FULT · Read the filing

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion relates to the Corporation, a financial holding company registered under the BHCA and incorporated under the laws of the Commonwealth of Pennsylvania, and its wholly-owned subsidiaries. Management's Discussion should be read in conjunction with the Consolidated Financial Statements and other financial information presented in this Annual Report on Form 10-K.

OVERVIEW

The Corporation is a financial holding company, which, through its wholly-owned banking subsidiary, provides a full range of consumer and commercial financial services in Pennsylvania, Delaware, Maryland, New Jersey and Virginia.

The Corporation generates the majority of its revenue through net interest income, or the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and maintaining or increasing the NIM, which is FTE net interest income as a percentage of average interest-earning assets. The Corporation also generates revenue through fees earned on the various services and products offered to its customers and through gains on sales of assets, such as loans, investments and properties. Offsetting these revenue sources are provisions for credit losses on loans and OBS credit risks, non-interest expenses and income taxes.

Merger

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.

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.

The following table presents a summary of the Corporation's earnings and selected performance ratios:

(dollars in thousands, except per share)

Operating return on average assets(1) 1.28 % 1.11 % 1.08 %

Return on average common shareholders' equity 12.09 % 9.83 % 11.24 %

Non-performing assets to total assets 0.58 % 0.69 % 0.56 %

Net charge-offs to average loans, annualized 0.21 % 0.19 % 0.14 %

(1)Represents a financial measure derived by methods other than GAAP. See reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure under the "Supplemental Reporting of Non-GAAP Based Financial Measures" section of Management's Discussion.

(2)Presented on a FTE basis using a 21% federal tax rate and statutory interest expense disallowances.

Financial Highlights

Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was $381.4 million for the year ended December 31, 2025, a $102.9 million increase compared to $278.5 million in 2024. Net income available to common shareholders per diluted share was $2.08 for the year ended December 31, 2025, a $0.51 increase compared to $1.57 in 2024.

Year Ended December 31, 2025 Results were Impacted by the Following Items:

•NIM of 3.51%, a nine bps increase compared to 3.42% in 2024.

•Net interest income of $1.0 billion, a $76.0 million increase compared to $960.3 million in 2024.

•Provision for credit losses of $35.7 million resulting in an ACL attributable to net loans of $364.5 million, or 1.51% of total net loans as of December 31, 2025.

•Non-interest income of $276.8 million, a $1.0 million increase compared to $275.7 million in 2024.

•Non-interest expense of $791.8 million, a $28.0 million decrease compared to $819.8 million in 2024.

•During the year ended December 31, 2025, 3.3 million shares of the Corporation's common stock were repurchased at a total cost of $59.7 million, or $18.16 per share, under the 2025 Repurchase Program.

Supplemental Reporting of Non-GAAP Based Financial Measures

This Annual Report on Form 10-K contains supplemental financial information, as detailed below, that has been derived by methods other than GAAP. The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its Consolidated Financial Statements in their entirety.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:

(dollars in thousands, except per share data)

Operating net income available to common shareholders

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

Plus: Loss on securities restructuring — 20,282 —

Plus: Acquisition-related expense 1,182 37,635 —

Plus: CECL Day 1 Provision — 23,444 —

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

Plus: FultonFirst implementation and asset disposals 2,271 32,038 3,197

(dollars in thousands)

Operating return on average assets

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

Plus: Loss on securities restructuring — 20,282 —

Plus: Acquisition-related expense 1,182 37,635 —

Plus: CECL Day 1 Provision — 23,444 —

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

Plus: FultonFirst implementation and asset disposals 2,271 32,038 3,197

Operating return on average assets 1.28 % 1.11 % 1.08 %

(dollars in thousands)

Operating return on average common shareholders' equity (tangible)

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

Plus: Loss on securities restructuring — 20,282 —

Plus: Acquisition-related expense 1,182 37,635 —

Plus: CECL Day 1 Provision — 23,444 —

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

Plus: FultonFirst implementation and asset disposals 2,271 32,038 3,197

(dollars in thousands)

Efficiency ratio

Less: Acquisition-related expense (1,182) (37,635) —

Less: Debt extinguishment gain (cost) — — 720

Less: FDIC special assessment 95 (940) (6,494)

Less: Gain on Sale-Leaseback Transaction — 20,266 —

Less: FultonFirst implementation and asset disposals (2,271) (32,038) (3,197)

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

Plus: Investment securities losses (gains), net 2 20,283 733

CRITICAL ACCOUNTING POLICIES

The Corporation's accounting policies are fundamental to understanding Management’s Discussion. Critical accounting policies are those that the Corporation considers to be most important to the presentation of its financial condition and results of operations, because they require management's most difficult judgments as a result of the need to make estimates about the effects of matters that are inherently uncertain. The following is a summary of those accounting policies that the Corporation considers to be most important to the presentation of its financial condition and results of operations.

See additional information regarding these critical accounting policies in "Note 1 - Summary of Significant Accounting Policies," in the Notes to the Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data."

Allowance for Credit Losses - The ACL is based on estimated losses over the remaining expected life of loans. Management's determination of the appropriateness of the reserve is based on periodic evaluations of the loan portfolio, lending-related commitments, current and forecasted economic factors and other relevant factors.

Loans Evaluated Collectively: Loans evaluated collectively for expected credit losses include all 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. These forecasts are based on the projected performance of specific economic variables 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.

The ACL for loans was $364.5 million and $379.2 million on December 31, 2025 and December 31, 2024, respectively.

The Corporation performs loan loss sensitivity analysis on a quarterly basis to determine the impact of varying economic conditions based on third-party forecasts. Our sensitivity analysis does not represent management's view of expected credit losses at the balance sheet date. One scenario identified includes a highly adverse economic environment. This scenario resulted in a hypothetical increase to the ACL of approximately $35.5 million.

