FULTON FINANCIAL CORP 10-K

Item 8. Financial Statements and Supplementary Data CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per-share data) December 31, 2025 2024 ASSETS Cash and due from banks $ 271,463 $ 279,041 Interest-bearing deposits with other banks 790,146 784,830 Cash and Cash Equivalents 1,061,609 1,063,871 FRB and FHLB stock 121,009 139,574 Loans held for sale 16,316 25,618 Investment securities: AFS, at estimated fair value 3,407,859 3,410,899 HTM, at amortized cost 1,425,885 1,395,569 Net loans 24,144,884 24,044,919 Less: ACL - loans ( 364,462 ) ( 379,156 ) Loans, Net 23,780,422 23,665,763 Net premises and equipment 175,240 195,527 Accrued interest receivable 113,698 117,029 Goodwill and net intangible assets 612,996 635,458 Other assets 1,403,366 1,422,502 Total Assets $ 32,118,400 $ 32,071,810 LIABILITIES Deposits: Noninterest-bearing $ 5,256,096 $ 5,499,760 Interest-bearing 21,333,311 20,629,673 Total Deposits 26,589,407 26,129,433 Borrowings: FHLB advances 250,000 850,000 Senior debt and subordinated debt 367,637 367,316 Other borrowings and interest-bearing liabilities 679,738 564,732 Total Borrowings 1,297,375 1,782,048 Accrued interest payable 17,130 31,620 Other liabilities 724,041 931,384 Total Liabilities 28,627,953 28,874,485 SHAREHOLDERS' EQUITY Preferred stock, no par value, 10,000,000 shares authorized, Series A, 200,000 shares issued as of December 31, 2025 and 2024, liquidation preference of $ 1,000 per share 192,878 192,878 Common stock, $ 2.50 par value, 600,000,000 shares authorized, 247,130,331 shares issued as of December 31, 2025 and 245,946,392 issued as of December 31, 2024 617,826 614,866 Additional paid-in capital 1,803,235 1,789,214 Retained earnings 2,024,618 1,775,620 Accumulated other comprehensive loss ( 198,682 ) ( 287,819 ) Treasury stock, at cost, 67,235,204 shares in 2025 and 63,857,567 shares in 2024 ( 949,428 ) ( 887,434 ) Total Shareholders' Equity 3,490,447 3,197,325 Total Liabilities and Shareholders' Equity $ 32,118,400 $ 32,071,810 See Notes to Consolidated Financial Statements 71 CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per-share data) 2025 2024 2023 Interest Income Loans, including fees $ 1,395,992 $ 1,394,969 $ 1,156,373 Investment securities 187,152 136,650 101,518 Other interest income 33,730 50,577 15,345 Total Interest Income 1,616,874 1,582,196 1,273,236 Interest Expense Deposits 514,693 521,859 292,205 Federal funds purchased 13 2,881 30,417 FHLB advances 24,535 37,793 46,965 Senior debt and subordinated debt 18,404 20,255 21,361 Other borrowings and interest-bearing liabilities 22,882 39,083 28,002 Total Interest Expense 580,527 621,871 418,950 Net Interest Income 1,036,347 960,325 854,286 Provision for credit losses 35,698 71,636 54,036 Net Interest Income After Provision for Credit Losses 1,000,649 888,689 800,250 Non-Interest Income Wealth management 90,584 84,743 75,541 Commercial banking 92,038 84,982 81,160 Consumer banking 58,212 55,504 47,197 Mortgage banking 14,477 13,943 10,388 Gain on acquisition, net of tax — 36,996 — Other 21,457 19,846 14,125 Non-Interest Income Before Investment Securities (Losses) Gains, Net 276,768 296,014 228,411 Investment securities (losses) gains, net ( 2 ) ( 20,283 ) ( 733 ) Total Non-Interest Income 276,766 275,731 227,678 Non-Interest Expense Salaries and employee benefits 443,546 432,821 377,417 Data processing and software 75,091 77,882 66,471 Net occupancy 68,125 69,359 58,019 Other outside services 49,902 60,586 47,724 Intangible amortization 22,462 17,830 2,944 FDIC insurance 20,178 23,829 25,565 Equipment 16,176 17,850 14,390 Marketing 9,288 8,958 9,004 Professional fees 5,493 10,857 8,392 Acquisition-related expenses 1,182 37,635 — Other 80,386 62,184 69,281 Total Non-Interest Expense 791,829 819,791 679,207 Income Before Income Taxes 485,586 344,629 348,721 Income taxes 93,977 55,886 64,441 Net Income 391,609 288,743 284,280 Preferred stock dividends ( 10,248 ) ( 10,248 ) ( 10,248 ) Net Income Available to Common Shareholders $ 381,361 $ 278,495 $ 274,032 PER SHARE: Net income available to common shareholders (basic) $ 2.10 $ 1.59 $ 1.66 Net income available to common shareholders (diluted) 2.08 1.57 1.64 Cash dividends 0.73 0.69 0.64 See Notes to Consolidated Financial Statements 72 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) 2025 2024 2023 Net Income $ 391,609 $ 288,743 $ 284,280 Other comprehensive income, net of tax: Unrealized gains (losses) on AFS investment securities: Net unrealized holding gains (losses) 64,613 ( 22,425 ) 36,023 Reclassification adjustment for securities net change realized in net income 2 15,689 ( 567 ) Amortization of net unrealized gains on AFS investment securities transferred to HTM 5,673 5,609 5,913 Net Unrealized Gains (Losses) on AFS Investment Securities 70,288 ( 1,127 ) 41,369 Unrealized gains on interest rate derivatives used in cash flow hedges: Net unrealized holding gains 739 590 6,998 Reclassification adjustment for net change realized in net income 15,708 18,141 19,995 Net Unrealized Gains on Interest Rate Derivatives Used in Cash Flow Hedges 16,447 18,731 26,993 Defined benefit pension plan and postretirement benefits: Unrecognized pension and postretirement income 2,826 7,279 4,777 Amortization of net unrecognized pension and postretirement income (loss) ( 424 ) ( 422 ) 57 Net Unrealized Gains (Losses) on Defined Benefit Pension and Postretirement Plans 2,402 6,857 4,834 Other Comprehensive Income, Net of Tax 89,137 24,461 73,196 Total Comprehensive Income $ 480,746 $ 313,204 $ 357,476 See Notes to Consolidated Financial Statements 73 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in thousands, except per share data) Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Shares Outstanding Amount Shares Outstanding Amount Retained Earnings Treasury Stock Total Balance at December 31, 2022 200 $ 192,878 167,599 $ 561,511 $ 1,541,840 $ 1,450,758 $ ( 385,476 ) $ ( 781,754 ) $ 2,579,757 Net income 284,280 284,280 Other comprehensive loss 73,196 73,196 Common stock issued (1) 231 578 2,548 34 3,160 Dividend reinvestment activity 408 ( 132 ) 5,691 5,559 Stock-based compensation awards (repurchases), net 592 2,313 8,604 ( 3,936 ) 6,981 Acquisition of treasury stock ( 5,029 ) ( 77,056 ) ( 77,056 ) Preferred stock dividend ( 10,248 ) ( 10,248 ) Common stock dividends - $ 0.64 per share ( 105,490 ) ( 105,490 ) Balance at December 31, 2023 200 192,878 163,801 564,402 1,552,860 1,619,300 ( 312,280 ) ( 857,021 ) 2,760,139 Net income 288,743 288,743 Other comprehensive income 24,461 24,461 Common stock issued (2) 19,339 48,348 227,052 12 275,412 Dividend reinvestment activity 322 902 4,753 5,655 Stock-based compensation awards (repurchases), net 561 2,116 8,400 ( 4,830 ) 5,686 Acquisition of treasury stock ( 1,934 ) ( 30,348 ) ( 30,348 ) Preferred stock dividend ( 10,248 ) ( 10,248 ) Common stock dividends - $ 0.69 per share ( 122,175 ) ( 122,175 ) Balance at December 31, 2024 200 192,878 182,089 614,866 1,789,214 1,775,620 ( 287,819 ) ( 887,434 ) 3,197,325 Net income 391,609 391,609 Other comprehensive income 89,137 89,137 Common stock issued (3) 131 328 2,054 2,382 Dividend reinvestment activity 290 1,273 4,054 5,327 Stock-based compensation awards (repurchases), net 671 2,632 10,694 ( 6,961 ) 6,365 Acquisition of treasury stock ( 3,286 ) ( 59,087 ) ( 59,087 ) Preferred stock dividend ( 10,248 ) ( 10,248 ) Common stock dividends - $ 0.73 per share ( 132,363 ) ( 132,363 ) Balance at December 31, 2025 200 $ 192,878 179,895 $ 617,826 $ 1,803,235 $ 2,024,618 $ ( 198,682 ) $ ( 949,428 ) $ 3,490,447 (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. (3) Issuance of common stock includes issuance in connection with the Corporation's ESPP. See Notes to Consolidated Financial Statements 74 CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 391,609 $ 288,743 $ 284,280 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 35,698 71,636 54,036 Depreciation and amortization of premises and equipment 28,276 39,164 30,055 Net amortization of investment securities premiums 1,378 764 11,231 Net accretion of loan discounts ( 47,750 ) ( 38,748 ) — Investment securities losses, net 2 20,283 733 Gain on sales of mortgage loans held for sale ( 8,788 ) ( 8,186 ) ( 5,094 ) Proceeds from sales of mortgage loans held for sale 528,935 547,691 363,406 Originations of mortgage loans held for sale ( 510,845 ) ( 549,965 ) ( 366,206 ) Intangible amortization 22,462 17,830 2,944 Amortization of issuance costs and discounts on long-term borrowings 321 710 750 Gain on acquisition, net of tax — ( 36,996 ) — Loss (gain) on disposal of premises and equipment 1,440 ( 30 ) — Gain on sale-leaseback transaction ( 606 ) ( 20,266 ) — Stock-based compensation 13,326 10,516 12,540 Net change in deferred income tax ( 4,168 ) ( 23,187 ) 24,666 Net change in accrued salaries and benefits 665 19,463 ( 5,868 ) Net change in life insurance cash surrender value ( 16,196 ) ( 19,872 ) ( 27,664 ) Other changes, net ( 131,276 ) 97,015 ( 16,825 ) Total adjustments ( 87,126 ) 127,822 78,704 Net cash provided by operating activities 304,483 416,565 362,984 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of AFS investment securities 14,966 2,300,487 213,424 Proceeds from principal repayments and maturities of AFS investment securities 716,270 334,405 149,211 Proceeds from principal repayments and maturities of HTM investment securities 107,501 56,455 59,685 Purchase of AFS investment securities ( 654,245 ) ( 1,744,778 ) ( 79,053 ) Purchase of HTM investment securities ( 132,024 ) ( 177,947 ) — Net change in FRB and FHLB stock 18,565 22,762 5,781 Net change in loans ( 101,795 ) ( 149,081 ) ( 1,100,816 ) Net purchases of premises and equipment ( 20,146 ) ( 42,453 ) ( 32,958 ) Settlement of bank owned life insurance 2,947 2,687 2,264 Proceeds from sale-leaseback transaction 11,323 51,123 — Net cash received for acquisition — 1,018,371 — Net change in tax credit investments ( 45,541 ) ( 42,699 ) ( 26,753 ) Net cash (used in) provided by investing activities ( 82,179 ) 1,629,332 ( 809,215 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in demand and savings deposits 603,635 478,593 ( 1,198,222 ) Net change in time deposits and brokered deposits ( 143,661 ) 1,074 2,086,307 Net change in other borrowings ( 484,994 ) ( 1,951,161 ) ( 379,431 ) Repayments of senior debt and subordinated debt — ( 168,778 ) ( 5,000 ) Net proceeds from issuance of common stock 7,709 270,582 3,160 Dividends paid ( 141,207 ) ( 131,698 ) ( 115,738 ) Acquisition of treasury stock ( 66,048 ) ( 30,348 ) ( 77,056 ) Net cash (used in) provided by financing activities ( 224,566 ) ( 1,531,736 ) 314,020 Net (decrease) increase in Cash and Cash Equivalents ( 2,262 ) 514,161 ( 132,211 ) Cash and Cash Equivalents at Beginning of Period 1,063,871 549,710 681,921 Cash and Cash Equivalents at End of Period $ 1,061,609 $ 1,063,871 $ 549,710 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ 595,017 $ 658,778 $ 394,052 Income taxes 112,688 29,116 25,319 75 Business Combination 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 76 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business: The Corporation is a financial holding company that provides a full range of banking and financial services to businesses and consumers through its wholly-owned banking subsidiary, Fulton Bank. In addition, the Parent Company owns the following non-bank subsidiaries: Fulton Financial Realty Company, Central Pennsylvania Financial Corp., FFC Penn Square, Inc., Fulton Insurance Services Group, Inc. and Fulton Community Partner, LLC. Collectively, the Parent Company and its subsidiaries are referred to as the Corporation. The Corporation's 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's primary competition is other financial services providers operating in its region. Competitors also include financial services providers located outside the Corporation's geographic market as a result of the growth in electronic delivery channels. The Corporation is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by such regulatory agencies. The Corporation offers, through its banking subsidiary, a full range of retail and commercial banking services primarily in Pennsylvania, Delaware, Maryland, New Jersey and Virginia. Basis of Financial Statement Presentation: The Consolidated Financial Statements have been prepared in accordance with GAAP and include the accounts of the Parent Company and all wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosed amount of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The Corporation evaluates subsequent events through the date of the filing of this report with the SEC. Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents consists of cash and due from banks and interest-bearing deposits with other banks, which includes restricted cash. Restricted cash comprises cash balances required to be maintained with the FRB, based on customer transaction deposit account levels, and cash balances provided as collateral on derivative contracts and other contracts. See "Note 3 - Restrictions on Cash and Cash Equivalents" for additional information. FRB and FHLB Stock: The Bank is a member of the FRB and FHLB and is required by federal law to hold stock in these institutions according to predetermined formulas. These restricted investments are carried at cost on the Consolidated Balance Sheets and are periodically evaluated for impairment. Investments: Debt securities are classified as HTM at the time of purchase when the Corporation has both the intent and ability to hold these investments until they mature. Such debt securities are carried at cost, adjusted for amortization of premiums and accretion of discounts using the effective yield method. The Corporation does not engage in trading activities; however, since the investment portfolio serves as a source of liquidity, most debt securities are classified as AFS. AFS investment 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. HTM Debt Securities: Expected credit losses on HTM debt securities would be recorded in the ACL on HTM debt securities. As of December 31, 2025, no HTM debt securities required an ACL as these investments consist solely of agency-guaranteed residential mortgage-backed and commercial mortgage-backed securities. AFS Debt Securities : The Bank's AFS rated debt securities are investment grade. In evaluating credit losses on debt securities, management considers factors such as the credit quality of the investments, the credit rating of the security, and the delinquency history of the security. As of December 31, 2025, no AFS debt securities required an ACL. Fair Value Option: The Corporation has elected to measure mortgage loans held for sale at fair value. Derivative financial instruments related to mortgage banking activities are also recorded at fair value, as detailed under the heading "Derivative Financial Instruments," below. The Corporation determines fair value for its mortgage loans held for sale based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Changes in fair values during the period are recorded as components of mortgage banking income on the 77 Consolidated Statements of Income. Interest income earned on mortgage loans held for sale is classified in interest income on the Consolidated Statements of Income. Loans : Loans are stated at amortized cost, except for mortgage loans held for sale, which are carried at fair value. Interest income on loans is accrued as earned. In general, loans are placed on non-accrual status once they become 90 days delinquent as to principal or interest. In certain cases, a loan may be placed on non-accrual status prior to being 90 days delinquent if there is an indication that the borrower is having difficulty making payments, or the Corporation believes it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. When interest accruals are discontinued, unpaid interest previously credited to income is reversed. Non-accrual loans may be restored to accrual status when all delinquent principal and interest has been paid currently for six consecutive months or the loan is considered adequately secured and in the process of collection. The Corporation generally applies payments received on non-accruing loans to principal until such time as the principal is paid off, after which time any payments received are recognized as interest income. If the Corporation believes that all amounts outstanding on a non-accrual loan will ultimately be collected, payments received subsequent to its classification as a non-accrual loan are allocated between interest income and principal. A loan that is 90 days delinquent may continue to accrue interest if the loan is both adequately secured and is in the process of collection. Past due status is determined based on contractual due dates for loan payments. An adequately secured loan is one that has collateral with a supported fair value that is sufficient to discharge the debt, and/or has an enforceable guarantee from a financially responsible party. A loan is considered to be in the process of collection if collection is proceeding through legal action or through other activities that are reasonably expected to result in repayment of the debt or restoration to current status in the near future. Loans deemed to be a loss are written off through a charge against the ACL. Closed-end consumer loans are generally charged- off when they become 120 days past due ( 180 days for open-end consumer loans) if they are not adequately secured by real estate. All other loans are evaluated for possible charge-off when it is probable that the balance will not be collected, based on the ability of the borrower to pay and the value of the underlying collateral, if any. Principal recoveries of loans previously charged-off are recorded as increases to the ACL. Loan Origination Fees and Costs: Loan origination fees and the related direct origination costs are deferred and amortized over the life of the loan as an adjustment to interest income using the effective yield method. For mortgage loans sold, net loan origination fees and costs are included in the gain or loss on sale of the related loan, as components of mortgage banking. Loan Modifications: Loans are accounted for and reported as modified when, for economic or legal reasons, the Corporation grants a concession to a borrower experiencing financial difficulty that it would not otherwise consider. Concessions, whether negotiated or imposed by bankruptcy, granted under a loan modification typically involve a more than insignificant deferral of scheduled loan payments, an extension of a loan's stated maturity date, a reduction in the interest rate or a forgiveness of principal. Because the effect of most modifications made to loans to borrowers experiencing financial difficulty is already included in the ACL, a change to the ACL is generally not recorded upon modification. When principal forgiveness is provided, the amortized cost basis of the forgiven portion of the loan is written off against the ACL. Allowance for Credit Losses: The Corporation follows ASU 2016-13 Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments . The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including loans and HTM debt securities. It also applies to OBS credit exposures, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments, and net investments in leases recognized by a lessor in accordance with ASC Topic 842. The Corporation has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income. The ACL consists of loans evaluated collectively and individually for expected credit losses. The ACL represents an estimate of expected credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The ACL is increased or decreased (when the provision for credit losses is negative) through the provision for credit losses and increased or decreased (when recoveries of loans previously charged off exceed loans charged off) by charge-offs, net of 78 recoveries. The reserve for OBS credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other OBS credit exposures. Loans: The ACL is an estimate of the expected losses to be realized over the life of the loans in the portfolio. The ACL is determined for two distinct categories of loans: (i) loans evaluated collectively for expected credit losses and (ii) loans evaluated individually for expected credit losses. Loans Evaluated Collectively : Loans evaluated collectively for expected credit losses include accruing loans and non-accrual loans where the total commitment amount is less than $1 million. In determining the ACL, the Corporation uses three inputs to model the estimate. These inputs are the PD rate which estimates the likelihood that a borrower will be unable to meet its debt obligations, the LGD rate which estimates the percentage of an asset that is lost if a borrower defaults, and the EAD balance which estimates the gross exposure under a facility upon default. The PD models were developed based on historical default data. Both internal and external variables are evaluated in the process. The main internal variables are risk rating or delinquency history and indicators of default. The external variables are economic variables obtained from third-party forecasts. The PD models are transition matrix models that utilize historical credit observations and incorporate economic forecasts to project future default rates using a linear regression methodology for each loan segment. The LGD model uses a vintage loss approach that estimates LGD rates based on the bank’s historical loss experience for each loan segment. The EAD incorporates a prepayment rate and applies the PD rates to estimate the projected exposure at default across the life of each loan. The ACL is calculated by applying the LGD to the EAD at each period across the life of each loan. The ACL incorporates the Corporation’s historical credit observations, current conditions and reasonable and supportable forecasts that are based on the projected performance of specific economic variables that are statistically correlated with historical PD rates. The reasonable and supportable forecast extends to 24 months and reverts back to an average PD rate using a straight-line reversion methodology over a 12 month period. The ACL is highly sensitive to the economic forecasts used to develop the reserve. As such, the calculation of the ACL is inherently subjective and requires management to exercise judgment. The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative models. 