized pension and postretirement income (cost) 6,162 ( 1,385 ) 4,777

Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in cash flow hedges 764 ( 174 ) 590

Reclassification adjustment for net gains (losses) realized in net income on interest rate derivatives used in cash flow hedges 23,453 ( 5,312 ) 18,141

Unrecognized pension and postretirement income 9,411 ( 2,132 ) 7,279

Amortization of net unrecognized pension and postretirement items (3)

Total Other Comprehensive Income $ 94,616 $ ( 21,420 ) $ 73,196

Unrealized gain (loss) on securities $ ( 403,606 ) $ 91,437 $ ( 312,169 )

( 541 ) 119 ( 422 )

Total Other Comprehensive Income (Loss) $ 31,628 $ ( 7,167 ) $ 24,461

Net unrealized gains (losses) on securities $ 46,572 $ ( 10,549 ) $ 36,023

Reclassification adjustment for securities gains (losses) included in net income (1)

2 unchanged sentences

7,644 ( 1,731 ) 5,913

Net unrealized holding gain (loss) arising during the period on interest rate derivatives used in cash flow hedges ( 81,400 ) 18,437 ( 62,963 )

Reclassification adjustment for net loss (gain) realized in net income on interest rate derivatives used in cash flow hedges 7,761 ( 1,757 ) 6,004

Unrecognized pension and postretirement income (cost) 825 ( 181 ) 644

Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in cash flow hedges 9,048 ( 2,050 ) 6,998

Reclassification adjustment for net gains (losses) realized in net income on interest rate derivatives used in cash flow hedges 25,850 ( 5,855 ) 19,995

Unrecognized pension and postretirement income 6,162 ( 1,385 ) 4,777

Amortization of net unrecognized pension and postretirement items (3)

128 ( 28 ) 100

Total Other Comprehensive (Loss) $ ( 533,828 ) $ 120,941 $ ( 412,887 )

Unrealized gain (loss) on securities $ ( 23,222 ) $ 5,274 $ ( 17,948 )

Total Other Comprehensive Income (Loss) $ 94,616 $ ( 21,420 ) $ 73,196

Net unrealized gains (losses) on securities $ ( 403,606 ) $ 91,437 $ ( 312,169 )

Reclassification adjustment for securities gains (losses) included in net income (1)

2 unchanged sentences

( 57,509 ) 13,026 ( 44,483 )

Net unrealized holding gains (loss) arising during the period on interest rate derivatives used in cash flow hedges ( 3,452 ) 782 ( 2,670 )

Reclassification adjustment for net loss realized in net income on interest rate swaps used in cash flow hedges ( 2,776 ) 629 ( 2,147 )

Unrecognized pension and postretirement income (cost) 9,147 ( 2,003 ) 7,144

Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in cash flow hedges ( 81,400 ) 18,437 ( 62,963 )

Reclassification adjustment for net gains (losses) loss realized in net income on interest rate swaps used in cash flow hedges 7,761 ( 1,757 ) 6,004

Unrecognized pension and postretirement income 825 ( 181 ) 644

Amortization of net unrecognized pension and postretirement items (3)

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17 - Employee Benefit Plans," for additional details.

The following table presents changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31:

The following table presents changes in each component of AOCI, net of tax, for the years ended December 31:

Unrealized Gains (Losses) on Investment Securities Net Unrealized Gain (Loss) on Interest Rate Derivatives used in Cash Flow Hedges Unrecognized Pension and Postretirement Plan Income (Costs) Total

2 unchanged sentences

OCI before reclassifications ( 312,169 ) ( 62,963 ) 644 ( 374,488 )

Amounts reclassified from AOCI gain (loss) ( 25,905 ) ( 4,817 ) 1,156 ( 29,566 )

Amounts reclassified from AOCI ( 20 ) 6,004 100 6,084

Amortization of net unrealized gains (losses) on AFS securities transferred to HTM ( 44,483 ) — — ( 44,483 )

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Under the 2025 Repurchase Program, the Corporation is authorized to repurchase up to $ 125.0 million of shares of its common stock.