For further discussion of the methodology used in the determination of the ACL, refer to Note 1, "Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data."

Income Taxes - Income tax expense is based upon income before taxes, adjusted for the effect of certain tax-exempt income, non-deductible expenses and credits. In addition, certain items of income and expense are reported in different periods for financial reporting and tax return purposes. The tax effects of these temporary differences are recognized currently in the deferred income tax provision or benefit. DTAs or deferred tax liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the applicable enacted marginal tax rate.

The Corporation must also evaluate the likelihood that DTAs will be recovered through future taxable income. If any such assets are determined to be more likely than not unrecoverable, then a valuation allowance must be recognized. The assessment of the carrying value of DTAs is based on certain assumptions, the changes of which could have a material impact on the Corporation's Consolidated Financial Statements.

On a periodic basis, the Corporation evaluates its income tax expense based on tax laws, regulations and financial reporting considerations and records adjustments as appropriate. Recognition and measurement of tax positions is based upon management's evaluations of current taxing authorities' examinations of the Corporation's tax returns, recent positions taken by the taxing authorities on similar transactions and the overall tax environment.

Income tax expense was $94.0 million and $55.9 million for the years ended December 31, 2025 and 2024, respectively.

Recently Issued Accounting Standards

For a description of accounting standards recently issued, but not yet adopted by the Corporation, see "Recently Issued Accounting Standards," in "Note 1 - Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data."

RESULTS OF OPERATIONS

Net Interest Income

FTE net interest income was $1.1 billion for the year ended December 31, 2025, an increase of $75.8 million, compared to $978.2 million for the same period in 2024. For the years ended December 31, 2025 and December 31, 2024, NIM was 3.51% and 3.42%, respectively. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item "7A. Quantitative and Qualitative Disclosures About Market Risk." The following table provides a comparative average balance sheet and net interest income analysis for 2025 compared to 2024 and 2023. Interest income and yields are presented on an FTE basis using a 21% federal tax rate as well as statutory interest expense disallowances. The discussion following this table is based on these tax-equivalent amounts.

(dollars in thousands)

ASSETS

Interest-earning assets:

Noninterest-earning assets:

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Noninterest-bearing liabilities:

(1) Average balances include non-performing loans and loan fees.

(2) Average balances include amortized historical cost for AFS investment securities; the related unrealized holding gains (losses) are included in other assets.

(3) ACL - loans relates to the ACL specifically for net loans and does not include the ACL for OBS credit exposures, which is included in other liabilities.

Comparison of 2025 to 2024

The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances (volumes) and changes in yields and rates:

2025 versus 2024Increase (decrease) due to change in

Volume Yield/Rate Net

(dollars in thousands)

FTE interest income on:

Interest expense on:

Borrowings and other interest-bearing liabilities (27,951) (6,227) (34,178)

(1) Average balance includes non-performing loans and loan fees.

Compared to 2024, FTE total interest income for 2025increased $34.4 million due to an increase of $66.5 million attributable to changes in volume, partially offset by a decrease of $32.1 million attributable to changes in yield. The increase due to changes in volume was due to an increase in average net loans and average investment securities. The decrease due to changes in yield was largely due to a decrease in the yield on average net loans, partially offset by an increase in the yield on average investment securities.

The yield on average interest-earning assets decreased 15 bps in 2025 compared to 2024.

In 2025, total interest expense decreased $41.3 million compared to 2024, driven by a decrease in rate on interest-bearing liabilities resulting in a $53.0 million decrease in interest expense, partially offset by an increase in average interest-bearing liabilities resulting in a $11.6 million increase in interest expense. The decrease in interest expense attributable to rate was driven by decreases in the rate on average time deposits, average savings and money market deposits, average brokered deposits, average borrowings and other interest-bearing liabilities and average interest-bearing demand deposits. The increase in interest expense attributable to volume was primarily driven by increases in average savings and money market deposits, average interest-bearing demand deposits and average time deposits, partially offset by a decrease in average borrowings and other interest-bearing liabilities and average brokered deposits.

The rate on average interest-bearing liabilities decreased 33 bps in 2025 compared to 2024.

Average loans and average FTE yields, by type, are summarized in the following table:

Balance Yield Balance Yield $ %

(dollars in thousands)

(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.

During 2025, average net loans increased $850.1 million, or 3.7%, compared to 2024. The increase in average net loans was driven by the full-year impact of loans acquired in the Republic First Transaction.

The yield on total loans decreased 21 bps to 5.87% in 2025 compared to 6.08% in 2024.

Average deposits and interest rates, by type, are summarized in the following table:

Balance Rate Balance Rate $ %

(dollars in thousands)

The cost of total deposits decreased 17 bps to 1.96% in 2025 compared to 2.13% in 2024, primarily due to declining interest rates and a change in mix of deposits. Average deposits increased $1.7 billion, or 7.1%, compared to 2024. The increase in average deposits was driven by the full-year impact of deposits acquired in the Republic First Transaction.

Average borrowings and other interest-bearing liabilities and interest rates, by type, are summarized in the following table:

Balance Rate Balance Rate $ %

(dollars in thousands)

(1) Includes repurchase agreements, short-term promissory notes, capital leases and collateral liabilities.

Average borrowings and other interest-bearing liabilities decreased $676.1 million, or 29.6% compared to 2024.

Provision for Credit Losses

The provision for credit losses was $35.7 million in 2025 compared to $71.6 million in 2024. The decrease was primarily due to the Republic First Transaction in 2024, which included a provision for credit losses of $23.4 million for non-PCD Loans.