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. Loans Evaluated Individually : 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 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. For loans measured using the fair value of collateral, if the analysis determines that sufficient collateral value would be available for repayment of the debt, then no allocations would be assigned to those loans. Collateral could be in the form of real estate or business assets, such as accounts receivable or inventory, in the case of commercial and industrial loans. Commercial and industrial loans may also be secured by real estate. For loans secured by real estate, estimated fair values are determined primarily through appraisals performed by third-party appraisers, discounted to arrive at expected net sale proceeds. For collateral-dependent loans, estimated real estate fair values are also net of estimated selling costs. When a real estate secured loan is impaired, a decision is made regarding whether an updated appraisal of the real estate is necessary. This decision is based on various considerations, including: the age of the most recent appraisal; the loan-to-value ratio based on the original appraisal; the condition of the property; the Corporation's experience and knowledge of the real estate market; the purpose of the loan; market factors; payment status; the strength of any guarantors; and the existence and age of other indications of value such as broker price opinions, among others. The Corporation generally obtains updated appraisals performed by third-party appraisers for impaired loans secured predominantly by real estate every 12 months. When updated appraisals are not obtained for loans secured by real estate, fair values are estimated based on the original appraisal values, as long as the original appraisal indicated an acceptable loan-to-value position and there has not been a significant deterioration in the collateral value since the original appraisal was performed. 79 For loans with principal balances greater than or equal to $1.0 million secured by non-real estate collateral, such as accounts receivable or inventory, estimated fair values are determined based on borrower financial statements, inventory listings, accounts receivable agings or borrowing base certificates provided by the borrower. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. Liquidation or collection discounts are applied to these assets based upon existing loan evaluation policies. Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification. For commercial loans, commercial mortgages, leases and other loans and construction loans to commercial borrowers, 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 rating categories is a significant component of the ACL methodology for these loans, which bases the PD on this migration. Assigning risk ratings involves judgment. Risk ratings may be changed based on ongoing monitoring procedures, or if specific loan review assessments identify a deterioration or an improvement in the loan. The following is a summary of the Corporation's internal risk rating categories: • Pass : These loans do not currently pose undue credit risk and can range from the highest to average quality, depending on the degree of potential risk. • Special Mention : These loans have a heightened credit risk, but not to the point of justifying a classification of Substandard. Loans in this category are currently acceptable but, are nevertheless potentially weak. • Substandard or Lower : These loans are inadequately protected by current sound worth and paying capacity of the borrower. There exists a well-defined weakness or weaknesses that jeopardize the normal repayment of the debt. The Corporation considers risk factors such as: local and national economic conditions; trends in delinquencies and non-accrual loans; the diversity of borrower industry types; and the composition of the portfolio by loan type. OBS Credit Exposures: The reserve for OBS credit exposures is recorded in other liabilities on the Consolidated Balance Sheets, and represents management's estimate of expected losses in its unfunded loan commitments and other OBS credit exposures. The reserve for OBS credit exposures specific to unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). The reserve for OBS credit exposures is increased or decreased by charges or reductions to expense, through the provision for credit losses. Premises and Equipment: Premises and equipment are stated at cost, less accumulated depreciation and amortization. The provision for depreciation and amortization is generally computed using the straight-line method over the estimated useful lives of the related assets, which are a maximum of 50 years for buildings and improvements, 8 years for furniture and 7 years for equipment. Leasehold improvements are amortized over the shorter of the useful life or the non-cancelable lease term. Premises and equipment acquired in a business combination are initially recorded at fair value and subsequently carried at cost less depreciation and amortization. See "Note 6 - Premises and Equipment" for additional information. OREO: Assets acquired in settlement of mortgage loan indebtedness are recorded as OREO and are included in other assets on the Consolidated Balance Sheets, initially at the lower of the estimated fair value of the asset, less estimated selling costs, or the carrying amount of the loan. Costs to maintain the assets and subsequent gains and losses on sales are included in other non-interest expense on the Consolidated Statements of Income. MSRs: The estimated fair value of MSRs related to residential mortgage loans sold and serviced by the Corporation is recorded as an asset upon the sale of such loans. MSRs are amortized as a reduction to mortgage servicing income, included as a component of mortgage banking income on the Consolidated Statements of Income, over the estimated lives of the underlying loans. MSRs are stratified and evaluated for impairment by comparing each stratum's carrying amount to its estimated fair value. Fair values are determined through a discounted cash flows valuation completed by a third-party valuation expert. Significant inputs to the valuation include expected net servicing income, the discount rate and the expected lives of the underlying loans. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections. To the extent the amortized cost of the MSRs exceeds their estimated fair value, a valuation allowance is established through a charge against servicing income. If subsequent valuations indicate that impairment no longer exists, the valuation allowance is reduced through an increase to servicing income. See "Note 8 - Mortgage Servicing Rights" for additional information. 80 Derivative Financial Instruments: The Corporation manages its exposure to certain interest rate risk through the use of derivatives. Certain of the Corporation's outstanding derivative contracts are designated as hedges, and none are entered into for speculative purposes. The Corporation enters into derivative contracts that are intended to economically hedge certain of its risks, even if hedge accounting does not apply or the Corporation elects not to apply hedge accounting. The Corporation records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Corporation has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. The Corporation does not have any derivative instruments designated as fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For derivatives designated as cash flow hedges where hedge accounting is applied, changes in fair value are recognized in OCI, net of tax. For derivatives where hedge accounting does not apply, changes in fair value are recognized in earnings as components of non-interest income or non-interest expense on the Consolidated Statements of Income. Derivative contracts create counterparty credit risk with both the Corporation's customers and with institutional derivative counterparties. The Corporation manages counterparty credit risk through its credit approval processes, monitoring procedures and obtaining adequate collateral, when the Corporation determines it is appropriate to do so and in accordance with counterparty contracts. For each of the derivatives, gross derivative assets and liabilities are recorded in other assets and other liabilities, respectively, on the Consolidated Balance Sheets. Related gains and losses on these derivative instruments are recorded in other changes, net on the Consolidated Statements of Cash Flows. Mortgage Banking Derivatives In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed-rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Interest Rate Derivatives - Non-Designated Hedges The Corporation enters into interest rate derivatives with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Corporation simultaneously enters into interest rate derivatives with dealer counterparties, with identical notional amounts and terms. The net result of these interest rate derivatives is that the customer pays a fixed rate of interest and the Corporation receives a floating rate. As the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. The Corporation's existing OBS credit exposures result from participation in interest rate derivatives provided by external lenders as part of loan participation arrangements and, therefore, are not used to manage interest rate risk in the Corporation's assets or liabilities. The Corporation is required to clear all eligible interest rate derivative contracts with a clearing agent and is subject to the regulations of the CFTC. Cash Flow Hedges of Interest Rate Risk The Corporation's objectives in using interest rate derivatives are to reduce volatility in net interest income and interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation primarily uses interest rate derivatives as part of its interest rate risk management strategy. The Corporation enters into interest rate derivatives designated as cash flow hedges to hedge the cash flows associated with existing loans and borrowings. 81 For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in OCI, net of tax, and subsequently reclassified into interest income or interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in OCI related to derivatives will be reclassified to interest income or interest expense as interest payments are made on the Corporation's variable-rate loans and borrowings. Foreign Exchange Contracts The Corporation enters into foreign exchange contracts to accommodate the needs of its customers. Foreign exchange contracts are commitments to buy or sell foreign currency on a specific date at a contractual price. The Corporation limits its foreign exchange exposure with customers by entering into contracts with institutional counterparties to mitigate its foreign exchange risk. The Corporation also holds certain amounts of Foreign Currency Nostro Accounts. The Corporation limits the total overnight net foreign currency open positions, which is defined as an aggregate of all outstanding contracts, to $ 0.5 million. See "Note 11 - Derivative Financial Instruments" for additional information. Balance Sheet Offsetting: Certain financial assets and liabilities may be eligible for offset on the Consolidated Balance Sheets because they are subject to master netting arrangements or similar agreements. The Corporation has elected to net its financial assets and liabilities designated as cash flow hedges when offsetting is permitted. The Corporation has elected not to offset the remaining assets and liabilities subject to such arrangements on the Consolidated Financial Statements. The Corporation is a party to interest rate derivatives with financial institution counterparties and customers. Under these agreements, the Corporation has the right to net-settle multiple contracts with the same counterparty in the event of default on, or termination of, any one contract. Cash collateral is posted by the party with a net liability position in accordance with contract thresholds and can be used to settle the fair value of the interest rate derivatives in the event of default. A daily settlement occurs through a clearing agent for changes in the fair value of centrally cleared derivatives. Not all derivatives are required to be cleared through a daily clearing agent. As a result, the total fair values of interest rate derivative assets and derivative liabilities recognized on the Consolidated Balance Sheets are not equal and offsetting. The Corporation is also a party to foreign exchange contracts with financial institution counterparties under which the Corporation has the right to net-settle multiple contracts with the same counterparty in the event of default on, or termination of, any one contract. As with interest rate derivatives, cash collateral is posted by the party with a net liability position in accordance with contract thresholds and can be used to settle the fair value of the foreign exchange contracts in the event of default. For additional information on balance sheet offsetting, see "Note 11 - Derivative Financial Instruments." Income Taxes: The Corporation utilizes the asset and liability method in accounting for income taxes. Under this method, DTAs and deferred tax liabilities are determined based upon the difference between the values of the assets and liabilities as reflected in the financial statements and their related tax basis using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. As changes in tax law or rates are enacted, DTAs and deferred tax liabilities are adjusted through income tax expense. In assessing the realizability of DTAs, management considers whether it is more likely than not that some portion or all of the DTAs will not be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income and tax planning strategies which will create taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, the amount of taxes paid in available carryback years, projected future taxable income, and, if necessary, tax planning strategies in making this assessment. A valuation allowance is provided against DTAs unless it is more likely than not that such DTAs will be realized. ASC Topic 740, "Income Taxes" creates a single model to address uncertainty in tax positions, and clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in an enterprise's financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The liability for unrecognized tax benefits is included in other liabilities within the Consolidated Balance Sheets. See "Note 13 - Income Taxes" for additional information. Stock-Based Compensation: The Corporation grants equity awards to employees, consisting of RSUs and PSUs under its Employee Equity Plan. In addition, employees may purchase stock under the Corporation's ESPP. 82 The Corporation also grants equity awards to non-employee members of its Board of Directors and Fulton Bank's Board of Directors under the Directors' Plan. Under the Directors' Plan, the Corporation can grant equity awards to non-employee Parent Company and subsidiary bank directors in the form of RSUs or common stock. Recent grants of equity awards under the Directors' Plan have been limited to RSUs. Equity awards issued under the Employee Equity Plan are generally granted annually and become fully vested over or after a 3-year vesting period. The vesting period for non-performance-based awards represents the period during which employees are required to provide service in exchange for such awards. Equity awards under the Directors' Plan are generally granted annually and fully vest after a 1-year vesting period. Certain events, as defined in the Employee Equity Plan and the Directors' Plan, result in the acceleration of the vesting of equity awards. RSUs and PSUs earn dividends during the vesting period, which are forfeitable if the awards do not vest. The fair value of RSUs granted to employees or directors is recognized as compensation expense over the vesting period for such awards. Compensation expense for PSUs is also recognized over the service period. The fair value of RSUs and a majority of PSUs are based on the trading price of the Corporation's stock on the date of grant. The fair value of certain PSUs are estimated through the use of the Monte Carlo valuation methodology as of the date of grant. See "Note 16 - Stock-Based Compensation Plans" for additional information. 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 is a single segment. See "Note 20 - Segment Reporting" for additional information. Financial Guarantees : Financial guarantees, which consist primarily of standby and commercial letters of credit, are accounted for by recognizing a liability equal to the fair value of the guarantees and crediting the liability to income over the term of the guarantee. Fair value is estimated based on the fees currently charged to enter into similar agreements with similar terms. Goodwill and Intangible Assets: The Corporation accounts for its acquisitions using the purchase accounting method. Purchase accounting requires that all assets acquired and liabilities assumed, including certain intangible assets that must be recognized, be recorded at their estimated fair values as of the acquisition date. 