Under this authorization, up to $ 25.0 million of the $125 million authorization may be used to repurchase the Corporation's Preferred Stock and outstanding subordinated notes through December 31, 2024.

Under this authorization, up to $ 25.0 million of the $125 million authorization may be used to repurchase the Corporation's Preferred Stock.

The 2025 Repurchase Program may be discontinued at any time.

On December 19, 2023, the Corporation announced that its Board of Directors approved the 2024 Repurchase Program.

Under the 2023 Repurchase Program, the Corporation is authorized to repurchase up to $ 100.0 million of its common stock, or approximately 3.6 % of its outstanding shares, through December 31, 2023.

The 2024 Repurchase Program expired on December 31, 2024.

Under the 2024 Repurchase Program, the Corporation was authorized to repurchase up to $ 125.0 million of shares of its common stock.

During 2024, 1.9 million shares were repurchased at a total cost of $30.3 million, or $15.69 per share, under t he 2024 Repurchase Program.

On March 21, 2022, the Corporation announced that its Board of Directors approved the repurchase of up to $75 million of shares of the Corporation's common stock commencing on April 1, 2022 and expiring on December 31, 2022.

No shares of the Corporation's common stock were repurchased under this program during 2022.

On February 9, 2021, the Corporation announced that its Board of Directors approved the share repurchase of up to $ 75.0 million of the Corporation's common stock through December 31, 2021 .

On November 19, 2021, the Corporation announced that its Board of Directors approved the extension of this program through March 31, 2022.

During 2021, 2.8 million shares were repurchased at a total cost of $ 43.9 million, or $ 15.65 per share, under this program.

No shares of the Corporation's common stock were repurchased under this program during 2022.

On December 20, 2022, the Corporation announced that its Board of Directors approved the 2023 Repurchase Program.

Under the 2023 Repurchase Program, the Corporation was authorized to repurchase up to $ 100.0 million of its common stock through December 31, 2023.

During 2023, 5.0 million shares were repurchased at a total cost of $ 77.1 million, or $ 15.32 per share, under t he 2023 Repurchase Program.

Under these repurchase programs, repurchased shares are added to treasury stock, at cost.

1 unchanged sentence

NOTE 16 - STOCK-BASED COMPENSATION PLANS

The following table presents compensation expense and related tax benefits for all equity awards recognized in the consolidated statements of income for the years ended December 31, 2023, 2022 and 2021:

The following table presents compensation expense and related tax benefits for all equity awards recognized in the consolidated statements of income for the years ended December 31:

2024 2023 2022

17 unchanged sentences

Outstanding and exercisable as of December 31, 2024 — $ 12.61 0.0 years $ —

The following table presents information about stock options exercised for the years ended December 31, 2023, 2022 and 2021:

The following table presents information about stock options exercised for the years ended December 31:

2024 2023 2022

52 unchanged sentences

Net amortization and deferral — 631 653

Gain on settlement ( 292 ) — —

Net periodic pension cost $ ( 1,036 ) $ 464 $ ( 1,347 )

17 unchanged sentences

The following table summarizes the changes in the unrecognized net loss included as a component of AOCI:

Unrecognized Net Loss

Unrecognized Net Loss (Gain)

Before tax Net of tax

2 unchanged sentences

Recognized as a component of 2023 periodic pension cost ( 631 ) ( 492 )

Unrecognized losses arising in 2022 ( 835 ) ( 651 )

Unrecognized gains arising in 2023 ( 6,119 ) ( 4,775 )

Balance as of December 31, 2023 5,320 4,117

Recognized as a component of 2024 periodic pension cost — —

Unrecognized losses arising in 2023 ( 6,119 ) ( 4,775 )

Unrecognized gains arising in 2024 ( 9,417 ) ( 7,284 )

Balance as of December 31, 2024 $ ( 4,097 ) $ ( 3,167 )

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Multiemployer Defined Benefit Pension Plan

In connection with the Merger, the Corporation assumed the obligations of Prudential Bancorp under the Prudential Bancorp Pension Plan that had previously been closed to new Prudential Bancorp participants.