Non-Interest Income

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

Increase (Decrease)

(dollars in thousands)

Commercial banking:

Consumer banking:

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

Investment securities (losses) gains, net (2) (20,283) 20,281 N/M

Non-interest income before investment securities losses and gain on acquisition, net of tax increased $17.8 million, or 6.9%, during 2025 compared to 2024. The increase of $17.8 million included a $5.8 million increase in wealth management revenues due to an increase in assets under management, a $4.8 million increase in cash management fee income due to an increase in account analysis fees as commercial customers moved funds to interest-bearing deposit accounts, a $3.5 million increase in income from equity method investments, reflected in other non-interest income, a $1.6 million increase in consumer banking overdraft fees, a $1.2 million increase in debit card fee income and a $1.1 million increase in commercial customer derivative fee income, reflected in capital markets.

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.

Non-Interest Expense

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

Increase (Decrease)

(dollars in thousands)

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

Non-interest expense in 2025 decreased $28.0 million, or 3.4%, compared to 2024. Excluding the gain on the Sale-Leaseback Transaction, acquisition-related expenses and FultonFirst implementation and asset disposal costs, non-interest expense increased $18.0 million, or 2.3%, in 2025 compared to 2024. The increase in non-interest expense excluding gain on the Sale-Leaseback Transaction, acquisition-related expenses and FultonFirst implementation and asset disposal costs, was primarily due to an$18.0 million increase in salaries and employee benefits expense, driven by higher incentive compensation expense, annual merit increases and lower deferred costs from loan origination activities, and a $4.6 million increase in intangible amortization expense due to amortization of CDI from the Republic First Transaction, partially offset by a decrease of $5.4 million in professional fees largely due to a recovery of previously incurred fees in the first quarter of 2025.

Income Taxes

Income tax expense for 2025 was $94.0 million, a $38.1 million increase compared to 2024. The Corporation's ETR was 19.4% in 2025 compared to 16.2% in 2024. Excluding the impact from the $37.0 million gain on acquisition, net of tax, the Corporation's ETR in 2024 was 18.2%. The increase in income tax expense in 2025 was primarily due to higher taxable income. The ETR is generally lower than the federal statutory rate of 21% due to tax-exempt interest income earned on loans, investments in tax-free municipal securities and TCIs that generate tax credits under various federal programs.

Comparison of 2024 to 2023

The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances (volumes) and changes in yields and rates:

Increase (decrease) due to change in

Volume Yield/Rate Net

(dollars in thousands)

FTE interest income on:

Interest expense on:

Borrowings and other interest-bearing liabilities (22,532) (4,202) (26,734)

(1) Average balance includes non-performing loans and loan fees.

Note: Changes which are partially attributable to both volume and rate are allocated to the volume and rate components presented above based on the percentage of direct changes that are attributable to each component.

Compared to 2023, FTE total interest income for 2024 increased $309.1 million due to increases of $144.0 million attributable to changes in yield and $165.0 million attributable to changes in volume. The increase due to changes in yield was largely due to an increase in net loans. The increase due to changes in volume was due to an increase in average net loans.

The yield on average interest-earning assets increased 54 bps in 2024 compared to 2023.

In 2024, interest expense increased $202.9 million compared to 2023, primarily driven by an increase in rate on interest-bearing liabilities resulting in a $124.5 million increase in interest expense. The increase in interest expense attributable to rate was driven by increases in interest-bearing demand deposits, savings and money market deposits and time deposits. The increase in interest expense attributable to volume was $78.4 million primarily driven by increases in time deposits, interest-bearing demand deposits and savings and money market deposits, partially offset by a decrease in borrowings and other interest-bearing liabilities.

The rate on average interest-bearing liabilities increased 58 bps in 2024 compared to 2023.

Average loans and average FTE yields, by type, are summarized in the following table:

Balance Yield Balance Yield $ %

(dollars in thousands)

(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.

During 2024, average net loans increased $2.2 billion, or 10.6%, compared to 2023. The increase in average net loans was primarily due to approximately $2.4 billion of total loans acquired in the Republic First Transaction and outstanding as of December 31, 2024. The yield on total loans increased 51 bps to 6.08% in 2024 compared to 5.57% in 2023.

Average deposits and interest rates, by type, are summarized in the following table:

Balance Rate Balance Rate $ %

(dollars in thousands)

The cost of total deposits increased 75 bps to 2.13% in 2024 compared to 1.38% in 2023, primarily due to rising interest rates and a change in mix of deposits. Average deposits increased $3.4 billion, or 16.0%, compared to 2023. The increase in average total deposits was primarily due to approximately $3.7 billion of total deposits assumed in the Republic First Transaction and outstanding as of December 31, 2024.

Average borrowings and other interest-bearing liabilities and interest rates, by type, are summarized in the following table:

Balance Rate Balance Rate $ %

(dollars in thousands)

(1) Includes repurchase agreements, short-term promissory notes, capital leases and collateral liabilities.

Average borrowings and other interest-bearing liabilities decreased $490.9 million during 2024 compared to 2023.

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

See "Note 10 - Borrowings" of the Notes to Consolidated Financial Statements for additional details.

Provision for Credit Losses

The provision for credit losses was $71.6 million in 2024 compared to $54.0 million in 2023. The increase was primarily due to the Republic First Transaction, which included a provision for credit losses of $23.4 million for non-PCD Loans, partially offset by an elevated level of provision for credit losses in the same period in 2023 due to a $13.3 million charge-off for a commercial office loan.

Non-Interest Income

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

Increase (Decrease)

(dollars in thousands)

Commercial banking:

Consumer banking:

Gain on acquisition, net of tax 36,996 — 36,996 N/M

Investment securities (losses) gains, net (20,283) (733) (19,550) N/M

Non-interest income before investment securities losses and gain on acquisition, net of tax increased $30.6 million, or 13.4%, during 2024 compared to 2023. The increase in non-interest income was partially due to $7.7 million from acquired operations in the Republic First Transaction. The remaining increase of $22.9 million included a $9.2 million increase in wealth management revenues due to an increase in assets under management, a $4.8 million increase in cash management fee income due to an increase in account analysis fees with customers electing to move funds to interest-bearing deposit accounts, a $3.6 million increase in mortgage banking income primarily due to higher loan volumes and spreads, a $1.8 million increase in SBA income largely due to higher loan sale volumes, a $1.6 million increase in income from bank owned life insurance and a $1.7 million increase in debit card fee income.