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. Write-downs of the balance, if necessary as a result of the impairment test, are charged to expense in the period in which goodwill is determined to be impaired. The Corporation performs its annual assessment of goodwill impairment in the fourth quarter of each year. If certain events occur which indicate goodwill might be impaired between annual assessments, goodwill would be evaluated when such events occur. Intangible assets are amortized over their estimated lives. Some intangible assets have indefinite lives and are, therefore, not amortized. All intangible assets must be evaluated for impairment if certain events occur. Any impairment write-downs are recognized as non-interest expense on the Consolidated Statements of Income. See "Note 7 - Goodwill and Intangible Assets" for additional information. VIEs: ASC Topic 810 provides guidance on when to consolidate certain VIEs in the financial statements of the Corporation. VIEs are entities in which equity investors do not have a controlling financial interest or do not have sufficient equity at risk for the entity to finance activities without additional financial support from other parties. VIEs are assessed for consolidation under ASC Topic 810 when the Corporation holds variable interests in these entities. The Corporation consolidates VIEs when it is deemed to be the primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has the power to make decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. The Corporation makes investments in certain community development projects, the majority of which generate tax credits under various federal programs, including TCIs. These investments are made throughout the Corporation's market area as a means of supporting the communities it serves. The Corporation typically acts as a limited partner or member of a limited liability company in its TCIs and does not exert control over the operating or financial policies of the partnership or limited liability company. Tax credits earned are subject to recapture by federal taxing authorities based upon compliance requirements to be met at the project level. 83 Because the Corporation owns 100% of the equity interests in its NMTC investments, these investments were consolidated based on ASC Topic 810 as of December 31, 2025 and 2024. Investments in affordable housing projects were not consolidated based on management's assessment of the provisions of ASC Topic 810. TCIs are tested for impairment when events or changes in circumstances indicate that it is more likely than not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the current carrying value exceeds its aggregated remaining value of the tax benefits of the investment. There were no impairment losses recognized for the Corporation's TCIs in 2025, 2024 or 2023. For additional information, see "Note 13 - Income Taxes." Fair Value Measurements: Assets and liabilities are categorized in a fair value hierarchy for the inputs to valuation techniques used to measure assets and liabilities at fair value using the following three categories (from highest to lowest priority): • Level 1 - Inputs that represent quoted prices for identical instruments in active markets. • Level 2 - Inputs that represent quoted prices for similar instruments in active markets, or quoted prices for identical instruments in non-active markets. Also included are valuation techniques whose inputs are derived principally from observable market data other than quoted prices, such as interest rates or other market-corroborated means. • Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued. The Corporation has categorized all assets and liabilities required to be measured at fair value on both a recurring and nonrecurring basis into the above three levels. See "Note 19 - Fair Value Measurements" for additional information. Revenue Recognition: The sources of revenue for the Corporation are interest income from loans, leases and investments and non-interest income. Non-interest income is earned from various banking and financial services that the Corporation offers through its subsidiaries. Revenue is recognized as earned based on contractual terms, as transactions occur, or as services are provided. Following is further detail of the various types of revenue the Corporation earns and when it is recognized: Interest income : Interest income is recognized on an accrual basis according to loan and lease agreements, investment securities contracts or other written contracts. Wealth management services: Consists of income from trust commissions, brokerage, money market and insurance commissions. 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. Money market income is based on the balances held in trust accounts and is recognized monthly. Insurance commissions are earned and recognized when policies are originated. Currently, no investment management and trust service income is based on performance or investment results. Commercial and consumer banking income: Consists of cash management, overdraft and other service charges on deposit accounts as well as branch fees, ATM fees, debit and credit card income and merchant services fees. Also included are letter of credit fees, foreign exchange income and interest rate derivative fees. Revenue is primarily transactional and recognized when earned at the time the transactions occur. Mortgage banking income: Consists of gains or losses on the sale of residential mortgage loans and mortgage loan servicing income. Other Income: Includes gains on sales of SBA loans, cash surrender value of life insurance, and other miscellaneous income. Leases: All leases with an initial term greater than 12 months recognize: (1) a ROU asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term; and (2) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, each measured on a discounted basis. The Corporation elected to not separate lease and non-lease components. As a lessee, the majority of the operating lease portfolio consists of real estate leases for the Corporation's financial centers, land and office space. The operating leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for 5 years or more. ROU assets and lease liabilities are not recognized for leases with an initial term of 12 months or less. 84 Certain real estate leases have lease payments that adjust based on annual changes in the CPI or at a stated contractual rate. The leases that are dependent upon the CPI or stated contractual rate are initially measured using the CPI or contractual rate at the commencement date and are included in the measurement of the lease liability. Operating lease expense represents fixed lease payments for operating leases recognized on a straight-line basis over the applicable lease term. Variable lease expense represents expenses such as the payment of real estate taxes, insurance and common area maintenance based on the Corporation's pro-rata share. Sublease income consists mostly of operating leases for space within the Corporation's offices and financial centers and is recorded as a reduction to net occupancy expense on the Consolidated Statements of Income. See "Note 18 - Leases" for additional information. Defined Benefit Plan: Net periodic pension costs are funded based on the requirements of federal laws and regulations. The determination of net periodic pension costs is based on assumptions about future events that will affect the amount and timing of required benefit payments under the plan. These assumptions include demographic assumptions such as retirement age and mortality, a discount rate used to determine the current benefit obligation, form of payment election and a long-term expected rate of return on plan assets. Net periodic pension expense includes interest cost, based on the assumed discount rate, an expected return on plan assets, amortization of prior service cost or credit and amortization of net actuarial gains or losses. The Corporation curtailed the Pension Plan in 2008, with no additional benefits accruing. In connection with the Prudential Bancorp merger, the Corporation assumed the obligations of Prudential Bancorp under the Prudential Bancorp Pension Plan that had previously been closed to new participants. Net periodic pension cost is recognized in salaries and employee benefits on the Consolidated Statements of Income. For additional information, see "Note 17 - Employee Benefit Plans." Business Combinations: Business combinations are accounted for using the acquisition method of accounting. 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, unless the acquisition is a bargain purchase. Results of the operations of the acquired entity are included in the Consolidated Statements of Income from the acquisition date. Acquisition costs are expensed as incurred. Recently Adopted Accounting Standards In December 2023, FASB issued ASU 2023-08 Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08") . This update provides guidance for crypto assets to be carried at fair value and requires additional disclosures. The Corporation adopted ASU 2023-08 on January 1, 2025, and it did not have an impact on its Consolidated Financial Statements. The Corporation does not own crypto assets. In December 2023, FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") . This update requires companies to disclose specific categories in the income tax rate reconciliation and requires additional information for certain reconciling items. The Corporation adopted ASU 2023-09 on December 15, 2025. The adoption of ASU 2023-09 changed the presentation of "Note 13 - Income Taxes," but otherwise did not 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 adopted ASU 2024-01 on January 1, 2025, and it did not have a material impact on its Consolidated Financial Statements. In March 2025, FASB issued ASU 2025-02 Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 ("ASU 2025-02"). This update removes SEC guidance provided in SAB No. 121, Accounting for Obligations To Safeguard Crypto-Assets an Entity Holds for its Platform Users . The Corporation retrospectively adopted ASU 2025-02 on January 1, 2025, and it did not have an impact on its Consolidated Financial Statements. In November 2025, FASB issued ASU 2025-08 Financial Instruments - Credit Losses (Topic 326): Purchased Loans ("ASU 2025-08"). This update simplifies acquisition accounting by removing dual models. It also reduces earnings volatility and improves comparability across institutions. The Corporation early adopted ASU 2025-08 prospectively on October 1, 2025, and it did not have a material impact on its Consolidated Financial Statements. 85 Recently Issued Accounting Standards In November 2024, FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense ("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 1, 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. In January 2025, FASB issued ASU 2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01") . This update clarifies the effective date of ASU 2024-03. The Corporation will adopt ASU 2025-01 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-01 to have a material impact on its Consolidated Financial Statements. In May 2025, FASB issued ASU 2025-03 Business Combination (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in an Acquisition of a Variable Interest Entity ("ASU 2025-03") . This update addresses the determination of the accounting acquirer in an acquisition of a variable interest entity. The Corporation will adopt ASU 2025-03 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-03 to have a material impact on its Consolidated Financial Statements. In May 2025, FASB issued ASU 2025-04 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) - Clarifications to Share-Based Consideration Payable to a Customer ("ASU 2025-04") . This update revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy for most awards granted to customers, and clarifies the applicability of the variable consideration constraint. The Corporation will adopt ASU 2025-04 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-04 to have a material impact on its Consolidated Financial Statements. In July 2025, FASB issued ASU 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05") . This update allows public companies to use a practical expedient when estimating credit losses on current receivables and current customer contracts. The Corporation will adopt ASU 2025-05 on January 1, 2026. The Corporation does not expect the adoption of ASU 2025-05 to have a material impact on its Consolidated Financial Statements. In September 2025, FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06") . This update modernizes internal-use software guidance to adapt to the agile basis predominantly used to develop software. The effective date of the amendment is January 1, 2028 with early adoption permitted as of the beginning of an annual reporting period. The Corporation plans to early adopt ASU 2025-06 as of January 1, 2026 on a prospective basis. The Corporation does not expect the adoption of ASU 2025-06 to have a material impact on its Consolidated Financial Statements. In September 2025, FASB issued ASU 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract ("ASU 2025-07") . This update refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting and clarifies guidance under Topic 606 for share-based noncash consideration from a customer in revenue contracts. The Corporation will adopt ASU 2025-07 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-07 to have a material impact on its Consolidated Financial Statements. In November 2025, FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements ("ASU 2025-09") . This update more closely aligns hedge accounting and financial reporting with risk management activities. The effective date of the amendment is January 1, 2027 with early adoption permitted. The Corporation plans to early adopt ASU 2025-09 as of January 1, 2026 on a prospective basis. The Corporation does not expect the adoption of ASU 2025-09 to have a material impact on its Consolidated Financial Statements. In December 2025, FASB issued ASU 2025-10 Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities ("ASU 2025-10") . This update provides accounting guidance for business entities that receive government grants. The Corporation will adopt ASU 2025-10 on January 1, 2029. The Corporation does not expect the adoption of ASU 2025-10 to have a material impact on its Consolidated Financial Statements. 86 In December 2025, FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025-11") . This update improves navigability of the required interim disclosures and clarifies when that guidance is applicable. The Corporation will adopt ASU 2025-11 on January 1, 2028. The Corporation does not expect the adoption of ASU 2025-11 to have a material impact on its Consolidated Financial Statements. In December 2025, FASB issued ASU 2025-12 Codification Improvements ("ASU 2025-12") . This update makes changes to the Accounting Standards Codification affecting a wide variety of topics to clarify, correct errors and make minor improvements. The Corporation will adopt ASU 2025-12 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-12 to have a material impact on its Consolidated Financial Statements. Reclassifications Certain amounts in the 2024 Consolidated Financial Statements and notes have been reclassified to conform to the 2025 presentation. NOTE 2 - BUSINESS COMBINATIONS Republic First Bank On the Acquisition Date, Fulton Bank completed the Republic First Transaction and 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 fair values. The determination of fair values required management to make certain estimates and assumptions about discount rates, future expected cash flows and market conditions at the time of the Republic First Transaction. The financial settlement process between the Bank and the FDIC concluded on April 25, 2025. The measurement period of determining the fair value of assets acquired and liabilities assumed in connection with the Republic First Transaction has closed. No adjustments to the preliminary amounts were required and the fair values presented herein are final. The excess of the fair value of net assets acquired and the cash consideration received from the FDIC over the fair value of liabilities assumed was recorded as a gain on acquisition of $ 37.0 million, net of income taxes. 87 The following table summarizes the consideration transferred and the 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: Cash and due from banks 208,451 Investment securities 1,938,571 Loans 2,495,810 Premises and equipment 184 CDI 92,600 FHLB Stock 37,931 Accrued interest receivable 16,164 Other assets 10,179 Total assets 4,799,890 Liabilities assumed: Deposits 4,112,143 Borrowings 1,413,751 Accrued interest payable 33,444 Other liabilities 2,641 Total liabilities 5,561,979 Net assets acquired: ( 762,089 ) Gain on acquisition, before income taxes $ 47,831 Gain on acquisition, net of income taxes $ 36,996 The Corporation developed a comprehensive integration plan and expensed direct costs as incurred. These direct costs related to the Republic First Transaction totaled $ 0.1 million for the year ending December 31, 2025 and $ 37.6 million for the year ending December 31, 2024. Costs related to the Republic First Transaction are included in acquisition-related expenses in the Consolidated Statements of Income. Unaudited Pro Forma Information: Republic First Bank did not have historical financial information on which 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 was impracticable to provide pro forma information on revenues and earnings for the Republic First Transaction in accordance with ASC 805-10-50-2. Blue Foundry Bancorp On November 24, 2025, the Corporation entered into the Merger Agreement with Blue Foundry. Under the terms of the Merger Agreement, Blue Foundry will merge with and into the Corporation, with the Corporation continuing as the surviving corporation. The combined company will operate under the Corporation's name and will trade under the ticker symbol "FULT." Shareholders of Blue Foundry approved the Merger at the Blue Foundry special shareholder meeting on January 29, 2026 and all regulatory approvals required to complete the merger have been obtained. Subject to the satisfaction of the remaining customary closing conditions in the Merger Agreement, we expect the Merger to close on or about April 1, 2026. Blue Foundry Bank is expected to be merged with and into Fulton Bank in the third quarter of 2026. Under the terms of the Merger Agreement, each share of Blue Foundry common stock will be converted into the right to receive 0.650 of a share of the Corporation's common stock and cash in lieu of fractional shares. 88 The Corporation developed a comprehensive integration plan with respect to the Merger and will expense direct costs as incurred. These direct costs related to the Merger totaled $ 1.1 million for the year ending December 31, 2025. Costs related to the Merger are included in acquisition-related expenses in the Consolidated Statements of Income. NOTE 3 - RESTRICTIONS ON CASH AND CASH EQUIVALENTS Cash collateral is posted by the Corporation with counterparties to secure derivatives and other contracts, which is included in "interest-bearing deposits with other banks" on the Consolidated Balance Sheets. The amounts of such collateral as of December 31, 2025 and 2024 were $ 27.0 million and $ 4.0 million, respectively. 89 NOTE 4 - INVESTMENT SECURITIES The following tables present the amortized cost and estimated fair values of investment securities, as of December 31: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (dollars in thousands) 2025 Available for Sale State and municipal securities $ 951,764 $ 326 $ ( 125,397 ) $ 826,693 Corporate debt securities 219,699 1,302 ( 6,080 ) 214,921 Collateralized mortgage obligations 1,034,548 12,758 ( 7,228 ) 1,040,078 Residential mortgage-backed securities 781,966 5,891 ( 21,140 ) 766,717 Commercial mortgage-backed securities 647,375 80 ( 88,005 ) 559,450 Total $ 3,635,352 $ 20,357 $ ( 247,850 ) $ 3,407,859 Held to Maturity Residential mortgage-backed securities $ 573,636 $ 4,978 $ ( 44,093 ) $ 534,521 Commercial mortgage-backed securities 852,249 — ( 119,192 ) 733,057 Total $ 1,425,885 $ 4,978 $ ( 163,285 ) $ 1,267,578 2024 Available for Sale State and municipal securities $ 960,227 $ 106 $ ( 145,446 ) $ 814,887 Corporate debt securities 313,681 1,123 ( 14,434 ) 300,370 Collateralized mortgage obligations 798,157 4,629 ( 13,901 ) 788,885 Residential mortgage-backed securities 1,029,846 30 ( 40,001 ) 989,875 Commercial mortgage-backed securities 617,605 — ( 100,723 ) 516,882 Total $ 3,719,516 $ 5,888 $ ( 314,505 ) $ 3,410,899 Held to Maturity Residential mortgage-backed securities $ 537,856 $ 2 $ ( 60,162 ) $ 477,696 Commercial mortgage-backed securities 857,713 — ( 151,960 ) 705,753 Total $ 1,395,569 $ 2 $ ( 212,122 ) $ 1,183,449 In May 2024, the Corporation sold $ 345.7 million of AFS investment 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. Investment securities carried at $ 0.4 billion and $ 0.3 billion at December 31, 2025 and 2024, respectively, were pledged as collateral to secure public and trust deposits. 