In connection with the Merger, the Corporation assumed the pension plan obligations of Prudential Bancorp, under the Prudential Bancorp Pension Plan, that had previously been closed to new Prudential Bancorp participants.

The Prudential Bancorp Pension Plan is structured as a multiple employer plan under Internal Revenue Code Section 413(c).

It maintains a single trust and all assets are commingled and invested on a pooled basis.

All amounts payable by the Prudential Bancorp Pension Plan are a general charge upon all its assets.

All amounts payable by the Plan are a general charge upon all its assets.

This structure gives rise to the risk if a participating employer fails before funding up to cover the liabilities of its participants and orphans, contributions for all remaining employers will increase, as assets have to be re-allocated to cover such shortfall.

Information regarding the Prudential Bancorp Pension Plan as of December 31, 2024 is as follows:

Legal Name of Plan Pentegra Defined Benefit Plan for Financial Institutions

Legal Name of Plan Prudential Bancorp Pension Plan

(dollars in thousands)

23 unchanged sentences

The fair values of the Postretirement Plan assets were $ 0 as of both December 31, 2024 and 2023.

The funded status of the Postretirement Plan, included in other liabilities on the consolidated balance sheets as of December 31, 2023 and 2022 was $ 0.8 million and $ 1.0 million, respectively.

The funded status for the Postretirement Plan included in other liabilities was $ 0.8 million in the consolidated balance sheets as of December 31, 2024 and 2023, respectively.

The following table summarizes the changes in items recognized as a component of accumulated other comprehensive income (loss):

8 unchanged sentences

Recognized as a component of 2024 postretirement cost 464 77 541 422

Unrecognized gains arising in 2023 — ( 23 ) ( 23 ) ( 18 )

Unrecognized loss arising in 2024 — 6 6 5

Balance as of December 31, 2024 $ ( 1,156 ) $ ( 664 ) $ ( 1,820 ) $ ( 1,420 )

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Weighted average discount rate 5.51 % 3.34 %

The discount rate used in determining the lease liability for each individual lease is the FHLB fixed advance rate which corresponds with the remaining lease term.

The discount rate used in determining the lease liability for each individual lease is the Bank's incremental borrowing rate which corresponds with the remaining lease term.

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

8 unchanged sentences

Present value of lease liabilities $ 154,176

On May 10, 2024, the Bank and Fulton Financial Realty Company, a wholly owned subsidiary of the Corporation, entered into the Sale-Leaseback Transaction for 40 financial center office locations for an aggregate cash purchase price of $55.4 million.

The Bank entered into a lease for each of the locations sold in the Sale-Leaseback Transaction for an initial term of 15 years, with the option to extend the term of each for up to three successive terms of up to five years each.

During the initial lease terms, the base rental amount will increase annually at a rate of 2.25%.

The Corporation recorded a pre-tax gain, after deduction of transaction-related expenses, of approximately $20.3 million in connection with the Sale-Leaseback Transaction.

The properties are located in Pennsylvania, New Jersey, Delaware, and Maryland.

As of December 31, 2024, the Corporation had not entered into any significant leases that have not yet commenced.

5 unchanged sentences

Available for sale investment securities:

Government securities 42,161 — — 42,161

Government-sponsored agency securities — 1,010 — 1,010

State and municipal securities — 814,887 — 814,887

34 unchanged sentences

Loans held for sale - This category includes mortgage loans held for sale that are measured at fair value.

Fair values as of December 31, 2023 and 2022, were measured as the price that secondary market investors were offering for loans with similar

characteristics.

Fair values as of December 31, 2024 and 2023, were measured as the price that secondary market investors were offering for loans with similar characteristics.

See "Note 1 - Summary of Significant Accounting Policies" for details related to the Corporation's election to measure assets and liabilities at fair value.

2 unchanged sentences

The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics.

Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing.

Because many fixed

income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing.

Standard market inputs include:

3 unchanged sentences

Fair values are based on quoted prices with active markets.

Government-sponsored agency securities - These debt securities are classified as Level 2.

Fair values are determined by a third-party pricing service, as detailed above.