Non-Interest Expense

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

Increase (Decrease)

(dollars in thousands)

Non-interest expense in 2024 increased $140.6 million, or 20.7%, compared to 2023. Excluding the gain on the Sale-Leaseback Transaction, acquisition-related expenses and FultonFirst implementation and asset disposal costs, non-interest expense increased $94.4 million, or 14.0%, in 2024 compared to 2023. The increase in non-interest expense was primarily due to $71.9 million from acquired operations in the Republic First Transaction, including $15.7 million of CDI amortization expense, and $21.5 million in salaries and benefits expense driven by annual merit increases, higher incentive compensation expense and lower deferred costs from loan origination activities.

Income Taxes

Income tax expense for 2024 was $55.9 million, an $8.6 million decrease compared to 2023. The Corporation's ETR was 16.2% in 2024. Excluding the impact from the $37.0 million gain on acquisition, net of tax, the Corporation's ETR was 18.2% compared to 18.5% in 2023. The decrease in income tax expense in 2024 resulted primarily from the lower ETR. The ETR is generally lower than the federal statutory rate of 21% due to tax-exempt interest income earned on loans, investments in tax-free municipal securities and TCIs that generate tax credits under various federal programs.

FINANCIAL CONDITION

The table below presents condensed consolidated ending balance sheets:

December 31, Increase (Decrease)

(dollars in thousands)

Assets

Liabilities and Shareholders' Equity

Investment Securities

The table below presents the carrying amount of investment securities:

December 31, Increase (Decrease)

(dollars in thousands)

Available for Sale

Held to Maturity

Compared to December 31, 2024, total AFS investment securities at December 31, 2025 decreased $3.0 million, or 0.1%. The decrease in AFS investment securities at December 31, 2025 compared to December 31, 2024 was due to decreases of $223.2 million in residential mortgage-backed securities and $85.4 million in corporate debt securities, partially offset by increases of $251.2 million in collateralized mortgage obligations, $42.6 million in commercial mortgage-backed securities and $11.8 million in state and municipal securities.

Compared to December 31, 2024, total HTM investment securities at December 31, 2025 increased $30.3 million, or 2.2%. The increase in HTM investment securities at December 31, 2025 compared to December 31, 2024 was primarily driven by an increase in residential mortgage-backed securities of $35.8 million.

Loans

The following table presents ending net loans outstanding, by type:

December 31, Increase (Decrease)

(dollars in thousands)

(1) Includes unearned income of $36.8 million and $35.6 million as of December 31, 2025 and 2024, respectively.

During 2025, net loans increased $100.0 million, or 0.4%, compared to December 31, 2024. The increase in net loans during 2025 was primarily due to increases in residential mortgage loans and commercial mortgage loans of $320.4 million and $219.1 million, respectively, partially offset by a decrease in construction loans of $424.6 million.

The Corporation does not have a significant concentration of credit risk with any single borrower. As of December 31, 2025, approximately $10.8 billion, or 44.7%, of the loan portfolio was comprised of commercial mortgage loans and construction loans.

The Corporation has established lower total lending limits for certain types of commercial lending commitments and lower total lending limits based on the Corporation's internal risk rating of an individual borrower at the time the lending commitment is approved. The Corporation adheres to loan portfolio management practices, which include requiring an annual review of themajority of commercial loans. Additionally, management monitors the loan portfolio throughout the year taking into account, among other things, the size, complexity and risk of loans and individual borrowers. An independent loan review function assesses the portfolio for internal risk rating accuracy and loan servicing policy requirements. The Corporation consolidates risk migrations to identify emerging risks by industry and real estate property types, taking into consideration economic forecasts and industry trends. The Corporation takes a risk-based approach when reviewing a specific loan portfolio, such as the commercial office loan portfolio or multi-family loan portfolio. The Corporation reviews portfolio concentrations and adjusts the lending limits based on asset quality, economic forecasts and industry outlook.

The following table summarizes the industry concentrations within the commercial mortgage and the commercial and industrial loan portfolios:

December 31,

Manufacturing 7.0 5.1

Other services 4.5 5.3

Wholesale trade 4.2 3.4

Hospitality and food services 3.9 4.0

Educational services 3.0 3.0

Professional, scientific and technical services 2.6 2.7

Arts, entertainment and recreation 2.4 2.4

Finance and insurance 1.4 1.6

Public administration 1.3 1.3

Transportation and warehousing 1.3 1.5

Administrative and Support 1.0 1.2

(1) Includes commercial loans to borrowers engaged in the business of: renting, leasing or managing real estate for others, selling and/or buying real estate for

others and appraising real estate.

(2) Includes commercial loans to borrowers engaged in the construction industry.

The commercial mortgage loan portfolio consists of 45.0% owner occupied commercial mortgage loans and 55.0% non-owner occupied commercial mortgage loans as of December 31, 2025. The following table summarizes the non-owner occupied commercial mortgage loan portfolio outstanding balance and the percent to total net loans.

$ % of Total Net Loans $ % of Total Net Loans

(dollars in thousands)

The following table summarizes the commercial mortgage office non-owner occupied loan portfolio outstanding balance, total commitment and LTV ratio by Metropolitan Statistical Area:

(dollars in thousands)

(1)Weighted average LTV as of origination.

(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD.

(3) Washington-Arlington-Alexandria, DC-VA-MD-WV.

(4) Baltimore-Columbia-Towson, MD.

(5) New York-Newark-Jersey City, NY-NJ-PA.