90 The amortized cost and estimated fair values of debt securities as of December 31, 2025, by contractual maturity, are shown in the following table. 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 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value (dollars in thousands) Due in one year or less $ 5,833 $ 5,832 $ — $ — Due from one year to five years 115,046 113,951 — — Due from five years to ten years 221,196 217,061 — — Due after ten years 829,388 704,770 — — 1,171,463 1,041,614 — — Residential mortgage-backed securities (1) 781,966 766,717 573,636 534,521 Commercial mortgage-backed securities (1) 647,375 559,450 852,249 733,057 Collateralized mortgage obligations (1) 1,034,548 1,040,078 — — Total $ 3,635,352 $ 3,407,859 $ 1,425,885 $ 1,267,578 (1) Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments on the underlying loans. The following table presents information related to gross gains and losses on the sales of securities for the years presented: Gross Realized Gains Gross Realized Losses Net Gains (Losses) (dollars in thousands) 2025 $ 663 $ ( 665 ) $ ( 2 ) 2024 179 ( 20,462 ) ( 20,283 ) 2023 283 ( 1,016 ) ( 733 ) 91 The following tables present the gross unrealized losses and estimated fair values of investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31: Less than 12 months 12 Months or Longer Total Number of Securities Estimated Fair Value Unrealized Losses Number of Securities Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses 2025 (dollars in thousands) Available for Sale State and municipal securities 3 $ 10,532 $ ( 127 ) 277 $ 776,597 $ ( 125,270 ) $ 787,129 $ ( 125,397 ) Corporate debt securities 5 22,911 ( 329 ) 21 145,563 ( 5,751 ) 168,474 ( 6,080 ) Collateralized mortgage obligations 1 19,806 ( 128 ) 72 74,446 ( 7,100 ) 94,252 ( 7,228 ) Residential mortgage-backed securities 3 34,766 ( 97 ) 75 240,422 ( 21,043 ) 275,188 ( 21,140 ) Commercial mortgage-backed securities 4 51,600 ( 155 ) 131 493,235 ( 87,850 ) 544,835 ( 88,005 ) Total available for sale 16 $ 139,615 $ ( 836 ) 576 $ 1,730,263 $ ( 247,014 ) $ 1,869,878 $ ( 247,850 ) Held to Maturity Residential mortgage-backed securities — $ — $ — 120 $ 275,497 $ ( 44,093 ) $ 275,497 $ ( 44,093 ) Commercial mortgage-backed securities — — — 60 733,057 ( 119,192 ) 733,057 ( 119,192 ) Total held to maturity — $ — $ — 180 $ 1,008,554 $ ( 163,285 ) $ 1,008,554 $ ( 163,285 ) Less than 12 months 12 Months or Longer Total Number of Securities Estimated Fair Value Unrealized Losses Number of Securities Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses 2024 (dollars in thousands) Available for Sale State and municipal securities 22 $ 53,026 $ ( 1,692 ) 272 $ 755,310 $ ( 143,754 ) $ 808,336 $ ( 145,446 ) Corporate debt securities 1 4,844 ( 13 ) 47 264,099 ( 14,421 ) 268,943 ( 14,434 ) Collateralized mortgage obligations 12 288,871 ( 3,463 ) 77 85,485 ( 10,438 ) 374,356 ( 13,901 ) Residential mortgage-backed securities 42 777,695 ( 9,178 ) 69 174,284 ( 30,823 ) 951,979 ( 40,001 ) Commercial mortgage-backed securities 1 19,291 ( 875 ) 135 497,591 ( 99,848 ) 516,882 ( 100,723 ) Total available for sale 78 $ 1,143,727 $ ( 15,221 ) 600 $ 1,776,769 $ ( 299,284 ) $ 2,920,496 $ ( 314,505 ) Held to maturity Residential mortgage-backed securities 7 $ 155,726 $ ( 1,754 ) 120 $ 303,220 $ ( 58,408 ) $ 458,946 $ ( 60,162 ) Commercial mortgage-backed securities — — — 60 705,753 ( 151,960 ) 705,753 ( 151,960 ) Total held to maturity 7 $ 155,726 $ ( 1,754 ) 180 $ 1,008,973 $ ( 210,368 ) $ 1,164,699 $ ( 212,122 ) 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. The change in fair value of these securities is attributable to changes in interest rates and not credit quality. In addition, these securities have principal payments that are guaranteed by GSEs. Therefore, the Corporation does not have an ACL for these securities as of December 31, 2025 and 2024, respectively. 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. Based on the payment status and management's evaluation of the Corporation's state and municipal securities, no ACL was required for these securities as of December 31, 2025 and 2024, 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, 2025 and December 31, 2024. 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, 2025 and December 31, 2024. 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. 92 NOTE 5 - LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans and leases, net of unearned income Loans and leases, net of unearned income are summarized as follows as of December 31: 2025 2024 (dollars in thousands) Real estate - commercial mortgage $ 9,820,944 $ 9,601,858 Commercial and industrial 4,539,060 4,605,589 Real estate - residential mortgage 6,669,993 6,349,643 Real estate - home equity 1,242,831 1,160,616 Real estate - construction 970,298 1,394,899 Consumer 564,349 616,856 Leases and other loans (1) 337,409 315,458 Net loans $ 24,144,884 $ 24,044,919 (1) Includes unearned income of $ 36.8 million and $ 35.6 million as of December 31, 2025 and December 31, 2024, respectively. The Corporation has extended credit to officers and directors of the Corporation and to their associates. These related-party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collection or present other unfavorable features. The aggregate dollar amount of these loans, including unadvanced commitments, was $ 169.9 million and $ 166.2 million as of December 31, 2025 and 2024, respectively. During 2025, additions totaled $ 29.9 million and repayments totaled $ 26.2 million for related-party loans. Allowance for Credit Losses The following table summarizes the ACL - loans balance and the reserve for OBS credit exposures balance as of December 31: 2025 2024 (dollars in thousands) ACL - loans $ 364,462 $ 379,156 Reserve for OBS credit exposures (1) $ 14,972 $ 14,161 (1) Included in other liabilities on the Consolidated Balance Sheets. The following table presents the activity in the ACL for the years ended December 31: 2025 2024 2023 (dollars in thousands) Balance at beginning of period $ 379,156 $ 293,404 $ 269,366 CECL Day 1 Provision (1) — 23,444 — Initial PCD allowance for credit losses — 54,631 — Loans charged off ( 78,198 ) ( 54,429 ) ( 39,201 ) Recoveries of loans previously charged off 28,617 9,984 10,129 Net loans (charged off) recovered ( 49,581 ) ( 44,445 ) ( 29,072 ) Provision for credit losses (1) (2) 34,887 52,122 53,110 Balance at end of period $ 364,462 $ 379,156 $ 293,404 Provision for OBS credit exposures (1) $ 811 $ ( 3,930 ) $ 926 Reserve for OBS credit exposures $ 14,972 $ ( 14,161 ) $ 17,254 (1) The sum of these amounts is reflected in the provision for credit losses in the Consolidated Statements of Income. (2) Provision only includes the portion related to net loans. 93 The following table presents the activity in the ACL by portfolio segment: Real Estate - Commercial Mortgage Commercial and Industrial Real Estate - Residential Mortgage Consumer and Real Estate - Home Equity Real Estate - Construction Leases and other loans Total (dollars in thousands) 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 ) Recoveries of loans previously charged off 603 4,440 472 3,357 382 730 9,984 Net loans (charged off) recovered ( 12,583 ) ( 22,145 ) ( 1,000 ) ( 5,133 ) 382 ( 3,966 ) ( 44,445 ) Provision for loan losses (1)(2) 9,992 28,507 ( 6,440 ) 6,124 10,466 3,473 52,122 Balance at December 31, 2024 158,181 92,212 81,331 19,397 25,140 2,895 379,156 Loans charged off ( 36,518 ) ( 20,787 ) ( 1,053 ) ( 8,817 ) ( 5,386 ) ( 5,637 ) ( 78,198 ) Recoveries of loans previously charged off 5,447 18,377 640 3,146 227 780 28,617 Net loans (charged off) recovered ( 31,071 ) ( 2,410 ) ( 413 ) ( 5,671 ) ( 5,159 ) ( 4,857 ) ( 49,581 ) Provision for loan losses (1)(2) 30,192 ( 12,062 ) 8,043 9,300 ( 9,085 ) 8,499 34,887 Balance at December 31, 2025 $ 157,302 $ 77,740 $ 88,961 $ 23,026 $ 10,896 $ 6,537 $ 364,462 (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. The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative models. 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. 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 costs 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, 2025 and 2024, 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. As of December 31, 2025 and 2024, approximately 88 % and 90 %, 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, or actual fair value based on active, fully-executed letters of intent to purchase or agreements of sale. 94 Non-accrual Loans The following table presents total non-accrual loans, by class segment, as of December 31: 2025 2024 With a Related Allowance Without a Related Allowance Total With a Related Allowance Without a Related Allowance Total (dollars in thousands) Real estate - commercial mortgage $ 27,437 $ 44,613 $ 72,050 $ 31,654 $ 67,843 $ 99,497 Commercial and industrial 19,822 24,281 44,103 17,011 25,206 42,217 Real estate - residential mortgage 25,423 2,328 27,751 23,387 2,013 25,400 Real estate - home equity 7,126 — 7,126 8,513 78 8,591 Real estate - construction 1,661 — 1,661 1,746 — 1,746 Consumer 3 — 3 8 — 8 Leases and other loans 32 1,146 1,178 1,801 10,033 11,834 Total $ 81,504 $ 72,368 $ 153,872 $ 84,120 $ 105,173 $ 189,293 As of December 31, 2025 and December 31, 2024, there were $ 72.4 million and $ 105.2 million, respectively, of non-accrual loans that did not have a specific valuation allowance within the ACL. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary. The amount of interest income on non-accrual loans that was recognized was approximately $ 2.8 million and $ 1.0 million in 2025 and 2024, respectively. Asset Quality Maintaining an appropriate ACL is dependent on various factors, including the ability to identify potential problem loans in a timely manner. For commercial construction loans, commercial and industrial loans, leases and other 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 PD on this migration. Assigning risk ratings involves judgment. The Corporation's loan review officers provide a separate assessment of risk rating accuracy. Risk ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff, or if specific loan review assessments identify a deterioration or an improvement in a loan. 95 The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the current period: December 31, 2025 (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans Revolving Loans converted to Term Loans Amortized Amortized 2025 2024 2023 2022 2021 Prior Cost Basis Cost Basis Total Real estate - commercial mortgage Pass $ 885,851 $ 769,334 $ 1,120,033 $ 1,127,104 $ 1,185,319 $ 3,712,279 $ 76,848 $ — $ 8,876,768 Special Mention 9,425 19,207 42,649 52,546 116,763 171,308 787 — 412,685 Substandard or Lower 2,346 15,154 90,747 111,135 108,871 202,185 1,053 — 531,491 Total real estate - commercial mortgage 897,622 803,695 1,253,429 1,290,785 1,410,953 4,085,772 78,688 — 9,820,944 Real estate - commercial mortgage Current period gross charge-offs — — ( 1,315 ) ( 20,232 ) ( 7,990 ) ( 6,981 ) — — ( 36,518 ) Commercial and industrial Pass 559,804 340,662 351,330 449,474 205,593 766,308 1,398,989 3,092 4,075,252 Special Mention 11,490 12,287 18,377 12,305 4,354 52,719 101,311 7,179 220,022 Substandard or Lower 1,843 10,114 21,089 19,238 8,898 73,671 104,498 4,435 243,786 Total commercial and industrial 573,137 363,063 390,796 481,017 218,845 892,698 1,604,798 14,706 4,539,060 Commercial and industrial Current period gross charge-offs ( 75 ) ( 3,317 ) ( 4,822 ) ( 4,936 ) ( 2,410 ) ( 4,449 ) ( 778 ) — ( 20,787 ) Real estate - construction (1) Pass 100,320 236,045 190,065 40,427 24,082 46,156 50,902 — 687,997 Special Mention 555 1,196 — 21,286 3,381 2,750 1,248 — 30,416 Substandard or Lower — — 916 7,718 256 243 9 — 9,142 Total real estate - construction 100,875 237,241 190,981 69,431 27,719 49,149 52,159 — 727,555 Real estate - construction (1) Current period gross charge-offs — — — ( 5,286 ) — ( 100 ) — — ( 5,386 ) Leases and other loans Pass 174,718 35,955 70,152 29,832 8,185 8,665 — — 327,507 Special Mention 432 459 430 1,305 460 329 — — 3,415 Substandard or Lower 185 2,080 955 3,034 196 37 — — 6,487 Total leases and other loans 175,335 38,494 71,537 34,171 8,841 9,031 — — 337,409 Leases and other loans Current period gross charge-offs ( 2,092 ) ( 1,153 ) ( 506 ) ( 289 ) ( 244 ) ( 1,353 ) — — ( 5,637 ) Total Pass $ 1,720,693 $ 1,381,996 $ 1,731,580 $ 1,646,837 $ 1,423,179 $ 4,533,408 $ 1,526,739 $ 3,092 $ 13,967,524 Special Mention 21,902 33,149 61,456 87,442 124,958 227,106 103,346 7,179 666,538 Substandard or Lower 4,374 27,348 113,707 141,125 118,221 276,136 105,560 4,435 790,906 Total $ 1,746,969 $ 1,442,493 $ 1,906,743 $ 1,875,404 $ 1,666,358 $ 5,036,650 $ 1,735,645 $ 14,706 $ 15,424,968 (1) Excludes non-commercial real estate - construction. Total criticized and classified loans decreased $ 378.9 million, or 20.6 %, compared to December 31, 2024. 96 The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the prior period: December 31, 2024 (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans Revolving Loans converted to Term Loans Amortized Amortized 2024 2023 2022 2021 2020 Prior Cost Basis Cost Basis Total Real estate - commercial mortgage Pass $ 623,742 $ 898,296 $ 1,138,669 $ 1,316,000 $ 1,077,625 $ 3,414,138 $ 69,942 $ 9,646 $ 8,548,058 Special Mention 4,441 73,348 149,280 157,543 28,734 107,099 10,978 — 531,423 Substandard or Lower 4,831 44,665 102,952 95,617 75,097 193,922 1,380 3,913 522,377 Total real estate - commercial mortgage 633,014 1,016,309 1,390,901 1,569,160 1,181,456 3,715,159 82,300 13,559 9,601,858 Real estate - commercial mortgage Current period gross charge-offs — ( 126 ) ( 84 ) — — ( 12,950 ) — ( 26 ) ( 13,186 ) Commercial and industrial Pass 435,917 486,720 512,622 261,603 268,194 684,931 1,375,201 6,346 4,031,534 Special Mention 9,928 8,333 19,931 18,888 4,844 58,632 117,940 313 238,809 Substandard or Lower 10,795 16,593 34,748 10,183 12,496 49,439 176,755 24,237 335,246 Total commercial and industrial 456,640 511,646 567,301 290,674 285,534 793,002 1,669,896 30,896 4,605,589 Commercial and industrial Current period gross charge-offs ( 612 ) ( 3,709 ) ( 2,560 ) ( 4,587 ) ( 317 ) ( 7,612 ) ( 3,553 ) ( 3,635 ) ( 26,585 ) Real estate - construction (1) Pass 197,206 494,072 157,296 37,438 8,784 41,480 30,608 619 967,503 Special Mention — 10,612 80,651 69,109 938 — — — 161,310 Substandard or Lower — — 14,407 10,399 — 20,350 121 1,906 47,183 Total real estate - construction 197,206 504,684 252,354 116,946 9,722 61,830 30,729 2,525 1,175,996 Real estate - construction (1) Current period gross charge-offs — — — — — — — — — Total Pass $ 1,256,865 $ 1,879,088 $ 1,808,587 $ 1,615,041 $ 1,354,603 $ 4,140,549 $ 1,475,751 $ 16,611 $ 13,547,095 Special Mention 14,369 92,293 249,862 245,540 34,516 165,731 128,918 313 931,542 Substandard or Lower 15,626 61,258 152,107 116,199 87,593 263,711 178,256 30,056 904,806 Total $ 1,286,860 $ 2,032,639 $ 2,210,556 $ 1,976,780 $ 1,476,712 $ 4,569,991 $ 1,782,925 $ 46,980 $ 15,383,443 (1) Excludes non-commercial real estate - construction. For a description of the Corporation's internal risk rating categories, see "Note 1 - Summary of Significant Accounting Policies" under the heading "Allowance for Credit Losses." 97 The Corporation considers the performance of the loan portfolio and its impact on the ACL. The Corporation does not assign internal risk ratings to smaller balance, homogeneous loans, such as home equity loans, residential mortgage loans, construction loans to individuals secured by residential real estate and consumer loans. For these loans, the most relevant credit quality indicator is delinquency status, and the Corporation evaluates credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, for the periods shown: December 31, 2025 (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans Revolving Loans converted to Term Loans Amortized Amortized 2025 2024 2023 2022 2021 Prior Cost Basis Cost Basis Total Real estate - residential mortgage Performing $ 724,505 $ 536,668 $ 662,479 $ 1,412,885 $ 1,603,854 $ 1,684,033 $ — $ — $ 6,624,424 Non-performing 134 645 2,102 9,752 4,961 27,975 — — 45,569 Total real estate - residential mortgage 724,639 537,313 664,581 1,422,637 1,608,815 1,712,008 — — 6,669,993 Real estate - residential mortgage Current period gross charge-offs — ( 19 ) ( 201 ) ( 294 ) ( 161 ) ( 378 ) — — ( 1,053 ) Consumer and real estate - home equity Performing 231,952 23,963 74,129 140,759 43,561 201,571 1,042,448 36,924 1,795,307 Non-performing 97 84 143 409 568 4,992 2,497 3,083 11,873 Total consumer and real estate - home equity 232,049 24,047 74,272 141,168 44,129 206,563 1,044,945 40,007 1,807,180 Consumer and real estate - home equity Current period gross charge-offs ( 215 ) ( 262 ) ( 998 ) ( 1,556 ) ( 708 ) ( 4,505 ) ( 573 ) — ( 8,817 ) Construction - residential Performing 164,473 72,583 1,395 2,280 — — — — 240,731 Non-performing — 606 — 1,406 — — — — 2,012 Total construction - residential 164,473 73,189 1,395 3,686 — — — — 242,743 Construction - residential Current period gross charge-offs — — — — — — — — — Total Performing $ 1,120,930 $ 633,214 $ 738,003 $ 1,555,924 $ 1,647,415 $ 1,885,604 $ 1,042,448 $ 36,924 $ 8,660,462 Non-performing 231 1,335 2,245 11,567 5,529 32,967 2,497 3,083 59,454 Total $ 1,121,161 $ 634,549 $ 740,248 $ 1,567,491 $ 1,652,944 $ 1,918,571 $ 1,044,945 $ 40,007 $ 8,719,916 98 December 31, 2024 (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans Revolving Loans converted to Term Loans Amortized Amortized 2024 2023 2022 2021 2020 Prior Cost Basis Cost Basis Total Real estate - residential mortgage Performing $ 470,918 $ 728,630 $ 1,515,521 $ 1,726,991 $ 1,022,116 $ 839,566 $ — $ — $ 6,303,742 Non-performing 87 1,358 5,118 3,232 5,523 30,583 — — 45,901 Total real estate - residential mortgage 471,005 729,988 1,520,639 1,730,223 1,027,639 870,149 — — 6,349,643 Real estate - residential mortgage Current period gross charge-offs — ( 172 ) ( 106 ) ( 12 ) ( 43 ) ( 888 ) — ( 251 ) ( 1,472 ) Consumer and real estate - home equity Performing 178,722 116,370 211,647 65,412 48,201 188,442 913,920 40,384 1,763,098 Non-performing 236 848 918 963 753 4,571 2,893 3,192 14,374 Total consumer and real estate - home equity 178,958 117,218 212,565 66,375 48,954 193,013 916,813 43,576 1,777,472 Consumer and real estate - home equity loans Current period gross charge-offs ( 118 ) ( 1,016 ) ( 1,552 ) ( 790 ) ( 398 ) ( 2,704 ) ( 75 ) ( 1,837 ) ( 8,490 ) Leases and other loans Performing 123,991 89,006 52,724 16,894 10,830 9,996 — — 303,441 Non-performing — — 1,922 744 23 9,328 — — 12,017 Total leases and other 123,991 89,006 54,646 17,638 10,853 19,324 — — 315,458 Leases and other loans Current period gross charge-offs ( 1,977 ) ( 913 ) ( 335 ) ( 334 ) ( 192 ) ( 770 ) — ( 175 ) ( 4,696 ) Construction - residential Performing 138,440 61,848 15,710 1,499 — — — — 217,497 Non-performing — — 1,406 — — — — — 1,406 Total construction - residential 138,440 61,848 17,116 1,499 — — — — 218,903 Construction - residential Current period gross charge-offs — — — — — — — — — Total Performing $ 912,071 $ 995,854 $ 1,795,602 $ 1,810,796 $ 1,081,147 $ 1,038,004 $ 913,920 $ 40,384 $ 8,587,778 Non-performing 323 2,206 9,364 4,939 6,299 44,482 2,893 3,192 73,698 Total $ 912,394 $ 998,060 $ 1,804,966 $ 1,815,735 $ 1,087,446 $ 1,082,486 $ 916,813 $ 43,576 $ 8,661,476 99 The following table presents non-performing assets: December 31, 2025 December 31, 2024 (dollars in thousands) Non-accrual loans $ 153,872 $ 189,293 Loans 90 days or more past due and still accruing 29,924 30,781 Total non-performing loans 183,796 220,074 OREO (1) 1,365 2,621 Total non-performing assets $ 185,161 $ 222,695 (1) Excludes $ 19.1 million and $ 17.5 million of residential mortgage properties for which formal foreclosure proceeding were in process as of December 31, 2025 and 2024, respectively. The following tables present the aging of the amortized cost basis of loans, by class segment: 30-59 Days Past Due 60-89 Days Past Due ≥ 90 Days Past Due and Accruing Non- accrual Current Total (dollars in thousands) December 31, 2025 Real estate - commercial mortgage $ 19,762 $ 17,757 $ 2,931 $ 72,050 $ 9,708,444 $ 9,820,944 Commercial and industrial 5,023 4,563 3,653 44,103 4,481,718 4,539,060 Real estate - residential mortgage 48,246 7,912 17,818 27,751 6,568,266 6,669,993 Real estate - home equity 15,646 1,417 3,958 7,126 1,214,684 1,242,831 Real estate - construction 3,698 2,555 606 1,661 961,778 970,298 Consumer 6,334 1,604 788 3 555,620 564,349 Leases and other loans (1) 160 193 170 1,178 335,708 337,409 Total $ 98,869 $ 36,001 $ 29,924 $ 153,872 $ 23,826,218 $ 24,144,884 (1) Includes unearned income. 