• State and municipal securities/Collateralized mortgage obligations/Residential mortgage-backed securities/Commercial mortgage-backed securities - These debt securities are classified as Level 2.

Government-sponsored agency securities/State and municipal securities/Collateralized mortgage obligations/Residential mortgage-backed securities/Commercial mortgage-backed securities - These debt securities are classified as Level 2.

Fair values are determined by a third-party pricing service, as detailed above.

• Corporate debt securities - This category consists of subordinated and senior debt issued by financial institutions ($ 433.4 million at December 31, 2023 and $ 415.4 million at December 31, 2022) and other corporate debt issued by non-financial institutions ($ 7.2 million at December 31, 2023 and $ 6.9 million at December 31, 2022).

Level 2 investments include subordinated debt and senior debt, and other corporate debt issued by non-financial institutions at December 31, 2023 and 2022.

The fair values for these corporate debt securities are determined by a third-party pricing service, as detailed above.

• Corporate debt securities - These securities are classified as Level 2.

This category consists of subordinated and senior debt issued by financial institutions ($ 293.1 million at December 31, 2024 and $ 433.4 million at December 31, 2023) and other corporate debt issued by non-financial institutions ($ 7.3 million at December 31, 2024 and $ 7.2 million at December 31, 2023).

The fair values for corporate debt securities are determined by a third-party pricing service as detailed above.

Investments held in Rabbi Trust - This category consists of mutual funds that are held in trust for employee deferred compensation plans that the Corporation has elected to measure at fair value.

1 unchanged sentence

Derivative assets - Fair value of foreign currency exchange contracts classified as Level 1 assets ($ 1.7 million at December 31, 2024 and $ 0.6 million at December 31, 2023).

The mutual funds and foreign exchange prices used to measure these items at fair value are based on quoted prices for identical instruments in active markets.

The foreign exchange prices used to measure these items at fair value are based on quoted prices for identical instruments in active markets.

Level 2 assets, representing the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors ($ 0.8 million at December 31, 2024 and $ 0.5 million at December 31, 2023) and the fair value of interest rate derivatives ($ 159.2 million at December 31, 2024 and $ 157.1 million at December 31, 2023).

12 unchanged sentences

53,972 49,696

SBA servicing asset 3,120 —

Total assets $ 228,381 $ 152,727

22 unchanged sentences

Discount Rate + 200 bps ( 9 )%

• SBA servicing asset – This category consists of the retained servicing rights on SBA-guaranteed loans sold to investors.

The standard sale structure under the SBA Secondary Participation Guaranty Agreement provides for the Corporation to retain a portion of the cash flow from the interest payment received on the SBA guaranteed portion of the loan, which is commonly known as a servicing spread.

A third-party valuation expert is utilized to perform the modeling to estimate the fair value of the SBA servicing asset.

Since the valuation model uses significant unobservable inputs, the SBA servicing asset is classified within Level 3.

The following table details the book values and the estimated fair values of the Corporation's financial instruments as of December 31, 2024 and 2023.

16 unchanged sentences

Accrued interest payable 31,620 31,620 — — 31,620

Federal funds purchased 240,000 240,000 — — 240,000

Federal Home Loan Bank advances 1,100,000 1,094,013 — — 1,094,013

FHLB advances 850,000 851,470 — — 851,470

Senior debt and subordinated debt 367,316 — 253,818 — 253,818

18 unchanged sentences

Federal funds purchased 240,000 240,000 — — 240,000

Federal Home Loan Bank advances 1,250,000 1,249,629 — — 1,249,629

FHLB advances 1,100,000 1,094,013 — — 1,094,013

Senior debt and subordinated debt 535,384 — 463,270 — 463,270

2 unchanged sentences

Fair values of financial instruments are significantly affected by the assumptions used, principally the timing of future cash flows and discount rates.

Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily

be realized in an immediate sale or settlement of the instrument.

The aggregate fair value amounts presented do not necessarily represent management's estimate of the underlying value of the Corporation.

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Brokered deposits consist of demand and saving deposits, which are classified as Level 1, and time deposits, which are classified as Level 2.