The non-owner occupied commercial mortgage office loan portfolio table above excludes commercial construction loans secured by office property collateral with no total outstanding balance and total outstanding loan commitments of $1.1 million as of December 31, 2025.

The following table summarizes the non-owner occupied commercial mortgage multi-family loan portfolio outstanding balance, total commitment and LTV ratio by Metropolitan Statistical Area:

(dollars in thousands)

(1)Weighted average LTV as of origination.

(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD.

(3) New York-Newark-Jersey City, NY-NJ-PA.

(4) Baltimore-Columbia-Towson, MD.

(5) Washington-Arlington-Alexandria, DC-VA-MD-WV.

The non-owner occupied commercial mortgage multi-family loan portfolio table above excludes commercial construction loans secured by multi-family property collateral with a total outstanding loan balance of $196.5 million and outstanding loan commitments of $388.6 million as of December 31, 2025.

The following table presents the changes in non-accrual loans for the years ended December 31:

(dollars in thousands)

During 2025, non-accrual loans decreased $35.4 million, or 18.7%, largely due to payments and charge-offs, partially offset by additions to non-accrual loans. During 2025, non-accrual loans as a percentage of net loans decreased to 0.64% compared to 0.79% as of December 31, 2024.

The following table presents non-performing assets:

December 31,

(dollars in thousands)

Non-accrual loans to total loans 0.64 % 0.79 % 0.57 %

Non-performing loans to total loans 0.76 % 0.92 % 0.72 %

Non-performing assets to total assets 0.58 % 0.69 % 0.56 %

(1) The amount of interest income on non-accrual loans that was recognized in 2025, 2024 and 2023 was approximately $2.8 million, $1.0 million and

$1.5 million in income, respectively.

(2) Accrual of interest is generally discontinued when a loan becomes 90 days past due. 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 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 to be adequately secured and in the process of collection. Certain loans, primarily adequately collateralized residential

mortgage loans, may continue to accrue interest after reaching 90 days past due.

(3) Excludes $19.1 million, $17.5 million and $10.9 million of residential mortgage properties for which formal foreclosure proceedings were in process as of

December 31, 2025, 2024 and 2023, respectively.

The following table presents non-performing loans:

December 31,

(dollars in thousands)

Non-performing loans to total loans 0.76 % 0.92 % 0.72 %

The following table presents the amortized cost basis of loans modified to borrowers experiencing financial difficulty:

December 31,

(dollars in thousands)

Real estate - commercial mortgage $ 81,548 $ 20,501

Real estate - residential mortgage 8,828 13,969

Real estate - home equity 372 379

The following table summarizes OREO, by property type:

December 31,

(dollars in thousands)

Undeveloped land — — 502

The Corporation's ability to identify potential problem loans in a timely manner is important to maintaining an adequate ACL. For commercial and industrial loans, commercial mortgage loans, construction loans to commercial borrowers and leases and other loans, an internal risk rating process is used to monitor credit quality. The evaluation of credit risk for residential mortgages, home equity loans, construction loans to individuals and consumer loans is based on payment history through the monitoring of delinquency levels and trends.

Total internally risk-rated loans were $15.4 billion as of December 31, 2025 and 2024, of which $1.5 billion and $1.8 billion were criticized and classified loans, respectively. The following table presents criticized and classified loans, or those with internal risk ratings of special mention or substandard or lower for commercial mortgages, commercial and industrial loans, construction loans to commercial borrowers and leases and other loans by class segment:

December 31, December 31, December 31,

(dollars in thousands)

(1) Considered "criticized" loans by banking regulators.

(2) Considered "classified" loans by banking regulators.

(3) Excludes non-commercial real estate - construction.

Total criticized and classified loans decreased $378.9 million, or 20.6%, compared to December 31, 2024.

Special mention loans decreased $265.0 million as of December 31, 2025 compared to December 31, 2024. Substandard or lower loans decreased $113.9 million as of December 31, 2025 compared to December 31, 2024.

The decrease in total criticized and classified loans was primarily driven by loan sales, repayments and risk rating upgrades.

The following table presents, by class segment, a summary of delinquency status and rates, as a percentage of loans in each portfolio and in total, that do not have internal risk ratings:

Delinquent(1) Non-performing(2) Total

December 31, December 31, December 31, December 31, December 31, December 31,

$ % $ % $ % $ % $ % $ %

(dollars in thousands)

(1) Includes accruing loans 30 days to 89 days past due.

(2) Includes accruing loans 90 days or more past due and non-accrual loans and leases.

Allowance for Credit Losses

The Corporation accounts for the credit risk associated with lending activities through the ACL and the provision for credit losses.

The following table presents the activity in the ACL:

December 31, December 31, December 31,

(dollars in thousands)

Initial PCD allowance for credit losses — 54,631 —

Loans charged off:

Real estate - residential mortgage (1,053) (1,472) (62)

Consumer and real estate - home equity (8,817) (8,490) (7,514)

Real estate - construction (5,386) — —

Recoveries of loans previously charged off:

Real estate - residential mortgage 640 472 421

Provision for OBS credit exposures(1) $ 811 $ (3,930) $ 926

Selected Asset Quality Ratios %:

Net charge-offs to average loans 0.21 % 0.19 % 0.14 %

Non-performing assets(4) to total assets 0.58 0.69 0.56

Non-accrual loans to total net loans 0.64 0.79 0.57

ACL - loans to non-performing loans 198 172 191

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

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

(3) Reserve for OBS credit exposures is recorded within other liabilities on the Consolidated Balance Sheets.

(4)Includes accruing loans past due 90 days or more.

The provision for credit losses for 2025 was $35.7 millioncompared to a provision for credit losses of $71.6 million in 2024. The decrease in the provision for credit losses was primarily driven by a $23.4 million CECL Day 1 Provision related to the Republic First Transaction in 2024. Additionally, included in the ACL as of December 31, 2024 was $54.6 million recorded for PCD Loans acquired in the Republic First Transaction.