30-59 Days Past Due 60-89 Days Past Due ≥ 90 Days Past Due and Accruing Non- accrual Current Total (dollars in thousands) December 31, 2024 Real estate - commercial mortgage $ 32,715 $ 16,684 $ 2,862 $ 99,497 $ 9,450,100 $ 9,601,858 Commercial and industrial 6,031 3,636 1,460 42,217 4,552,245 4,605,589 Real estate - residential mortgage 59,593 5,946 20,501 25,400 6,238,203 6,349,643 Real estate - home equity 6,778 1,057 4,758 8,591 1,139,432 1,160,616 Real estate - construction 3,549 5,163 — 1,746 1,384,441 1,394,899 Consumer 6,779 1,627 1,017 8 607,425 616,856 Leases and other loans (1) 269 105 183 11,834 303,067 315,458 Total $ 115,714 $ 34,218 $ 30,781 $ 189,293 $ 23,674,913 $ 24,044,919 (1 ) Includes unearned income. Loan Modifications to Borrowers Experiencing Financial Difficulty 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 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. 100 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 2025 2024 2023 Amortized Cost Basis % of Class of Financing Receivable Amortized Cost Basis % of Class of Financing Receivable Amortized Cost Basis % of Class of Financing Receivable (dollars in thousands) Real estate - commercial mortgage $ 81,548 0.83 % $ 20,501 0.21 % $ 2,944 0.04 % Commercial and industrial 30,493 0.67 3,913 0.08 11,970 0.26 Real estate - residential mortgage 5,814 0.09 11,604 0.18 8,182 0.15 Real estate - home equity 372 0.03 379 0.03 — — Real estate - construction 30,454 3.14 595 0.04 — — Total $ 148,681 $ 36,992 $ 23,096 Interest Rate Reduction and Term Extension 2025 2024 2023 Amortized Cost Basis % of Class of Financing Receivable Amortization Cost Basis % of Class of Financing Receivable Amortization Cost Basis % of Class of Financing Receivable (dollars in thousands) Real estate - residential mortgage $ 3,014 0.05 % $ 2,365 0.04 % $ 910 0.02 % Total $ 3,014 $ 2,365 $ 910 101 The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty: Term Extension Financial Effect 2025 Real estate - commercial mortgage Added a weighted-average 0.96 years to the life of loans, which reduced monthly payment amounts for the borrowers. Commercial and industrial Added a weighted-average 1.01 years to the life of loans, which reduced monthly payment amounts for the borrowers. Real estate - residential mortgage Added a weighted-average 9.52 years to the life of loans, which reduced monthly payment amounts for the borrowers. Real estate - home equity Added a weighted-average 15.29 years to the life of loans, which reduced monthly payment amounts for the borrowers. Real estate - construction Added a weighted-average 1.24 years to the life of loans, which reduced monthly payment amounts for the borrowers. 2024 Real estate - commercial mortgage Added a weighted-average 1.99 years to the life of loans, which reduced monthly payment amounts for the borrowers. Commercial and industrial Added a weighted-average 0.67 years to the life of loans, which reduced monthly payment amounts for the borrowers. 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. 2023 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 Financial Effect 2025 Real estate - residential mortgage Reduced weighted-average interest rate from 3.37 % to 1.41 % 2024 Real estate - residential mortgage Reduced weighted-average interest rate from 2.35 % to 1.40 % 2023 Real estate - residential mortgage Reduced weighted-average interest rate from 3.76 % to 2.30 % During the years ended December 31, 2025, 2024 and 2023, there were no loans modified due to financial difficulty where there was a principal balance forgiveness. 102 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 Days Past Past Due Non- Past Current Due and Accruing Accrual Due (dollars in thousands) Real estate - commercial mortgage $ 81,174 $ — $ — $ 375 $ 375 Commercial and industrial 27,667 — — 2,826 2,826 Real estate - residential mortgage 5,153 933 123 2,618 3,674 Real estate - home equity 197 — — 175 175 Real estate - construction 30,199 — — 255 255 Total $ 144,390 $ 933 $ 123 $ 6,249 $ 7,305 There were no commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as of December 31, 2025. NOTE 6 - PREMISES AND EQUIPMENT The following is a summary of premises and equipment as of December 31: 2025 2024 (dollars in thousands) Land $ 28,426 $ 36,080 Buildings and improvements 295,165 310,786 Furniture and equipment 178,401 173,778 Construction in progress 6,648 4,872 Total premises and equipment 508,640 525,516 Less: Accumulated depreciation and amortization ( 333,400 ) ( 329,989 ) Net premises and equipment $ 175,240 $ 195,527 The $ 23.3 million decrease in land and buildings and improvements at December 31, 2025 compared to December 31, 2024 was primarily due to financial center closures. NOTE 7 - GOODWILL AND INTANGIBLE ASSETS Goodwill totaled $ 553.3 million as of December 31, 2025 and 2024, respectively. There were no goodwill impairment charges in 2025 based on the Corporation's 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. 103 The following table summarizes intangible assets, which are included in goodwill and net intangible assets on the Consolidated Balance Sheets: December 31, 2025 2024 (dollars in thousands) Amortizing intangible assets $ 106,196 $ 106,196 Accumulated amortization ( 46,546 ) ( 24,085 ) Net intangibles $ 59,650 $ 82,111 Net intangibles included CDI of $ 58.2 million and $ 80.2 million as of December 31, 2025 and 2024, respectively. The CDI was recorded as part of the Republic First Transaction and the Prudential Bancorp 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): Year 2026 $ 18,667 2027 15,066 2028 11,213 2029 7,717 2030 4,409 Thereafter 1,102 Total $ 58,174 NOTE 8 - MORTGAGE SERVICING RIGHTS The following table summarizes the changes in MSRs, which are included in other assets on the Consolidated Balance Sheets, with adjustments to the carrying value included in mortgage banking income on the Consolidated Statements of Income: 2025 2024 2023 (dollars in thousands) Amortized cost: Balance at beginning of period $ 30,691 $ 31,602 $ 34,217 Originations of MSRs 3,596 3,758 2,475 Amortization ( 4,553 ) ( 4,669 ) ( 5,090 ) Balance at end of period $ 29,734 $ 30,691 $ 31,602 Estimated fair value of MSRs at end of period $ 49,861 $ 53,972 $ 49,696 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 $ 4.0 billion and $ 4.1 billion as of December 31, 2025 and 2024, respectively. Actual and expected prepayments of the underlying mortgage loans can impact the fair value of MSRs. The Corporation accounts for MSRs at the lower of amortized cost or fair value. The fair value of MSRs is estimated by discounting the estimated cash flows from servicing income, net of expense, over the expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections. The fair values of MSRs were $ 49.9 million, $ 54.0 million and $ 49.7 million as of December 31, 2025, 2024 and 2023, respectively. Based on its fair value analysis as of December 31, 2025, 2024 and 2023, the Corporation determined that no valuation allowances were required. 104 Total servicing income, included in mortgage banking income in the Consolidated Statements of Income, was $ 10.1 million, $ 10.2 million and $ 10.2 million as of December 31, 2025, 2024 and 2023, respectively. Total MSRs amortization expense, recognized as a reduction to mortgage banking income in the Consolidated Statements of Income, was $ 4.6 million, $ 4.7 million and $ 5.1 million in 2025, 2024 and 2023, respectively. Estimated future MSRs amortization expense, based on balances as of December 31, 2025, and the estimated remaining lives of the underlying loans, is as follows (dollars in thousands): Year 2026 $ 3,837 2027 3,371 2028 2,968 2029 2,626 2030 2,339 Thereafter 14,593 Total estimated amortization expense $ 29,734 NOTE 9 - DEPOSITS Deposits consisted of the following as of December 31: 2025 2024 (dollars in thousands) Noninterest-bearing demand $ 5,256,096 $ 5,499,760 Interest-bearing demand 7,970,188 7,843,604 Savings and money market accounts 8,512,829 7,792,114 Total demand and savings 21,739,113 21,135,478 Brokered deposits 855,042 843,857 Time deposits 3,995,252 4,150,098 Total Deposits $ 26,589,407 $ 26,129,433 The scheduled maturities of time deposits as of December 31, 2025 were as follows (dollars in thousands): Year 2026 $ 3,528,876 2027 291,166 2028 114,925 2029 12,464 2030 8,151 Thereafter 39,670 Total $ 3,995,252 Included in time deposits were certificates of deposit equal to or greater than $100,000 of $ 2.4 billion and $ 2.5 billion as of December 31, 2025 and 2024, respectively. Time deposits equal or greater than $250,000 were $ 1.1 billion and $ 1.0 billion as of December 31, 2025 and 2024, respectively. 105 NOTE 10 - BORROWINGS Borrowings as of December 31, 2025 and 2024 and the related maximum amounts outstanding at the end of any month in each of the two years then ended are presented below. December 31 Maximum Outstanding 2025 2024 2025 2024 (dollars in thousands) Federal funds purchased $ — $ — $ — $ 125,000 FHLB advances 250,000 850,000 800,000 1,706,621 Other borrowings: Short-term promissory notes issued to customers and customer repurchase agreements 678,822 563,831 686,669 625,829 Other borrowings 916 901 1,282 1,155 Total other borrowings $ 679,738 $ 564,732 As of December 31, 2025, 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 $ 3.9 billion of collateralized borrowing availability at the FRB discount window with no amount outstanding as of December 31, 2025. As of December 31, 2025, the Corporation had total FHLB borrowing capacity of $ 11.6 billion, consisting of $ 250.0 million in outstanding advances and $ 4.2 billion in letters of credit issued to collateralize municipal deposits, resulting in a remaining borrowing capacity of approximately $ 7.1 billion. Advances from the FHLB, when utilized, are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets. The following is included in senior and subordinated debt as of December 31: 2025 2024 (dollars in thousands) Subordinated debt $ 370,000 $ 370,000 Unamortized discounts and issuance costs ( 2,363 ) ( 2,684 ) Total senior debt and subordinated debt $ 367,637 $ 367,316 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, 2025 (dollars in thousands): Year 2026 $ — 2027 — 2028 — 2029 — 2030 195,000 Thereafter 175,000 Unamortized discounts and issuance costs ( 2,363 ) Total $ 367,637 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. 106 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. 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. The subordinated notes due in 2030 converted to a floating rate based on the three-month term SOFR, plus 230 bps on March 15, 2025. NOTE 11 - DERIVATIVE FINANCIAL INSTRUMENTS The following table presents a summary of notional amounts and fair values of derivative financial instruments as of December 31: 2025 2024 Notional Amount Asset (Liability) Fair Value Notional Amount Asset (Liability) Fair Value (dollars in thousands) Interest Rate Locks with Customers Positive fair values $ 203,580 $ 563 $ 171,933 $ 389 Negative fair values 926 ( 6 ) 3,888 ( 58 ) Forward Commitments Positive fair values — — 51,250 363 Negative fair values 71,207 ( 156 ) — — Interest Rate Derivatives with Customers (1) Positive fair values 2,118,722 39,236 767,905 8,480 Negative fair values 2,747,758 ( 130,521 ) 3,976,294 ( 239,058 ) Interest Rate Derivatives with Dealer Counterparties Positive fair values 2,747,758 77,528 3,976,294 150,480 Negative fair values 2,118,722 ( 39,606 ) 767,905 ( 10,734 ) Interest Rate Derivatives used in Cash Flow Hedges Positive fair values 2,950,000 11,489 2,500,000 227 Negative fair values — — 1,400,000 ( 2,971 ) Foreign Exchange Contracts with Customers Positive fair values 1,239 8 28,327 1,619 Negative fair values 13,007 ( 714 ) 693 ( 27 ) Foreign Exchange Contracts with Correspondent Banks Positive fair values 14,424 883 4,059 63 Negative fair values 1,870 ( 6 ) 32,406 ( 1,569 ) (1) Fair values are net of a valuation allowance of $ 366.3 thousand as of December 31, 2025 and 2024. 107 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 (dollars in thousands) Year ended December 31, 2025 Interest Rate Products $ 348 $ 348 $ — Interest Income $ ( 19,504 ) $ ( 19,504 ) $ — Interest Rate Products 514 514 — Interest Expense ( 900 ) ( 900 ) — Total $ 862 $ 862 $ — $ ( 20,404 ) $ ( 20,404 ) $ — Year ended December 31, 2024 Interest Rate Products $ ( 10,261 ) $ ( 10,261 ) $ — Interest Income $ ( 29,899 ) $ ( 29,899 ) $ — Interest Rate Products 11,025 11,025 — Interest Expense 6,446 6,446 — Total $ 764 $ 764 $ — $ ( 23,453 ) $ ( 23,453 ) $ — The following table presents the effect of fair value and cash flow hedge accounting on the income statement for the year ended December 31: Consolidated Statements of Income Classification 2025 2024 Interest Income Interest Expense Interest Income Interest Expense (dollars in thousands) Total amounts of income line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded $ ( 19,504 ) $ ( 900 ) $ ( 29,899 ) $ 6,446 The effects of fair value and cash flow hedging: Amount of gain or (loss) on cash flow hedging relationships — — — — Interest rate derivatives: Amount of (loss) gain reclassified from AOCI into income ( 19,504 ) ( 900 ) ( 29,899 ) 6,446 Amount of (loss) gain reclassified from AOCI into income as a result of a forecasted transaction that is no longer probable of occurring — — — — Amount of (loss) gain reclassified from AOCI into income - included component ( 19,504 ) ( 900 ) ( 29,899 ) 6,446 Amount of (loss) gain reclassified from AOCI into income - excluded component — — — — During the next twelve months, the Corporation estimates that an additional $ 1.8 million will be reclassified as a decrease to interest income. 108 The following table presents the fair value gains (losses) on derivative financial instruments for the years ended December 31: Consolidated Statements of Income Classification 2025 2024 2023 (dollars in thousands) Mortgage banking derivatives (1) Mortgage banking $ ( 292 ) $ 1,090 $ ( 380 ) Interest rate derivatives Other income 258 419 ( 1,855 ) Foreign exchange contracts Other income 84 ( 9 ) 7 Net fair value gains (losses) on derivative financial instruments $ 50 $ 1,500 $ ( 2,228 ) (1) Includes interest rate locks with customers and forward commitments. Fair Value Option The Corporation has elected to measure mortgage loans held for sale at fair value. The following table presents a summary of mortgage loans held for sale and the impact of the fair value election on the Consolidated Financial Statements as of December 31: 2025 2024 (dollars in thousands) Amortized Cost (1) $ 16,005 $ 25,316 Fair value 16,316 25,618 (1) Cost basis of mortgage loans held for sale represents the unpaid principal balance. Losses related to changes in fair values of mortgage loans held for sale were nominal for the year ended December 31, 2025. Losses related to changes in fair values of mortgage loans held for sale were $ 0.1 million for the year ended December 31, 2024, and gains related to changes in fair values of mortgage loans held for sale were $ 0.3 million for the year ended December 31, 2023. The gains and losses are recorded on the Consolidated Income Statements as an adjustment to mortgage banking income. 109 Balance Sheet Offsetting The fair values of interest rate derivative agreements and foreign exchange contracts the Corporation enters into with customers and dealer counterparties may be eligible for offset on the Consolidated Balance Sheets if they are subject to master netting arrangements or similar agreements. The Corporation has elected to net its financial assets and liabilities designated as interest rate derivatives when offsetting is permitted. The following table presents the Corporation's financial instruments that are eligible for offset, and the effects of offsetting, on the Consolidated Balance Sheets as of December 31: Gross Amounts Gross Amounts Not Offset Recognized on the Consolidated on the Balance Sheets Consolidated Financial Cash Net Balance Sheets Instruments (1) Collateral (2) Amount (dollars in thousands) 2025 Interest rate derivative assets $ 128,253 $ ( 18,829 ) $ — $ 109,424 Foreign exchange derivative assets with correspondent banks 883 ( 883 ) — — Total $ 129,136 $ ( 19,712 ) $ — $ 109,424 Interest rate derivative liabilities $ 170,127 $ ( 30,318 ) $ ( 54,200 ) $ 85,609 Foreign exchange derivative liabilities with correspondent banks 6 ( 883 ) — ( 877 ) Total $ 170,133 $ ( 31,201 ) $ ( 54,200 ) $ 84,732 2024 Interest rate derivative assets $ 159,187 $ ( 12,739 ) $ — $ 146,448 Foreign exchange derivative assets with correspondent banks 63 ( 63 ) — — Total $ 159,250 $ ( 12,802 ) $ — $ 146,448 Interest rate derivative liabilities $ 252,763 $ ( 9,995 ) $ ( 94,339 ) $ 148,429 Foreign exchange derivative liabilities with correspondent banks 1,569 ( 63 ) — 1,506 Total $ 254,332 $ ( 10,058 ) $ ( 94,339 ) $ 149,935 (1) For interest rate derivative assets, amounts represent any derivative liability fair values that could be offset in the event of counterparty or customer default. 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 received from the counterparty or posted by the Corporation on interest rate derivative transactions and foreign exchange contracts with financial institution counterparties. Interest rate derivatives with customers are collateralized by the same collateral securing the underlying loans to those borrowers. Cash and securities collateral amounts are included in the table only to the extent of the net derivative fair values. Cash Flow Hedge Terminations 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, including fees, when the previously forecasted hedged item affects earnings in future periods. During the years ended December 31, 2025, 2024 and 2023, $ 13.0 million, $ 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. 110 NOTE 12 - REGULATORY MATTERS Regulatory Capital Requirements The Corporation and the Bank are subject to regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Corporation's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Basel III Rules The Basel III Rules provide a comprehensive framework and require the Corporation and the Bank to: • Meet a minimum CET1 capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 capital of 6.00% of risk-weighted assets; • Meet a minimum Total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00% of average assets; • Maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonus payments; and • Comply with a revised definition of capital to improve the ability of regulatory capital instruments to absorb losses. Certain non-qualifying capital instruments, including cumulative preferred stock and TruPS, are excluded as a component of Tier 1 capital for institutions of the Corporation's size. The Corporation and the Bank are required to maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements. The rules provide that the failure to maintain the "capital conservation buffer" results in restrictions on capital distributions and discretionary cash bonus payments to executive officers. As a result, under the Basel III Rules, if the Bank fails to maintain the required minimum capital conservation buffer, the Corporation will be subject to limits, and possibly prohibitions, on its ability to obtain capital distributions from such subsidiaries. If the Corporation does not receive sufficient cash dividends from the Bank, it may not have sufficient funds to pay dividends on its common stock, service its debt obligations or repurchase its common stock. As of December 31, 2025 and 2024, the Corporation's capital levels met the minimum capital requirements, including the capital conservation buffers, as prescribed in the Basel III Rules. As of December 31, 2025 and 2024, the Bank was well capitalized under the regulatory framework for prompt corrective action based on its capital ratio calculation. To be categorized as well capitalized, the Bank was required to maintain minimum total risk-based, Tier I risk-based, CET1 risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since December 31, 2025, that management believes have changed the Corporation and the Bank's categories. 