The fair value of these deposits is determined in a manner consistent with the respective type of deposits discussed above.

The fair value of these deposits is determined in a manner consistent with the respective type of deposit discussed above.

NOTE 20 - SEGMENT REPORTING

The Corporation has one reportable segment whose primary sources of revenue are interest income on loans, investment securities and other interest-earning assets and fee income earned on its products and services.

Its expenses consist of interest expense on deposits and borrowed funds, provision for credit losses, other operating expenses and income taxes.

The Corporation manages its business activities on a consolidated basis.

The accounting policies of the segment are the same as those described in “Note 1 – Summary of Significant Accounting Policies.”

The Chief Operating Decision Maker is the Chairman and Chief Executive Officer (“CEO”) who assesses performance of the segment based on net income available to common shareholders and net income available to common shareholders per share (diluted), which is reported in the Consolidated Statements of Income.

Net income available to common shareholders and net income available to common shareholders per share (diluted), are used to monitor actual results versus budget, in competitive analyses by benchmarking to the Corporation’s peers, and in decision-making pertaining to executive compensation levels, common stock and preferred stock dividend levels, common share repurchases and capital expenditure spending.

The measure of segment assets is reported on the Consolidated Balance Sheet.

The following table presents segment results as of December 31:

(dollars in thousands, except per-share data)

2024 2023 2022

Interest Income

Loans, including fees $ 1,394,969 $ 1,156,373 $ 758,609

Investment securities 136,650 101,518 98,115

Other interest income 50,577 15,345 8,114

Total Interest Income 1,582,196 1,273,236 864,838

Interest Expense

Deposits 521,859 292,205 43,829

Federal funds purchased 2,881 30,417 2,967

FHLB advances 37,793 46,965 7,334

Senior debt and subordinated debt 20,255 21,361 22,257

Other borrowings and interest-bearing liabilities 39,083 28,002 6,817

Total Interest Expense 621,871 418,950 83,204

Net Interest Income 960,325 854,286 781,634

Provision for credit losses 71,636 54,036 28,021

Net Interest Income After Provision for Credit Losses 888,689 800,250 753,613

Total Non-Interest Income 275,731 227,678 227,130

Non-Interest Expense

Salaries and employee benefits 432,821 377,417 356,884

Data processing and software 77,882 66,471 60,255

Net occupancy 69,359 58,019 56,195

Other outside services 60,586 47,724 37,152

FDIC insurance 23,829 25,565 12,547

Equipment 17,850 14,390 14,033

Intangible amortization 17,830 2,944 1,731

Professional fees 10,857 8,392 9,123

Marketing 8,958 9,004 6,885

Acquisition-related expenses 37,635 — 10,328

Other 62,184 69,281 68,595

Total Non-Interest Expense 819,791 679,207 633,728

Income Before Income Taxes 344,629 348,721 347,015

Income taxes 55,886 64,441 60,034

Net Income 288,743 284,280 286,981

Preferred stock dividends ( 10,248 ) ( 10,248 ) ( 10,248 )

Net Income Available to Common Shareholders $ 278,495 $ 274,032 $ 276,733

Net income available to common shareholders per share (diluted) $ 1.57 $ 1.64 $ 1.67

NOTE 21 - COMMITMENTS AND CONTINGENCIES

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its borrowers or obligors.

Commitments to extend credit are agreements to lend to a borrowers or obligors as long as there is no violation of any condition established in the contract.

The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its borrowers or obligors.

Commitments to extend credit are agreements to lend to a borrower or obligor as long as there is no violation of any condition established in the contract.

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

Since a portion of the commitments is expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Corporation evaluates each borrower or obligor's creditworthiness on a case-by-case basis.

Since a portion of the commitments is expected to expire without being drawn

upon, the total commitment amounts do not necessarily represent future cash requirements.

The Corporation evaluates each borrower's or obligor's creditworthiness on a case-by-case basis.

The amount of collateral, if any, obtained upon extension of credit is based on management's credit evaluation of the borrower or obligor.