The ACL includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the quantitative models. See "Note 5 - Loans and Allowance for Credit Losses" of the Notes to Consolidated Financial Statements in Part I, "Item 8. Financial Statements" for additional details.

The following table summarizes the allocation of the ACL - loans:

(dollars in thousands)

(1)Ending ACL - loan portfolio segment balance as a percentage of total ACL - loans.

(2)Ending loan portfolio segment balances as a percentage of total net loans for the periods presented.

Management believes that the $364.5 million ACL - loans as of December 31, 2025 is sufficient to cover expected credit losses in the loan portfolio.

Deposits and Borrowings

The following table presents ending deposits, by type:

December 31, Increase (Decrease)

(dollars in thousands)

During 2025, total deposits increased by $460.0 million, or 1.8%, compared to December 31, 2024. The increase in total deposits was primarily due to increases in savings and money market deposits and interest-bearing demand deposits of $720.7 million and $126.6 million respectively, partially offset by decreases in noninterest-bearing demand deposits and time deposits of $243.7 million and $154.8 million, respectively.

Total uninsured deposits (excluding intra-Company deposits) were estimated to be $9.7 billion and $9.4 billion at December 31, 2025 and December 31, 2024, respectively.

The following table presents ending borrowings, by type:

December 31, Increase (Decrease)

(dollars in thousands)

(1)Includes repurchase agreements, short-term promissory notes and capital leases.

During 2025, total borrowings decreased $484.7 million, or 27.2%, compared to December 31, 2024. The decrease in total borrowings was primarily due to a decrease in FHLB advances of $600.0 million, partially offset by increases in other borrowings of $115.0 million.

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

See "Note 10 - Borrowings" in the Notes to the Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" for details of borrowings.

Other Liabilities

During 2025, other liabilities decreased $221.8 million, or 23.0%, compared to December 31, 2024, primarily due to decreases in derivative-related liabilities, accrued taxes and other accrued expenses and payables.

Shareholders' Equity

During 2025, total shareholders' equity increased $293.1 million, or 9.2%, to $3.5 billion, or 10.9% of total assets, as of December 31, 2025. The increase in total shareholders' equity was largely due to a $249.0 million increase in retained earnings primarily from $391.6 million of net income for the year, partially offset by $142.6 million of dividends declared. See "Note 15 - Shareholders' Equity" in the Notes to the Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" for details of accumulated comprehensive loss.

Regulatory Capital

The Corporation and its wholly-owned subsidiary bank, Fulton Bank, are subject to the Capital Rules administered by banking regulators. Failure to meet minimum capital requirements can trigger certain actions by regulators that could have a material effect on the Corporation's financial statements.

The Capital Rules require the Corporation and Fulton Bank to:

•Meet a minimum CET1 capital ratio of 4.50% of risk-weighted assets;

•Meet a minimum Tier 1 Leverage capital ratio of 4.00% of average assets;

•Meet a minimum Total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 capital ratio of 6.00% of risk-weighted 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.

As of December 31, 2025, the Corporation's capital levels met the minimum capital requirements, including the capital conservation buffers, as prescribed in the Capital Rules.

As of December 31, 2025, Fulton Bank met the well-capitalized requirements under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, a bank must maintain minimum Total risk-based, Tier I risk-based, CET1 risk-based and Tier I leverage ratios as set forth in the Capital Rules. There were no other conditions or events in 2025 that management believes have changed the Corporation's capital categories.

The following table summarizes the Corporation's capital ratios in comparison to regulatory requirements:

Total Risk-Based Capital (to Risk-Weighted Assets) 15.2% 14.3% 8.0% 10.5%

Tier I Risk-Based Capital (to Risk-Weighted Assets) 11.8% 11.5% 6.0% 8.5%

Tier I Leverage Capital (to Average Assets) 9.7% 9.0% 4.0% 4.0%

Contractual Obligations and Off-Balance Sheet Arrangements

The Corporation has various financial obligations that require future cash payments. These obligations include payments for liabilities recorded on the Corporation's Consolidated Balance Sheets as well as contractual obligations for purchased services.

Contractual purchase obligations to third parties that were fixed and determinable of approximately $55.6 million and $72.4 million at December 31, 2025 and 2024, respectively, include information technology, telecommunication and data processing outsourcing contracts. The decrease is primarily due to contract changes to annual renewals.

The following table summarizes the contractual purchase obligations for each of the next five years (dollars in thousands):

Year

The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit, which involve, to varying degrees, elements of credit and interest rate risk that are not recognized on the Consolidated Balance Sheets. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments issued to guarantee the financial or performance obligation of a customer to a third party. Commercial letters of credit are conditional commitments issued to facilitate foreign or domestic trade transactions for customers. Commitments and standby and commercial letters of credit do not necessarily represent future cash needs, as they may expire without being drawn.

The following table presents the Corporation's commitments to extend credit and letters of credit as of December 31, 2025 (dollars in thousands):

Commercial and industrial $ 4,975,873

Real estate - commercial mortgage and real estate - construction 1,477,796

Total commitments to extend credit $ 8,710,163

Standby letters of credit $ 311,697

Commercial letters of credit 29,842

Total letters of credit $ 341,539

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the exposure to economic loss that arises from changes in the values of certain financial instruments. The types of market risk exposures generally faced by financial institutions include interest rate risk, equity market price risk, debt security market price risk, foreign currency price risk and commodity price risk. Due to the nature of its operations, foreign currency price risk and commodity price risk are not significant to the Corporation.