111 T he following tables present the Total risk-based, Tier I risk-based, CET1 risk-based and Tier I leverage requirements under the Basel III Rules as of December 31: 2025 Actual For Capital Adequacy Purposes Well Capitalized Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Total Capital (to Risk-Weighted Assets): Corporation $ 3,716,146 15.2 % $ 1,960,184 8.0 % N/A N/A Fulton Bank 3,480,147 14.3 1,951,104 8.0 $ 2,438,880 10.0 % Tier I Capital (to Risk-Weighted Assets): Corporation $ 3,080,327 12.6 % $ 1,470,138 6.0 % N/A N/A Fulton Bank 3,174,366 13.0 1,463,328 6.0 $ 1,951,104 8.0 % CET1 Capital (to Risk-Weighted Assets): Corporation $ 2,887,449 11.8 % $ 1,102,603 4.5 % N/A N/A Fulton Bank 3,130,366 12.8 1,097,496 4.5 $ 1,585,272 6.5 % Tier I Leverage Capital (to Average Assets): Corporation $ 3,080,327 9.7 % $ 1,265,715 4.0 % N/A N/A Fulton Bank 3,174,366 10.1 1,262,175 4.0 $ 1,577,719 5.0 % N/A - Not applicable as "well capitalized" applies to banks only. 2024 Actual For Capital Adequacy Purposes Well Capitalized Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Total Capital (to Risk-Weighted Assets): Corporation $ 3,544,021 14.3 % $ 1,986,754 8.0 % N/A N/A Fulton Bank 3,338,891 13.5 1,976,697 8.0 $ 2,470,871 10.0 % Tier I Capital (to Risk-Weighted Assets): Corporation $ 2,866,143 11.5 % $ 1,490,065 6.0 % N/A N/A Fulton Bank 3,029,881 12.3 1,482,523 6.0 $ 1,976,697 8.0 % CET1 Capital (to Risk-Weighted Assets): Corporation $ 2,673,265 10.8 % $ 1,117,549 4.5 % N/A N/A Fulton Bank 2,985,881 12.1 1,111,892 4.5 $ 1,606,066 6.5 % Tier I Leverage Capital (to Average Assets): Corporation $ 2,866,143 9.0 % $ 1,269,248 4.0 % N/A N/A Fulton Bank 3,029,881 9.6 1,265,809 4.0 $ 1,582,261 5.0 % N/A - Not applicable as "well capitalized" applies to banks only. Dividend and Loan Limitations The dividends that may be paid by the Bank to the Parent Company are subject to certain legal and regulatory limitations. The total amount available for payment of dividends by the Bank to the Parent Company calculated using the three-year earnings test was approximately $ 373.5 million as of December 31, 2025 based on the Bank maintaining enough capital to be considered well capitalized under the Basel III Rules. 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 112 NOTE 13 - INCOME TAXES The components of income tax expense are as follows: 2025 2024 2023 (dollars in thousands) Income before income tax expense (benefit) U.S. $ 485,586 $ 344,629 $ 348,721 Income tax expense (benefit) Current tax expense U.S. federal $ 84,652 $ 66,817 $ 49,707 U.S. state and local 13,493 12,256 11,137 Total current tax expense 98,145 79,073 60,844 Deferred tax (benefit) expense U.S. federal ( 2,685 ) ( 20,248 ) 3,021 U.S. state and local ( 1,483 ) ( 2,939 ) 576 Total deferred tax (benefit) expense ( 4,168 ) ( 23,187 ) 3,597 Total income tax expense (benefit) U.S. federal 81,967 46,569 52,728 U.S. state and local 12,010 9,317 11,713 Total income tax expense (benefit) $ 93,977 $ 55,886 $ 64,441 There was no income from foreign countries for the years ended December 31, 2025, 2024 and 2023. The differences between the effective income tax rate and the federal statutory income tax rate are as follows: 2025 2024 2023 (dollars in thousands) U.S. federal statutory tax rate $ 101,973 21.0 % $ 72,372 21.0 % $ 73,231 21.0 % Federal Tax credits Low-income housing tax credits, net ( 4,051 ) ( 0.8 ) ( 1,163 ) ( 0.3 ) $ ( 4,716 ) ( 1.3 ) Other, net 6 — 29 — 24 — Non-taxable or non-deductible items Tax-exempt income on loans ( 9,875 ) ( 2.0 ) ( 9,636 ) ( 2.8 ) ( 8,445 ) ( 2.4 ) Tax-exempt income on securities ( 4,700 ) ( 1.0 ) ( 5,224 ) ( 1.5 ) ( 6,120 ) ( 1.8 ) Bargain purchase gain — — ( 7,769 ) ( 2.3 ) — — Other 1,643 0.3 833 0.2 1,415 0.4 Domestic state and local income tax, net of federal 8,981 1.9 6,444 1.9 9,052 2.6 Total income tax expense $ 93,977 19.4 % $ 55,886 16.2 % $ 64,441 18.5 % There were no domestic federal reconciling items related to the effect of cross-border tax laws, the effect of changes in tax laws or rates enacted in the current period, changes in valuation allowance, foreign tax effects, or changes in unrecognized tax benefits. State and local income taxes in New Jersey, Maryland and Delaware comprised the majority of the domestic state and local income taxes, net of federal effect for the years 2025, 2024 and 2023, respectively. 113 The components of income taxes paid are as follows: 2025 2024 2023 (dollars in thousands) U.S. federal, net of refunds $ 96,396 $ 11,656 $ 10,423 U.S. state and local, net of refunds New Jersey 8,110 5,638 3,671 Maryland 5,508 2,488 2,329 Delaware 2,452 2,476 1,939 Other 222 505 78 Total U.S. state and local, net of refunds 16,292 11,107 8,017 Total income taxes paid $ 112,688 $ 22,763 $ 18,440 The net DTA recorded by the Corporation is included in other assets and consists of the following tax effects of temporary differences as of December 31: 2025 2024 (dollars in thousands) Deferred tax assets: Allowance for credit losses $ 89,053 $ 90,148 Unrealized holding losses on securities 62,962 85,516 Lease liability 35,969 34,921 State loss carryforwards 27,964 26,118 Other accrued expenses 14,908 16,142 Deferred compensation 12,683 11,138 Stock-based compensation 5,042 5,458 Intangible assets 4,403 5,889 New Jersey FAS 109 deduction 2,412 2,412 Other 6,916 5,032 Total gross deferred tax assets $ 262,312 $ 282,774 Deferred tax liabilities: Equipment lease financing 50,366 45,644 Right-of-use-asset 32,875 31,960 Acquisition premiums/discounts 8,999 16,360 Postretirement and defined benefit plans 7,320 5,560 MSRs 6,978 6,952 Tax credit investments 1,241 2,033 Premises and equipment — 736 Total gross deferred tax liabilities $ 107,779 $ 109,245 Net deferred tax asset, before valuation allowance 154,533 173,529 Valuation allowance ( 27,964 ) ( 26,118 ) Net deferred tax asset $ 126,569 $ 147,411 In assessing the realizability of DTAs, management considers whether it is more likely than not that some or all of the DTAs will not be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income and/or capital gain income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies, such as those that may be implemented to generate capital gains, in making this assessment. The valuation allowance relates to state net operating loss carryforwards for which realizability is uncertain. As of December 31, 2025 and 2024, the Corporation had state net operating loss carryforwards of approximately $ 416.8 million and $ 389.3 million, respectively, which are available to offset future state taxable income, and expire at various dates through 2045. 114 As of December 31, 2025, 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. Uncertain Tax Positions The following table summarizes the changes in unrecognized tax benefits for the years ended December 31: 2025 2024 2023 (dollars in thousands) Balance at beginning of year $ 1,060 $ 1,044 $ 1,228 Current period tax positions 114 120 147 Lapse of statute of limitations ( 82 ) ( 104 ) ( 331 ) Balance at end of year $ 1,092 $ 1,060 $ 1,044 Virtually all of the Corporation's unrecognized tax benefits are for positions that are taken on an annual basis on state tax returns. Increases to unrecognized tax benefits will occur as a result of accruing for the nonrecognition of the position for the current year. Decreases will occur as a result of the lapsing of the statute of limitations for the oldest outstanding year which includes the position. Decreases can also occur throughout the settlement of positions with taxing authorities. As of December 31, 2025, if recognized, all of the Corporation's unrecognized tax benefits would impact the effective tax rate. Not included in the table above is $ 131 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. Penalties, if incurred, would also be recognized in income tax expense. The Corporation recognized approximately $ 45 thousand and $ 168 thousand of recoveries in 2025 and 2024, respectively, for interest and penalties in income tax expense related to unrecognized tax positions. As of December 31, 2025 and 2024, total accrued interest and penalties related to unrecognized tax positions were approximately $ 133 thousand and $ 177 thousand, respectively. The Corporation files income tax returns in the federal and various state jurisdictions. In most cases, unrecognized tax benefits are related to tax years that remain subject to examination by the relevant taxing authorities. With few exceptions, the Corporation is no longer subject to federal, state and local examinations by tax authorities for years before 2022. Tax Credit Investments The TCIs are included in other assets, with any unfunded equity commitments recorded in other liabilities on the Consolidated Balance Sheets and changes are reflected in change in tax credit investments in the Consolidated Statements of Cash Flows. In 2023, the Corporation adopted ASU 2023-02, which allows all TCIs to qualify for the proportional amortization method if: (1) it is probable that the income tax credits allocatable to the Corporation will be available; (2) the Corporation does not have the ability to exercise significant influence over the operating and financial policies of the underlying project; (3) substantially all of the projected benefits are from income tax credits and other income tax benefits; (4) the Corporation's projected yield based solely on the cash flows from the income tax credits and other income tax benefits is positive; and (5) the Corporation is a limited liability investor in the limited liability entity for both legal and tax purposes, and the Corporation’s liability is limited to its capital investment. See "Note 1 - Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements. All TCIs held as of December 31, 2025 and 2024 that qualify for the proportional amortization method are amortized over the period the Corporation expects to receive the tax credits, with the expense included within income taxes on the Consolidated Statements of Income and net income in the Consolidated Statements of Cash Flows. All TCIs are evaluated for impairment at the end of each reporting period. There were no impairments recorded against TCIs during 2025. 115 The following table presents the balances of the Corporation's TCIs and related unfunded commitments as of December 31: 2025 2024 Included in other assets: (dollars in thousands) Affordable housing tax credit investments, net $ 218,810 $ 211,572 Other tax credit investments, net 35,652 29,649 Total TCIs, net $ 254,462 $ 241,221 Included in other liabilities: Unfunded affordable housing tax credit commitments $ 78,702 $ 84,572 Other tax credit liabilities 29,551 24,109 Total unfunded tax credit commitments and liabilities $ 108,253 $ 108,681 The following table presents other information relating to the Corporation's TCIs for the years ended December 31: 2025 2024 2023 (dollars in thousands) Components of income taxes: Tax credits and benefits $ ( 32,143 ) $ ( 26,762 ) $ ( 28,748 ) Amortization of tax credits and benefits, net of tax benefits 27,536 25,069 23,446 Deferred tax expense 566 559 610 Total reduction in income tax expense $ ( 4,041 ) $ ( 1,134 ) $ ( 4,692 ) NOTE 14 - NET INCOME PER COMMON SHARE Basic net income per common share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding. 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 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. A reconciliation of weighted average common shares outstanding used to calculate basic and diluted net income per share follows: 2025 2024 2023 (in thousands) Weighted average common shares outstanding (basic) 181,621 175,523 165,241 Impact of common stock equivalents 1,668 1,700 1,528 Weighted average common shares outstanding (diluted) 183,289 177,223 166,769 116 NOTE 15 - SHAREHOLDERS' EQUITY Preferred Stock On October 29, 2020, the Corporation issued 8.0 million depositary shares ("Depositary Shares"), each representing a 1/40 th interest in a share of the Corporation's 5.125 % Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, of which 200,000 are authorized and issued, with a liquidation preference of $ 1,000 per share (equivalent to $ 25.00 per Depositary Share), for an aggregate offering amount of $ 200 million. 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. 117 Accumulated Other Comprehensive Income (Loss) 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) 2025 Net unrealized gains on investment securities $ 84,428 $ ( 19,815 ) $ 64,613 Reclassification adjustment for investment securities gains included in net income (1) 2 — 2 Amortization of net unrealized gains on AFS investment securities transferred to HTM (2) 6,897 ( 1,224 ) 5,673 Net unrealized holding gains arising during the period on interest rate derivatives used in cash flow hedges 862 ( 123 ) 739 Reclassification adjustment for net gains realized in net income on interest rate derivatives used in cash flow hedges 20,404 ( 4,696 ) 15,708 Unrecognized pension and postretirement income 3,693 ( 867 ) 2,826 Amortization of net unrecognized pension and postretirement items (3) ( 554 ) 130 ( 424 ) Total Other Comprehensive Income $ 115,732 $ ( 26,595 ) $ 89,137 2024 Net unrealized losses on investment securities $ ( 28,993 ) $ 6,568 $ ( 22,425 ) Reclassification adjustment for investment securities gains included in net income (1) 20,283 ( 4,594 ) 15,689 Amortization of net unrealized gains on AFS investment securities transferred to HTM (2) 7,251 ( 1,642 ) 5,609 Net unrealized holding gains arising during the period on interest rate derivatives used in cash flow hedges 764 ( 174 ) 590 Reclassification adjustment for net gains 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) ( 541 ) 119 ( 422 ) Total Other Comprehensive Income $ 31,628 $ ( 7,167 ) $ 24,461 2023 Net unrealized gains on investment securities $ 46,572 $ ( 10,549 ) $ 36,023 Reclassification adjustment for investment securities losses included in net income (1) ( 733 ) 166 ( 567 ) Amortization of net unrealized gains on AFS investment securities transferred to HTM (2) 7,644 ( 1,731 ) 5,913 Net unrealized holding gains arising during the period on interest rate derivatives used in cash flow hedges 9,048 ( 2,050 ) 6,998 Reclassification adjustment for net gains realized in net income on interest rate swaps 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) 73 ( 16 ) 57 Total Other Comprehensive Income $ 94,616 $ ( 21,420 ) $ 73,196 (1) Amounts reclassified out of AOCI. Before-tax amounts included in "Investment securities (losses) gains, net" on the Consolidated Statements of Income. See "Note 4 - Investment Securities," for additional details. (2) Amounts reclassified out of AOCI. Before-tax amounts included in "Interest Income" on the Consolidated Statements of Income. (3) Amounts reclassified out of AOCI. Before-tax amounts included in "Salaries and employee benefits" on the Consolidated Statements of Income. 118 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 Gains (Losses) on Interest Rate Derivatives used in Cash Flow Hedges Unrecognized Pension and Postretirement Plan Income (Costs) Total (dollars in thousands) Balance at December 31, 2022 $ ( 316,231 ) $ ( 61,776 ) $ ( 7,469 ) $ ( 385,476 ) OCI before reclassifications 36,023 6,998 4,777 47,798 Amounts reclassified from AOCI ( 567 ) 19,995 57 19,485 Amortization of net unrealized gains on AFS investment securities transferred to HTM 5,913 — — 5,913 Balance at December 31, 2023 ( 274,862 ) ( 34,783 ) ( 2,635 ) ( 312,280 ) OCI before reclassifications ( 22,425 ) 590 7,279 ( 14,556 ) Amounts reclassified from AOCI 15,689 18,141 ( 422 ) 33,408 Amortization of net unrealized gains on AFS investment securities transferred to HTM 5,609 — — 5,609 Balance at December 31, 2024 ( 275,989 ) ( 16,052 ) 4,222 ( 287,819 ) OCI before reclassifications 64,613 739 — 65,352 Amounts reclassified from AOCI 2 15,708 2,402 18,112 Amortization of net unrealized gains on AFS investment securities transferred to HTM 5,673 — — 5,673 Balance at December 31, 2025 $ ( 205,701 ) $ 395 $ 6,624 $ ( 198,682 ) Common Stock Repurchase Programs On December 16, 2025, the Corporation announced that its Board of Directors approved the 2026 Repurchase Program. The 2026 Repurchase Program will expire on January 31, 2027. Under the 2026 Repurchase Program the Corporation is authorized to repurchase up to $ 150.0 million of shares of its common stock. Under this authorization, up to $ 25.0 million of the $ 150.0 million authorization may be used to repurchase the Corporation's preferred stock and outstanding subordinated notes. The 2026 Repurchase Program may be discontinued at any time. On December 17, 2024, the Corporation announced that its Board of Directors approved the 2025 Repurchase Program. The 2025 Repurchase Program expired on December 31, 2025. Under the 2025 Repurchase Program, the Corporation was authorized to repurchase up to $ 125.0 million of shares of its common stock. Under this authorization, up to $ 25.0 million of the $ 125.0 million authorization could be used to repurchase the Corporation's preferred stock and outstanding Subordinated Notes due 2030. During 2025, approximately 3.3 million shares of common stock were repurchased at a total cost of $ 59.7 million, or an average cost of $ 18.16 per share, under t he 2025 Repurchase Program. On December 19, 2023, the Corporation announced that its Board of Directors approved the 2024 Repurchase Program. 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. Under this authorization, up to $ 25.0 million of the $ 125.0 million authorization could be used to repurchase the Corporation's preferred stock and outstanding subordinated notes through December 31, 2024. During 202 4, approximately 1.9 million shares of common stock were repurchased at a total cost of $ 30.3 million, or an average cost of $ 15.69 per share, under t he 2024 Repurchase Program Under these repurchase programs, repurchased shares are added to treasury stock, at cost. As permitted by securities laws and other legal requirements, and subject to market conditions and other factors, purchases may be made from time to time in open market or privately negotiated transactions, including, without limitation, through accelerated share repurchase transactions. 