5 unchanged sentences

The maximum exposure to loss for standby and commercial letters of credit is equal to the contractual (or notional) amount of the instruments.

The Corporation has commitments to extend credit and letters of credit.

The following table presents the Corporation's commitments to extend credit and letters of credit:

13 unchanged sentences

The Corporation maintains a reserve for estimated losses related to loans sold to investors.

As of December 31, 2023 and 2022, the total reserve for losses on residential mortgage loans sold was $ 1.8 million and $ 1.4 million, for each period, including reserves for both representation and warranty and credit loss exposures.

In addition, a component of ACL for OBS credit exposures of $ 2.7 million and $ 6.0 million as of December 31, 2023 and December 31, 2022, respectively, related to additional credit exposure for potential loan repurchases.

As of December 31, 2024 and 2023, the total reserve for losses on residential mortgage loans sold was $ 1.5 million and $ 1.8 million, respectively, including reserves for both representation and warranty and credit loss exposures.

In addition, included as a component of ACL for OBS credit exposures was $ 1.2 million and $ 2.7 million as of December 31, 2024 and December 31, 2023, respectively, related to additional credit exposure for potential loan repurchases.

Legal Proceedings

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Equity in undistributed net (income) loss of subsidiaries ( 245,009 ) ( 13,073 ) ( 120,213 )

Write-off of unamortized costs on trust preferred securities — — 12,390

Net change in other liabilities and payable to non-bank subsidiaries ( 50,047 ) ( 198,349 ) 78,716

Net change in other liabilities and payables to non-bank subsidiaries ( 4,504 ) ( 50,047 ) ( 198,349 )

Total adjustments ( 321,368 ) ( 87,421 ) ( 259,048 )

Net cash provided by operating activities 196,859 27,933 644,764

Net cash (used in) provided by operating activities ( 32,625 ) 196,859 27,933

Cash Flows From Investing Activities

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Repayments of long-term borrowings ( 168,778 ) ( 5,000 ) ( 81,496 )

Net proceeds from issuance of common stock 3,160 7,876 7,437

Net proceeds from common stock 270,582 3,160 7,876

Dividends paid ( 131,698 ) ( 115,738 ) ( 116,009 )

1 unchanged sentence

Net cash used in financing activities ( 60,242 ) ( 194,634 ) ( 189,629 )

Net increase (decrease) in Cash and Cash Equivalents 2,225 ( 183,507 ) 342,652

Net (decrease) increase in Cash and Cash Equivalents ( 92,867 ) 2,225 ( 183,507 )

Cash and Cash Equivalents at Beginning of Year 171,433 169,208 352,715

6 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Republic First Transaction was completed on April 26, 2024, as further discussed in "Note 2—Business Combinations." System conversion was completed in the fourth quarter of 2024.

The Corporation acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank from the FDIC, as receiver for Republic First Bank.

The scope of management's assessment of effectiveness of the Corporation's internal control over financial reporting as of December 31, 2024, excludes the internal control over financial reporting associated with total acquired assets of approximately $4.8 billion and total net revenues of $156.2 million for the year ended December 31, 2024.

Management assessed the effectiveness of the Corporation's internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).

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Chairman and Chief Executive Officer

/s/ BETH ANN L.

Senior Executive Vice President

and Interim Chief Financial Officer

/s/ RICHARD S.

Senior Executive Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and the Board of Directors

Fulton Financial Corporation:

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank from the FDIC, as receiver for Republic First Bank.

The scope of management's assessment of effectiveness of the Company's internal control over financial reporting as of December 31, 2024, excludes the internal control over financial reporting associated with total acquired assets of approximately $4.8 billion and total net revenues of $156.2 million for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Republic First Bank.

Basis for Opinions

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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• evaluating the methodology used to develop the qualitative adjustments by inspecting management's methodology and development documentation and assessing the effects of these factors on the collective ACL estimate compared with relevant industry practices and Company specific metrics.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company's accounting practices, and potential bias in the accounting estimates.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices, and potential bias in the accounting estimate.

We have served as the Company's auditor since 2002.

4 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data