Interest Rate Risk, Asset/Liability Management and Liquidity

Interest rate risk creates exposure in two primary areas. First, changes in rates have an impact on the Corporation's liquidity position and could affect its ability to meet obligations and continue to grow. Second, movements in interest rates can create fluctuations in the Corporation's net interest income and changes in the economic value of its equity.

The Corporation employs various management techniques to minimize its exposure to interest rate risk. The Corporation's ALCO is responsible for reviewing the interest rate sensitivity and liquidity positions of the Corporation, approving asset and liability management policies, and overseeing the formulation and implementation of strategies regarding balance sheet positions.

The Corporation uses two complementary methods to measure and manage interest rate risk: simulation of net interest income and estimates of economic value of equity. Using these measurements in tandem provides a reasonably comprehensive summary of the magnitude of the Corporation's interest rate risk, level of risk as time evolves, and exposure to changes in interest rates.

Net interest income simulation is performed for the following 12-month period using various interest rate scenarios. These scenarios measure the effects of sudden and gradual parallel movements upward and downward in the yield curve and are compared to results under a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to assess the Corporation's short-term earnings exposure to rate movements.

During the first quarter of 2025, the Corporation revised its policy to measure its interest rate risk profile using parallel instantaneous shocks, rather than non-parallel instantaneous shocks. Under the revised policy, the potential exposure of net interest income, under a parallel instantaneous shock, is limited to:

•10% of base-case net interest income for a 100 bps shock,

•15% for a 200 bps shock,

•20% for a 300 bps shock, and

•25% for a 400 bps shock.

A "shock" is an immediate upward or downward movement of interest rates. These shocks do not incorporate potential changes in customer behavior that could result in changes to mix and/or volumes in the balance sheet, nor do they consider the potential effects of competition on the pricing of deposits and loans over the forward 12-month period. Rate shocks resulting in negative interest rates that have been deemed impractical are omitted from presentation.

The simulation model incorporates contractual maturities and repricing opportunities for loans as well as prepayment assumptions, maturity data and call options embedded in the investment portfolio. Assumptions for non-maturity deposit accounts based on historical experience are incorporated into the model. The assumptions used are inherently uncertain and, as a result, the model cannot precisely predict future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model's simulated results due to timing, amount and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.

The following table summarizes the expected impact of interest rate changes in rate-ramp scenarios over a 12-month period, that is, a gradual parallel shift, on net interest income as of December 31, 2025:

Rate Ramp(1) Annual changein net interest income % change in net interest income

(1) Results include the effect of implicit and explicit interest rate floors that limit further reduction in interest rates.

The following table summarizes the expected impact of abrupt interest rate changes, that is a parallel instantaneous shock, on net interest income as of December 31, 2025:

(1) Results include the effect of implicit and explicit interest rate floors that limit further reduction in interest rates.

The economic value of equity analysis estimates the discounted present value of asset and liability cash flows, using discount rates derived from market pricing for like assets and liabilities. Abrupt changes or "shocks" in interest rates, both upward and downward, are applied to evaluate the comparative effect of such interest rate movements relative to the unchanged environment. This measurement tool is used primarily to evaluate the longer-term repricing risks and options in the Corporation's Consolidated Balance Sheets. The Corporation's policy limits the economic value of equity that may be at risk, in a parallel instantaneous shock, to:

•10% of the base-case economic value of equity for a 100 bps shock,

•20% for a 200 bps shock,

•30% for a 300 bps shock, and

•40% for a 400 bps shock.

As of December 31, 2025, the Corporation was within economic value of equity policy limits for every 100 bps parallel instantaneous shock presented.

Interest Rate Derivatives

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. These interest rate derivatives are derivative financial instruments, and the gross fair values are recorded in other assets and liabilities on the Consolidated Balance Sheets.

Cash Flow Hedges

The Corporation's objectives in using interest rate derivatives are to reduce volatility in net interest income and net 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 cash flows associated with existing loans and borrowings.

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 AOCI and subsequently reclassified into interest income or interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income or interest expense as interest payments are made on the Corporation's loans or borrowings.

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.

Liquidity

The Corporation must maintain a sufficient level of liquid assets to meet the cash needs of its customers, who, as depositors, may want to withdraw funds or who, as borrowers, need credit availability. Liquidity is provided on a continuous basis through scheduled and unscheduled principal and interest payments on investments and outstanding loans and through the availability of deposits and borrowings. The Corporation also maintains secondary sources that provide liquidity on a secured and unsecured basis to meet short- and long-term needs.

The Corporation maintains liquidity sources in the form of interest-bearing deposits and customer funding (short-term promissory notes). The Corporation can access additional liquidity from these sources, if necessary, by increasing the rates of interest paid on those instruments. The positive impact to liquidity resulting from paying higher interest rates could have a detrimental impact on NIM and net interest income if rates on interest-earning assets do not experience a proportionate increase. Borrowing availability with the FHLB and the FRB, along with federal funds lines at various correspondent banks, provides the Corporation with additional liquidity.

Fulton Bank is a member of the FHLB and has access to FHLB overnight and term credit facilities. As of December 31, 2025, the Bank had total borrowing capacity of approximately $11.6 billion with $4.5 billion of advances and letters of credit outstanding, for a remaining available 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.

As of December 31, 2025, the Corporation had aggregate federal funds lines borrowing capacity of $2.6 billion with no amount outstanding against that amount. As of December 31, 2025, the Corporation had $3.9 billion of collateralized borrowing capacity at the FRB discount window with no amount outstanding against this amount.

A combination of commercial real estate loans, commercial loans, consumer loans and securities are pledged to the FRB of Philadelphia to provide access to FRB discount window borrowings. Securities carried at $0.4 billion at December 31, 2025 and $0.3 billion at December 31, 2024 were pledged as collateral to secure public and trust deposits.

The Corporation has commitments to extend credit and letters of credit. As of December 31, 2025, the balance of commitments to extend credit was $8.7 billion and total letters of credit were $0.3 billion.