119 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: 2025 2024 2023 (dollars in thousands) Compensation expense $ 13,684 $ 10,907 $ 11,265 Tax benefit ( 3,110 ) ( 2,466 ) ( 2,484 ) Total stock-based compensation, net of tax $ 10,574 $ 8,441 $ 8,781 The tax benefits as a percentage of compensation expense, as shown in the preceding table, were 22.7 %, 22.6 % and 22.1 % in 2025, 2024 and 2023, respectively. These percentages differ from the Corporation's federal statutory tax rate of 21 %. Tax benefits are only recognized over the vesting period for awards that ordinarily will generate a tax deduction when exercised, in the case of non-qualified stock options, or upon vesting, in the case of RSUs, and PSUs. Tax benefits in excess of the tax rate resulted from incentive stock option exercises that triggered a tax deduction when they were exercised and excess tax benefits realized on vesting RSUs and PSUs during the period. The following table presents information about stock options exercised for the years ended December 31: 2025 2024 2023 (dollars in thousands) Number of options exercised — 39,310 68,134 Total intrinsic value of options exercised $ — $ 116 $ 249 Cash received from options exercised $ — $ 496 $ 805 Tax benefit from options exercised $ — $ 23 $ 47 Upon exercise, the Corporation issued shares from its authorized, but unissued, common stock to satisfy the stock options. As of December 31, 2024, there were no outstanding stock options. The Corporation did not issue any stock options during the years ended December 31, 2025, 2024 and 2023. The following table provides information about nonvested RSUs and PSUs granted under the Employee Equity Plan and Directors' Plan for the year ended December 31, 2025: RSUs/PSUs Shares Weighted Average Grant Date Fair Value Nonvested as of December 31, 2024 2,702,997 $ 14.57 Granted 1,057,072 17.03 Vested ( 796,124 ) 15.38 Forfeited ( 87,395 ) 15.42 Nonvested as of December 31, 2025 2,876,550 $ 15.22 As of December 31, 2025, there was $ 14.2 million of total unrecognized compensation cost (pre-tax) related to RSUs and PSUs that will be recognized as compensation expense over a weighted average period of 1.95 years. As of December 31, 2025, the Employee Equity Plan had 3.2 million shares reserved for future grants through 2032, and the Directors' Plan had 256.2 thousand shares reserved for future grants through 2033. The fair value of certain PSUs with market-based performance conditions granted under the Employee Equity Plan was estimated on the grant date using the Monte Carlo valuation methodology performed by a third-party valuation expert. This valuation is dependent upon certain assumptions, as summarized in the following table: 2025 2024 2023 Risk-free interest rate 3.66 % 4.75 % 3.84 % Volatility of Corporation’s stock 32.92 % 30.54 % 35.63 % Expected life of PSUs 3 years 3 years 3 years 120 The expected life of the PSUs with fair values measured using the Monte Carlo valuation methodology was based on the defined performance period of three years . Volatility of the Corporation's stock was based on historical volatility for the period commensurate with the expected life of the PSUs. The risk-free interest rate is the zero-coupon U.S. Treasury rate commensurate with the expected life of the PSUs on the grant date. Based on the assumptions above, the Corporation calculated an estimated fair value per PSU with market-based performance conditions granted in 2025, 2024 and 2023 of $ 16.73 , $ 19.59 and $ 10.63 , respectively. Under the ESPP, eligible employees can purchase stock of the Corporation at 85 % of the fair market value of the stock on the date of purchase. The ESPP is considered to be a compensatory plan and, as such, compensation expense is recognized for the 15 % discount on shares purchased. The following table summarizes activity under the ESPP: 2025 2024 2023 ESPP shares purchased 131,062 133,019 162,667 Average purchase price per share (85% of market value) $ 15.44 $ 14.55 $ 11.68 Compensation expense recognized (in thousands) $ 357 $ 342 $ 348 NOTE 17 - EMPLOYEE BENEFIT PLANS The following summarizes retirement plan expense for the years ended December 31: 2025 2024 2023 (dollars in thousands) 401(k) Retirement Plan $ 14,069 $ 13,739 $ 11,930 Pension Plan ( 841 ) ( 1,036 ) 464 Total $ 13,228 $ 12,703 $ 12,394 The Corporation's 401(k) Retirement Plan is a defined contribution plan under which eligible employees may defer a portion of their pre-tax covered compensation on an annual basis, with employer matches of up to 5 % of employee compensation. Employee and employer contributions under these features are 100 % vested. Contributions to the Pension Plan are actuarially determined and funded annually, if necessary. The Corporation recognizes the funded status of its Pension Plan on the Consolidated Balance Sheets and recognizes the changes in that funded status through OCI. The Pension Plan has been curtailed, with no additional benefits accruing to participants. Pension Plan The net periodic pension cost for the Pension Plan, as determined by consulting actuaries, consisted of the following components for the years ended December 31: 2025 2024 2023 (dollars in thousands) Interest cost $ 3,070 $ 3,159 $ 3,269 Expected return on assets ( 3,911 ) ( 3,903 ) ( 3,436 ) Net amortization and deferral — — 631 Gain on settlement — ( 292 ) — Net periodic pension cost $ ( 841 ) $ ( 1,036 ) $ 464 121 The following table summarizes the changes in the projected benefit obligation and fair value of Pension Plan assets for the plan years ended December 31: 2025 2024 (dollars in thousands) Projected benefit obligation at beginning of year $ 59,429 $ 68,952 Interest cost 3,070 3,159 Benefit payments ( 4,761 ) ( 8,843 ) Change in assumptions 1,196 ( 4,323 ) Experience gain 356 484 Projected benefit obligation at end of year $ 59,290 $ 59,429 Fair value of plan assets at beginning of year $ 85,595 $ 84,659 Actual return on plan assets 9,309 9,779 Benefit payments ( 4,761 ) ( 8,843 ) Fair value of plan assets at end of year $ 90,143 $ 85,595 The following table presents the funded status of the Pension Plan, included in other assets and other liabilities on the Consolidated Balance Sheets, as of December 31: 2025 2024 (dollars in thousands) Projected benefit obligation $ ( 59,290 ) $ ( 59,429 ) Fair value of plan assets 90,143 85,595 Funded status $ 30,853 $ 26,166 The following table summarizes the changes in the unrecognized net loss included as a component of AOCI: Unrecognized Net Loss (Gain) Before tax Net of tax (dollars in thousands) Balance as of December 31, 2023 $ 5,320 $ 4,117 Recognized as a component of 2024 periodic pension cost — — Unrecognized gains arising in 2024 ( 9,417 ) ( 7,284 ) Balance as of December 31, 2024 ( 4,097 ) ( 3,167 ) Recognized as a component of 2025 periodic pension cost — — Unrecognized gains arising in 2025 ( 3,853 ) ( 2,949 ) Balance as of December 31, 2025 $ ( 7,950 ) $ ( 6,116 ) The following rates were used to calculate the net periodic pension cost and the present value of benefit obligations as of December 31: 2025 2024 2023 Discount rate-projected benefit obligation 5.14 % 5.38 % 4.73 % Expected long-term rate of return on plan assets 5.00 % 5.00 % 5.00 % The discount rates used were determined using the FTSE Pension Discount Curve (formerly, the Citigroup Average Life discount rate table), as adjusted based on the Pension Plan's expected benefit payments. The 5.00 % long-term rate of return on plan assets used to calculate the net periodic pension cost was based on historical returns, adjusted for expectations of long-term asset returns based on the December 31, 2025 weighted average asset allocations. The expected long-term return is considered to be appropriate based on the asset mix and the historical returns realized. 122 The following table presents a summary of the fair values of the Pension Plan's assets as of December 31: 2025 2024 Estimated Fair Value % of Total Assets Estimated Fair Value % of Total Assets (dollars in thousands) Equity mutual funds $ 31,272 $ 31,369 Equity common trust funds 15,450 16,486 Equity securities 46,722 51.7 % 47,855 55.9 % Cash and money market funds 9,802 5,534 Fixed income mutual funds 14,181 13,590 Corporate debt securities 4,840 4,090 U.S. Government agency securities 9,455 9,493 Fixed income securities and cash 38,278 42.4 % 32,707 38.2 % Other alternative investment funds 5,351 5.9 % 5,033 5.9 % Total $ 90,351 100.0 % $ 85,595 100.0 % Investment allocation decisions are made by a retirement plan committee. The goal of the investment allocation strategy is to match certain benefit obligations with maturities of fixed income securities. Alternative investments may include managed futures, commodities, real estate investment trusts, master limited partnerships, and long-short strategies with traditional stocks and bonds. All alternative investments are in the form of mutual funds, not individual contracts, to enable daily liquidity. The fair values for assets held by the Pension Plan are based on quoted prices for identical instruments and would be categorized as Level 1 assets under the fair value hierarchy. Estimated future benefit payments are as follows (in thousands): Year 2026 $ 4,906 2027 4,900 2028 4,878 2029 4,831 2030 4,756 Thereafter 22,641 Total $ 46,912 Multiemployer Defined Benefit Pension Plan In connection with the Prudential Bancorp 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 multiple employer plan are a general charge upon all its assets. This structure gives rise to the risk that if a participating employer fails before funding up to cover the liabilities of its participants and orphans, then contributions for all remaining employers would increase, as assets have to be re-allocated to cover such shortfall. 123 Information regarding the Prudential Bancorp Pension Plan as of December 31, 2025 is as follows: Legal Name of Plan Prudential Bancorp Pension Plan (dollars in thousands) Plan Employer Identification Number 23-1928421 The Corporation's contribution for the year ended December 31, 2025 (1) $ 972 Are the Corporation's contributions more than 5% of total contributions? No Funded Status 80.01 % (1) Includes 2026 prepayment of $ 120 thousand. Postretirement Benefits The Corporation provides medical benefits and life insurance benefits under the Postretirement Plan to certain retired full-time employees who were employees of the Corporation prior to January 1, 1998. Prior to February 1, 2014, certain full-time employees became eligible for these discretionary benefits if they reached retirement age while working for the Corporation. The Corporation recognizes the funded status of the Postretirement Plan on the Consolidated Balance Sheets and recognizes the changes in that funded status through OCI. The components of the net benefit for Postretirement Plan other than pensions are as follows: 2025 2024 2023 (dollars in thousands) Interest cost $ 35 $ 38 $ 42 Net amortization and deferral ( 543 ) ( 541 ) ( 558 ) Net postretirement benefit $ ( 508 ) $ ( 503 ) $ ( 516 ) This table summarizes the changes in the accumulated postretirement benefit obligation for the years ended December 31: 2025 2024 (dollars in thousands) Accumulated postretirement benefit obligation at beginning of year $ 753 $ 844 Interest cost 35 38 Benefit payments ( 118 ) ( 135 ) Change in experience ( 39 ) 42 Change in assumptions 7 ( 36 ) Accumulated postretirement benefit obligation at end of year $ 638 $ 753 The fair values of the Postretirement Plan assets were $ 0 as of both December 31, 2025 and 2024. The funded status for the Postretirement Plan included in other liabilities was $ 0.6 million and $ 0.8 million in the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively. 124 The following table summarizes the changes in items recognized as a component of accumulated other comprehensive income (loss): Before tax Unrecognized Prior Service Cost Unrecognized Net Loss (Gain) Total Net of tax (dollars in thousands) Balance as of December 31, 2023 $ ( 1,620 ) $ ( 747 ) $ ( 2,367 ) $ ( 1,847 ) Recognized as a component of 2024 postretirement cost 464 77 541 422 Unrecognized loss arising in 2024 — 6 6 5 Balance as of December 31, 2024 ( 1,156 ) ( 664 ) ( 1,820 ) ( 1,420 ) Recognized as a component of 2025 postretirement cost 464 79 543 422 Unrecognized gain arising in 2025 — ( 32 ) ( 32 ) ( 24 ) Balance as of December 31, 2025 $ ( 692 ) $ ( 617 ) $ ( 1,309 ) $ ( 1,022 ) The following rates were used to calculate net periodic postretirement benefit cost and the present value of benefit obligations as of December 31: 2025 2024 2023 Discount rate-projected benefit obligation 5.14 % 5.38 % 4.73 % Expected long-term rate of return on plan assets 3.00 % 3.00 % 3.00 % The discount rates used to calculate the accumulated postretirement benefit obligation were determined using the FTSE Pension Discount Curve (formerly, the Citigroup Average Life discount rate table), as adjusted based on the Postretirement Plan's expected benefit payments. Estimated future benefit payments under the Postretirement Plan are as follows (dollars in thousands): Year 2026 $ 110 2027 99 2028 88 2029 78 2030 68 Thereafter 226 Total $ 669 125 NOTE 18 - LEASES The Corporation has operating leases for certain financial centers, corporate offices and land. The following table presents the components of lease expense, which is included in net occupancy expense on the Consolidated Statements of Income: 2025 2024 2023 (dollars in thousands) Operating lease expense $ 27,852 $ 27,893 $ 19,372 Variable lease expense 3,966 3,147 3,160 Sublease income ( 851 ) ( 1,224 ) ( 1,111 ) Total lease expense $ 30,967 $ 29,816 $ 21,421 Supplemental Consolidated Balance Sheet information related to leases was as follows as of December 31: Operating Leases Balance Sheet Classification 2025 2024 (dollars in thousands) ROU assets Other assets $ 139,965 $ 140,997 Lease liabilities Other liabilities $ 153,253 $ 154,176 Weighted average remaining lease term 9.04 years 9.30 years Weighted average discount rate 5.90 % 5.51 % 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: 2025 2024 (dollars in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 29,224 $ 25,161 ROU assets obtained in exchange for lease obligations 20,978 78,278 Lease payment obligations for each of the next five years and thereafter, with a reconciliation to the Corporation's lease liability were as follows: Year Operating Leases (dollars in thousands) 2026 $ 27,737 2027 25,482 2028 22,772 2029 19,560 2030 18,112 Thereafter 89,922 Total lease payments 203,585 Less: imputed interest ( 50,332 ) Present value of lease liabilities $ 153,253 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 126 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, 2025, the Corporation had not entered into any significant leases that have not yet commenced. NOTE 19 - FAIR VALUE MEASUREMENTS The following tables present assets and liabilities measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets: 2025 Level 1 Level 2 Level 3 Total (dollars in thousands) Loans held for sale $ — $ 16,316 $ — $ 16,316 AFS investment securities: State and municipal securities — 826,693 — 826,693 Corporate debt securities — 214,921 — 214,921 Collateralized mortgage obligations — 1,040,078 — 1,040,078 Residential mortgage-backed securities — 766,717 — 766,717 Commercial mortgage-backed securities — 559,450 — 559,450 Total AFS investment securities — 3,407,859 — 3,407,859 Other assets: Investments held in Rabbi Trust 39,395 — — 39,395 Derivative assets 891 128,816 — 129,707 Total assets $ 40,286 $ 3,552,991 $ — $ 3,593,277 Other liabilities: Deferred compensation liabilities $ 39,395 $ — $ — $ 39,395 Derivative liabilities 720 170,289 — 171,009 Total liabilities $ 40,115 $ 170,289 $ — $ 210,404 2024 Level 1 Level 2 Level 3 Total (dollars in thousands) Loans held for sale $ — $ 25,618 $ — $ 25,618 AFS investment securities: State and municipal securities — 814,887 — 814,887 Corporate debt securities — 300,370 — 300,370 Collateralized mortgage obligations — 788,885 — 788,885 Residential mortgage-backed securities — 989,875 — 989,875 Commercial mortgage-backed securities — 516,882 — 516,882 Total AFS investment securities — 3,410,899 — 3,410,899 Other assets: Investments held in Rabbi Trust 35,093 — — 35,093 Derivative assets 1,682 159,939 — 161,621 Total assets $ 36,775 $ 3,596,456 $ — $ 3,633,231 Other liabilities: Deferred compensation liabilities $ 35,093 $ — $ — $ 35,093 Derivative liabilities 1,596 252,821 — 254,417 Total liabilities $ 36,689 $ 252,821 $ — $ 289,510 127 The valuation techniques used to measure fair value for the items in the preceding tables are as follows: Loans held for sale - This category includes mortgage loans held for sale that are measured at fair value. Fair values as of December 31, 2025 and 2024, 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. AFS investment securities - Included in this asset category are debt securities. Level 2 investment securities are valued by a third-party pricing service. 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. Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, including market research publications. For certain security types, additional inputs may be used or some of the standard market inputs may not be applicable. • 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 - These securities are classified as Level 2. This category consists of subordinated and senior debt issued by financial institutions ($ 207.5 million at December 31, 2025 and $ 293.1 million at December 31, 2024) and other corporate debt issued by non-financial institutions ($ 7.4 million at December 31, 2025 and $ 7.3 million at December 31, 2024). 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. Shares of mutual funds are valued based on net asset value, which represents quoted market prices for the underlying shares held in the mutual funds, and as such, are classified as Level 1. Derivative assets - Fair value of foreign currency exchange contracts classified as Level 1 assets ($ 0.9 million at December 31, 2025 and $ 1.7 million at December 31, 2024). 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 represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors ($ 0.6 million at December 31, 2025 and $ 0.8 million at December 31, 2024) and the fair value of interest rate derivatives ($ 128.3 million at December 31, 2025 and $ 159.2 million at December 31, 2024). The fair values of the interest rate locks, forward commitments and interest rate derivatives represent the amounts that would be required to settle the derivative financial instruments at the balance sheet date. See "Note 11 - Derivative Financial Instruments," for additional information. Deferred compensation liabilities - Fair value of amounts due to employees under deferred compensation plans, classified as Level 1 liabilities and are included in other liabilities on the Consolidated Balance Sheets. The fair values of these liabilities are determined in the same manner as the related assets, as described under the heading "Investments held in Rabbi Trust" above. Derivative liabilities - Level 1 liabilities represent the fair value of foreign currency exchange contracts ($ 0.7 million and $ 1.6 million at December 31, 2025 and 2024, respectively). Level 2 liabilities represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors ($ 0.2 million at December 31, 2025 and $ 0.1 million at December 31, 2024) and the fair value of interest rate derivatives ($ 170.1 million at December 31, 2025 and $ 252.8 million at December 31, 2024). The fair values of these liabilities are determined in the same manner as the related assets, as described under the heading "Derivative assets" above. 128 Certain financial instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment. The following table presents Level 3 financial assets measured at fair value on a nonrecurring basis : 2025 2024 (dollars in thousands) Loans, Net $ 135,993 $ 168,668 OREO 1,365 2,621 MSRs (1) 49,861 53,972 SBA servicing asset 2,256 3,120 Total assets $ 189,475 $ 228,381 (1) Amounts shown are estimated fair value. MSRs are recorded on the Corporation's Consolidated Balance Sheets at lower of amortized cost or fair value. See "Note 8 - Mortgage Servicing Rights" for additional information. The valuation techniques used to measure fair value for the items in the table above are as follows: • Loans, net – This category consists of loans that were individually evaluated for impairment and have been classified as Level 3 assets. The amount shown is the balance of non-accrual loans, net of related ACL. See "Note 5 - Loans and Allowance for Credit Losses," for additional details. • OREO – This category consists of OREO classified as Level 3 assets, for which the fair values were based on estimated selling prices less estimated selling costs for similar assets in active markets. • MSRs – This category consists of MSRs, which were initially recorded at fair value upon the sale of residential mortgage loans to secondary market investors, and subsequently carried at the lower of amortized cost or fair value. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are stratified by product type and evaluated for impairment by comparing each stratum's carrying amount to its estimated fair value. Fair values are determined at the end of each quarter through a discounted cash flows valuation performed by a third-party valuation expert. Significant inputs to the valuation included expected net servicing income, the discount rate and the expected life of the underlying loans. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections. The weighted average annual constant prepayment rate and the weighted average discount rate used in the December 31, 2025 valuation were 7.0 % and 8.6 %, respectively. Management reviews the reasonableness of the significant inputs to the third-party valuation in comparison to market data. See "Note 8 - Mortgage Servicing Rights," for additional information. Changes in any of those inputs, in isolation, could result in a significantly different fair value measurement, as depicted in the table below: Significant Input Scenario Shock % Change in Valuation Prepayment Rate + 15% ( 5 )% Prepayment Rate - 15% 5 % Discount Rate - 200 bps 10 % Discount Rate + 200 bps ( 8 )% • 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. Because the valuation model uses significant unobservable inputs, the SBA servicing asset is classified within Level 3. 129 The following table details the book values and the estimated fair values of the Corporation's financial instruments as of December 31, 2025 and 2024. A general description of the methods and assumptions used to estimate such fair values is also provided. 2025 Estimated Fair Value Carrying Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS (dollars in thousands) Cash and cash equivalents $ 1,061,609 $ 1,061,609 $ — $ — $ 1,061,609 FRB and FHLB stock 121,009 — 121,009 — 121,009 Loans held for sale 16,316 — 16,316 — 16,316 AFS investment securities 3,407,859 — 3,407,859 — 3,407,859 HTM investment securities 1,425,885 — 1,267,578 — 1,267,578 Loans, net 23,780,422 — — 22,590,142 22,590,142 Accrued interest receivable 113,698 113,698 — — 113,698 Other assets 721,469 556,071 132,043 53,482 741,596 FINANCIAL LIABILITIES Demand and savings deposits $ 21,739,113 $ 21,739,113 $ — $ — $ 21,739,113 Brokered deposits 855,042 80,215 774,914 — 855,129 Time deposits 3,995,252 — 3,991,203 — 3,991,203 Accrued interest payable 17,130 17,130 — — 17,130 FHLB advances 250,000 251,991 — — 251,991 Senior debt and subordinated debt 367,637 — 351,870 — 351,870 Other borrowings 679,738 654,238 916 — 655,154 Other liabilities 247,490 62,228 170,290 14,972 247,490 2024 Estimated Fair Value Carrying Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS (dollars in thousands) Cash and cash equivalents $ 1,063,871 $ 1,063,871 $ — $ — $ 1,063,871 FRB and FHLB stock 139,574 — 139,574 — 139,574 Loans held for sale 25,618 — 25,618 — 25,618 AFS investment securities 3,410,899 — 3,410,899 — 3,410,899 HTM investment securities 1,395,569 — 1,183,449 — 1,183,449 Loans, net 23,665,763 — — 22,555,687 22,555,687 Accrued interest receivable 117,029 117,029 — — 117,029 Other assets 736,502 543,251 159,939 59,713 762,903 FINANCIAL LIABILITIES Demand and savings deposits $ 21,135,478 $ 21,135,478 $ — $ — $ 21,135,478 Brokered deposits 843,857 145,056 698,647 — 843,703 Time deposits 4,150,098 — 4,154,726 — 4,154,726 Accrued interest payable 31,620 31,620 — — 31,620 FHLB advances 850,000 851,470 — — 851,470 Senior debt and subordinated debt 367,316 — 253,818 — 253,818 Other borrowings 564,732 544,908 901 — 545,809 Other liabilities 467,011 200,029 252,821 14,161 467,011 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. 130 For short-term financial instruments, defined as those with remaining maturities of 90 days or less, and excluding those recorded at fair value on the Corporation's Consolidated Balance Sheets, book value was considered to be a reasonable estimate of fair value. The following instruments are predominantly short-term: Assets Liabilities Cash and cash equivalents Demand and savings deposits Accrued interest receivable Other borrowings Accrued interest payable FRB and FHLB stock represent restricted investments and are carried at cost on the Consolidated Balance Sheets, which is a reasonable estimate of fair value. As of December 31, 2025, fair values for loans and time deposits were estimated by discounting future cash flows using the current rates, as adjusted for liquidity considerations, at which similar loans would be made to borrowers and similar deposits would be issued to customers for the same remaining maturities. Fair values of loans also include estimated credit losses that would be assumed in a market transaction, which represents estimated exit prices. 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 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, Chief Executive Officer and President 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. 131 The following table presents segment results as of December 31: (dollars in thousands, except per-share data) 2025 2024 2023 Interest Income Loans, including fees $ 1,395,992 $ 1,394,969 $ 1,156,373 Investment securities 187,152 136,650 101,518 Other interest income 33,730 50,577 15,345 Total Interest Income 1,616,874 1,582,196 1,273,236 Interest Expense Deposits 514,693 521,859 292,205 Federal funds purchased 13 2,881 30,417 FHLB advances 24,535 37,793 46,965 Senior debt and subordinated debt 18,404 20,255 21,361 Other borrowings and interest-bearing liabilities 22,882 39,083 28,002 Total Interest Expense 580,527 621,871 418,950 Net Interest Income 1,036,347 960,325 854,286 Provision for credit losses 35,698 71,636 54,036 Net Interest Income After Provision for Credit Losses 1,000,649 888,689 800,250 Total Non-Interest Income 276,766 275,731 227,678 Non-Interest Expense Salaries and employee benefits 443,546 432,821 377,417 Data processing and software 75,091 77,882 66,471 Net occupancy 68,125 69,359 58,019 Other outside services 49,902 60,586 47,724 Intangible amortization 22,462 17,830 2,944 FDIC insurance 20,178 23,829 25,565 Equipment 16,176 17,850 14,390 Marketing 9,288 8,958 9,004 Professional fees 5,493 10,857 8,392 Acquisition-related expenses 1,182 37,635 — Other 80,386 62,184 69,281 Total Non-Interest Expense 791,829 819,791 679,207 Income Before Income Taxes 485,586 344,629 348,721 Income taxes 93,977 55,886 64,441 Net Income 391,609 288,743 284,280 Preferred stock dividends ( 10,248 ) ( 10,248 ) ( 10,248 ) Net Income Available to Common Shareholders $ 381,361 $ 278,495 $ 274,032 Net income available to common shareholders per share (diluted) $ 2.08 $ 1.57 $ 1.64 NOTE 21 - COMMITMENTS AND CONTINGENCIES Commitments 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. Because 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 132 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. Collateral held varies but may include accounts receivable, inventory, property, equipment and income-producing commercial properties. Standby letters of credit are conditional commitments issued to guarantee the financial or performance obligation of a borrower or obligor to a third party. Commercial letters of credit are conditional commitments issued to facilitate foreign and domestic trade transactions for borrowers or obligors. The credit risk involved in issuing letters of credit is similar to that involved in extending loan facilities. These obligations are underwritten consistent with commercial lending standards. The maximum exposure to loss for standby and commercial letters of credit is equal to the contractual (or notional) amount of the instruments. The following table presents the Corporation's commitments to extend credit and letters of credit: 2025 2024 (dollars in thousands) Commercial and industrial $ 4,975,873 $ 4,967,334 Real estate - commercial mortgage and real estate - construction 1,477,796 1,706,879 Real estate - home equity 2,256,494 2,154,382 Total commitments to extend credit $ 8,710,163 $ 8,828,595 Standby letters of credit $ 311,697 $ 279,309 Commercial letters of credit 29,842 48,993 Total letters of credit $ 341,539 $ 328,302 Residential Lending The Corporation originates and sells residential mortgages to secondary market investors. The Corporation provides customary representations and warranties to secondary market investors that specify, among other things, that the loans have been underwritten to the standards of the secondary market investor. The Corporation may be required to repurchase specific loans or reimburse the investor for a credit loss incurred on a sold loan if it is determined that the representations and warranties have not been met. Under some agreements with secondary market investors, the Corporation may have additional credit exposure beyond customary representations and warranties, based on the specific terms of those agreements. The Corporation maintains a reserve for estimated losses related to loans sold to investors. As of December 31, 2025 and 2024, the total reserve for losses on residential mortgage loans sold was $ 1.4 million and $ 1.5 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 $ 0.8 million and $ 1.2 million as of December 31, 2025 and 2024, respectively, related to additional credit exposure for potential loan repurchases. Legal Proceedings The Corporation is involved in various pending and threatened claims and other legal proceedings in the ordinary course of its business activities. The Corporation evaluates the possible impact of these matters, taking into consideration the most recent information available. A loss reserve is established for those matters for which the Corporation believes a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments. Actual losses with respect to any such matter may be more or less than the amount estimated by the Corporation. For matters where a loss is not probable, or the amount of the loss cannot be reasonably estimated by the Corporation, no loss reserve is established. In addition, from time to time, the Corporation is involved in investigations or other forms of regulatory or governmental inquiry covering a range of possible issues and, in some cases, these may be part of similar reviews of the specified activities of other companies. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the Corporation, and could result in fines, penalties, restitution, other types of sanctions, or the need for the Corporation to undertake remedial actions, or to alter its business, financial or accounting practices. The Corporation's practice is to cooperate fully with regulatory and governmental inquiries and investigations. As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, that may result from the final outcomes of pending legal proceedings, or regulatory or governmental inquiries or investigations, will not have a 133 material adverse effect on the financial condition of the Corporation. However, legal proceedings, inquiries and investigations are often unpredictable, and it is possible that the ultimate resolution of any such matters, if unfavorable, may be material to the Corporation's results of operations in any future period, depending, in part, upon the size of the loss or liability imposed and the operating results for the period, and could have a material adverse effect on the Corporation's business. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause the Corporation to incur additional expenses, which could be significant, and possibly material, to the Corporation's results of operations in any future period. NOTE 22 - CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY CONDENSED BALANCE SHEETS December 31, 2025 2024 (dollars in thousands) ASSETS Cash and cash equivalents $ 223,669 $ 78,566 Other assets 68,786 68,375 Receivable from subsidiaries 48,166 126,430 Investments in: Bank subsidiary 3,530,379 3,309,613 Non-bank subsidiaries 51,856 47,666 Total Assets $ 3,922,856 $ 3,630,650 LIABILITIES AND EQUITY Senior and subordinated debt $ 367,637 $ 367,316 Other liabilities 64,772 66,009 Total Liabilities 432,409 433,325 Shareholders' equity 3,490,447 3,197,325 Total Liabilities and Shareholders' Equity $ 3,922,856 $ 3,630,650 134 CONDENSED STATEMENTS OF INCOME 2025 2024 2023 (dollars in thousands) Income: Dividends from subsidiaries $ 300,000 $ 75,000 $ 300,000 Other 1,305 2,237 794 301,305 77,237 300,794 Expenses 47,750 42,572 37,448 Income before income taxes and equity in undistributed net income of subsidiaries 253,555 34,665 263,346 Income tax benefit ( 9,171 ) ( 9,070 ) ( 7,861 ) 262,726 43,735 271,207 Equity in undistributed net income (loss) of: Bank subsidiaries 124,949 239,677 8,932 Non-bank subsidiaries 3,934 5,331 4,141 Net Income 391,609 288,743 284,280 Preferred stock dividends ( 10,248 ) ( 10,248 ) ( 10,248 ) Net Income Available to Common Shareholders $ 381,361 $ 278,495 $ 274,032 135 CONDENSED STATEMENTS OF CASH FLOWS 2025 2024 2023 (dollars in thousands) Cash Flows From Operating Activities: Net Income $ 391,609 $ 288,743 $ 284,280 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of issuance costs and discount of long-term debt 321 710 750 Stock-based compensation 13,326 10,516 12,540 Net change in other assets 77,854 ( 83,081 ) ( 37,591 ) Equity in undistributed net (income) loss of subsidiaries ( 135,820 ) ( 245,009 ) ( 13,073 ) Net change in other liabilities and payables to non-bank subsidiaries ( 2,641 ) ( 4,504 ) ( 50,047 ) Total adjustments ( 46,960 ) ( 321,368 ) ( 87,421 ) Net cash provided by (used in) operating activities 344,649 ( 32,625 ) 196,859 Cash Flows From Investing Activities — — — Cash Flows From Financing Activities: Repayments of senior debt and subordinated debt — ( 168,778 ) ( 5,000 ) Net proceeds from issuance of common stock 7,709 270,582 3,160 Dividends paid ( 141,207 ) ( 131,698 ) ( 115,738 ) Acquisition of treasury stock ( 66,048 ) ( 30,348 ) ( 77,056 ) Net cash used in financing activities ( 199,546 ) ( 60,242 ) ( 194,634 ) Net increase (decrease) in Cash and Cash Equivalents 145,103 ( 92,867 ) 2,225 Cash and Cash Equivalents at Beginning of Year 78,566 171,433 169,208 Cash and Cash Equivalents at End of Year $ 223,669 $ 78,566 $ 171,433 136 Management Report on Internal Control Over Financial Reporting The Corporation's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Corporation's internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. Management assessed the effectiveness of the Corporation's internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this assessment, management concluded that, as of December 31, 2025, the Corporation's internal control over financial reporting is effective based on those criteria. /s/ CURTIS J. MYERS Curtis J. Myers Chairman, Chief Executive Officer and President /s/ RICHARD S. KRAEMER Richard S. Kraemer Senior Executive Vice President and Chief Financial Officer 137 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors Fulton Financial Corporation: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Fulton Financial Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting 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; (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; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 138 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of the allowance for credit losses related to loans evaluated collectively for expected credit losses As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s total allowance for credit losses on loans was $364.5 million as of December 31, 2025, a substantial portion of which related to the allowance for credit losses for loans evaluated on a collective basis. The collective ACL includes the measure of expected credit losses on a collective (pooled) basis for those loans and leases that share similar risk characteristics and uses an undiscounted approach. The Company estimates the collective ACL by applying a probability of default (PD) and loss given default (LGD) to the exposure at default (EAD) at the loan level. The PD models are econometric regression models that utilize the Company’s historical credit loss experience and incorporate a reasonable and supportable economic forecast through the use of externally developed macroeconomic scenarios. After a reasonable and supportable forecast period, the forecasted PD rates revert back to a historical average PD rate. The LGD model calculates an LGD estimate for each loan pool utilizing a loss rate approach that is based on the Company’s historical charge-off experience. The EAD calculation incorporates constant pre-payment rates, and inputs related to loan level cash flows, maturity dates, and interest rates. The constant pre-payment rates utilized in the EAD calculation are sourced from a prepayment calculation that utilizes the Company’s historical loan prepayment history to develop prepayment speeds. The collective ACL also includes qualitative reserve adjustments for factors that are not fully captured in the quantitative models. We identified the assessment of the valuation of the collective ACL as a critical audit matter. Such assessment involved significant measurement uncertainty requiring especially complex auditor judgment, and specialized skills and knowledge of the industry. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained. The assessment of the collective ACL encompassed the evaluation of the overall ACL methodology, which includes the methods and models used to estimate the PD, LGD, and EAD and their key assumptions and inputs. Key assumptions and inputs used in the estimation of the PD rate include historical default observations, the historical observation period, loan pool segmentation including the use of credit risk ratings for commercial and industrial loans, commercial mortgages and construction loans, and a reasonable and supportable economic forecast which includes reversion to historical average default rates. Key assumptions and inputs used in the estimation of the LGD rate include the loan pool segmentation, historical loss observations, and the historical observation period. Key assumptions and inputs used in the estimation of the EAD include a constant prepayment rate (CPR) and loan level cash flow adjustments. Key assumptions and inputs used in the estimation of the CPR include historical prepayment observations, interest rates, the historical observation period, and loan pool segmentation. The assessment also included an evaluation of the qualitative adjustments, including an evaluation of the methods used by management in estimating this reserve. The collective ACL estimate is sensitive to changes in the assumptions discussed above, such that changes in these assumptions can cause significant changes to the estimate. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ACL estimate, including controls over the: • development of the collective ACL methodology • development of the PD and LGD models and of the methods used to calculate the CPR and EAD • identification and determination of the key inputs and assumptions used in the PD and LGD models, and EAD calculation which included key inputs and assumptions within the pre-payment model • performance monitoring of the PD and LGD models • development of the qualitative adjustments 139 • measurement and on-going monitoring of the overall ACL estimate. We evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, assumptions, and related methodologies. In addition, we involved credit risk professionals with specialized skills and knowledge who assisted in: • evaluating the Company's collective ACL methodology for compliance with U.S. generally accepted accounting principles • evaluating the assumptions and methodologies used in developing the PD rates, LGD rates, and EAD estimate and judgments made by the Company relative to performance monitoring by inspecting management's model and methodology documentation and through comparisons against Company specific metrics, the Company's business environment, and applicable industry and regulatory practices • determining whether loans are pooled by similar risk characteristics by comparing to the Company's business environment and relevant industry practices • testing individual credit ratings for a selection of borrowers by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees and underlying collateral • 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 estimate. /s/ KPMG LLP We have served as the Company's auditor since 2002. Philadelphia, Pennsylvania February 27, 2026 140 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.