Liquidity must also be managed at the Parent Company. For safety and soundness reasons, banking regulations limit the amount of cash that can be transferred from a subsidiary bank to its parent company in the form of loans and dividends. Generally, these limitations are based on the subsidiary bank's regulatory capital levels and its net income. Management continues to monitor the liquidity and capital needs of the Parent Company including monitoring the granularity of the deposit portfolio and level of uninsured deposits. Management will implement appropriate strategies, as necessary, to remain adequately capitalized and to meet its cash needs.

The Consolidated Statements of Cash Flows provide additional information. The Corporation's operating activities during 2025 generated $304.5 million of cash, mainly due to net income of $391.6 million. Cash used in investing activities was $82.2 million, primarily due to the net change in loans of $101.8 million. Net cash used by financing activities was $224.6 million, due largely to $485.0 million in repayment of borrowings and $141.2 million of dividends paid, partially offset by a $460.0 million increase in net deposits. See "The Consolidated Statement of Cash Flows" in "Item 8. Financial Statements and Supplementary Data" for details of cash flow activity.

The following table presents the expected maturities of AFS state and municipal and corporate debt securities, at estimated fair value, as of December 31, 2025 and the weighted average yields on such securities (calculated based on historical cost):

Maturing

Amount Yield Amount Yield Amount Yield Amount Yield

AFS (dollars in thousands)

(1) Weighted average yields on tax-exempt securities have been computed on a FTE basis assuming a federal tax rate of 21% and statutory interest expense

disallowances.

The Corporation's investment portfolio consists of residential mortgage-backed securities, commercial mortgage-backed securities, collateralized mortgage obligations, state and municipal securities and corporate debt securities. Commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers' ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. As rates increase, cash flows generally decrease as prepayments on the underlying mortgage loans decrease. As rates decrease, cash flows generally increase as prepayments increase.

The following table presents AFS residential mortgage-backed securities, commercial mortgage-backed securities and collateralized mortgage obligations, at estimated fair value, and HTM residential mortgage-backed securities and commercial mortgage-backed securities, at amortized cost, as of December 31, 2025, without stated maturities, including the weighted average yields and estimated weighted average lives based on prepayment speeds on such securities:

Weighted

Amount Yield Average Life

(dollars in thousands) (in years)

AFS

Residential mortgage-backed securities $ 766,717 4.60 % 4.7

HTM

Residential mortgage-backed securities $ 573,636 3.51 % 6.5

The following table presents the contractual maturities of fixed rate loans and loan types subject to changes in interest rates as of December 31, 2025:

(dollars in thousands)

Commercial and industrial:

Real estate - mortgage(1):

Real estate - construction:

Consumer, leases and other:

(1) Includes commercial mortgages, residential mortgages and home equity loans.

The scheduled maturities of time deposits as of December 31, 2025 were as follows (dollars in thousands):

Year

The scheduled maturities of the portion of time deposits estimated to be in excess of the FDIC insurance limit as of December 31, 2025 included in the table above, were as follows (dollars in thousands):

Over three through six months 133,817

Over six through twelve months 166,734

Total uninsured deposits (excluding intra-Company deposits) were estimated to be $9.7 billion at December 31, 2025 compared with $9.4 billion at December 31, 2024.

Debt Security Market Price Risk

Debt security market price risk is the risk that changes in the values of debt securities, unrelated to interest rate changes, could have a material impact on the financial position or results of operations of the Corporation. The Corporation's debt security investments consist primarily of GSEs issued mortgage-backed securities and collateralized mortgage obligations, state and municipal securities, and corporate debt securities. All of the Corporation's investments in mortgage-backed securities and collateralized mortgage obligations have principal payments that are guaranteed by GSEs.

State and Municipal Securities

As of December 31, 2025, the Corporation owned investment securities issued by various states and municipalities with a total fair value of $826.7 million. Uncertainty with respect to the financial strength of state and municipal bond insurers places emphasis on the underlying strength of issuers. Pressure on local tax revenues of issuers due to adverse economic conditions could have an adverse impact on the underlying credit quality of issuers. The Corporation evaluates existing and potential holdings primarily based on the underlying creditworthiness of the issuing state or municipality and then, to a lesser extent, on any credit enhancement. State and municipal securities can be supported by the general obligation of the issuing state or municipality, allowing the securities to be repaid by any means available to the issuing state or municipality. As of December 31, 2025, approximately 100% of state and municipal securities were supported by the general obligation of corresponding states or municipalities. Approximately 74% of these securities were school district issuances, which are also supported by the states of the issuing municipalities.

Item 8. Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per-share data)

December 31,

ASSETS

Investment securities:

LIABILITIES

Deposits:

Borrowings:

Other borrowings and interest-bearing liabilities 679,738 564,732

SHAREHOLDERS' EQUITY

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per-share data)

Interest Income

Interest Expense

Non-Interest Income

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

Investment securities (losses) gains, net (2) (20,283) (733)

Non-Interest Expense

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

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

Other comprehensive income, net of tax:

Unrealized gains (losses) on AFS investment securities:

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:

Defined benefit pension plan and postretirement benefits:

Unrecognized pension and postretirement income 2,826 7,279 4,777

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands, except per share data)

(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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

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)

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) —

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)

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale-leaseback transaction 11,323 51,123 —

Net cash received for acquisition — 1,018,371 —

CASH FLOWS FROM FINANCING ACTIVITIES:

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

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for:

Business Combination

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

Intangible assets — 92,600 —

PCD Loans credit discount — 54,631 —

See Notes to Consolidated Financial Statements

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 FHLBStock: 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

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 2016-13Financial 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

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 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.

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.

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.

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.

FULT US Equity

FULT · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

FULT US Equity☆

FULT · 10-K · period ended 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

FULT US Equity