FULT 10-K & 10-Q changes, risk factors and insider trading

Our financial condition and results of operations are affected by conditions in the economy and the financial markets generally. Our financial performance is highly dependent upon the business environment in the markets where we operate and in the United States as a whole. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, business activity or investor or business confidence; limitations on the availability, or increases in the cost, of credit and capital; changes in the rate of inflation or in interest rates; high unemployment; labor shortages; governmental fiscal and monetary policies; the level of, or changes in, prices of raw materials, goods or commodities; supply chain issues; global economic conditions; immigration policies; trade policies and tariffs affecting other countries as well as retaliatory policies and tariffs by such countries; geopolitical events, including the war between Russia and Ukraine and the ongoing conflicttensions in the Middle East; natural disasters; public health crises, such as epidemics and pandemics; acts of war or terrorism; or a combination of these or other factors.

Specifically, the business environment impacts the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral, if any, securing those loans, as well as demand for loans and other products and services we offer. There continues to beWorsening economic uncertainty,conditions, includingsuch theas possibilityeconomic ofdownturns, arecessions, recessionincreases resultingin fromprevailing elevatedinterest levels of inflationrates and ahigh higher-for-longerunemployment interest rate environment, whichrates, could negatively impact the quality of our loan portfolio. As a result, we may have to increase our provision for credit losses, which would negatively impact our results of operations, and could result in charge-offs of a higher percentage of our loans. Unlike large, national institutions, we are not able to spread the risks of unfavorable local economic conditions across a large number of diversified economies and geographic locations. If the communities in which we operate do not grow, or if prevailing economic conditions locally or nationally are unfavorable, our business could be adversely affected. In addition, increased market competition in a lower demand environment could adversely affect our profit potential.

InDuring 2022-2024, the Federal Reserve Board raised the target range for the Fed Funds Rate in a series of actions to combat rising inflation that began in March 2022, the Federal Reserve Board raised the Fed Funds Rate to 5.25% to 5.50% in July 2023.inflation. Beginning in September 2024, as inflation moderated toward the Federal Reserve Board's policy objective, the Federal Reserve Board incrementally reduced the Fed Funds RateRate, which is now at a target range of 3.50% to 4.25% to 4.50% as of February 1, 2025.3.75%. The timing and magnitude of future Fed Funds Rate decreases are uncertain, and increases in Fed Funds Rates are possible.

Changes in monetary policy, including changes in interest rates, influence not only the interest we receive on loans and securities that we invest in and the interest we pay on deposits and borrowings, but such changes could affect our ability to originate loans and obtain deposits, the fair value of financial assets and liabilities, and the average duration of our assets. Net interest income is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities. Net interest income is the most significant component of our net income, accounting for approximately 78%79% of total revenues in 2024.2025. Changes in market interest rates, in the shape of the yield curve or in spreads between different market interest rates can have a material effect on our net interest margin.NIM. The rates on some interest-earning assets, such as loans and investments, and interest-bearing liabilities, such as deposits and borrowings, adjust concurrently with, or within a brief period after, changes in market interest rates, while others adjust only periodically or not at all during their terms. Thus, changes in market interest rates might, for example, result in a decrease in the interest earned on interest-earning assets that is not accompanied by a corresponding decrease in the interest paid on interest-bearing liabilities, or the decrease in interest paid on interest-bearing liabilities might be at a slower pace, or in a smaller amount, than the decrease in interest earned on interest-earning assets, reducing our net interest income and/or net interest margin.NIM. In addition, we are dependent on lower-cost, core deposits as our primary source of funding and changes in interest rates could increase our cost of funding, reduce our net interest marginNIM and/or create liquidity challenges.

Our investment management and trust services revenue, which is partially based on the value of the underlying investment portfolios, can also be impacted by fluctuations in the securities markets. If the values of those investment portfolios decrease, whether due to factors influencing U.S. or international securities markets, in general, or otherwise, our non-interest income could be negatively impacted. In addition, our ability to sell our securities brokerage and wealth management services is dependent, in part, upon consumers' level of confidence in securities markets. Securities market volatility or other market disruptions may adversely affect our ability to sell our securities brokerage and wealth management services, which could negatively affect our fee-based non-interest income, and as a result, our results of operations.

At December 31, 2024,2025, approximately 65%63% of our loan portfolio consisted of commercial loans, commercial mortgage loans, and residential and commercial construction loans. Commercial loans, commercial mortgage loans and residential and commercial construction loans generally involve a greater degree of credit risk than residential mortgage loans and consumer loans because these loans are likely to be more sensitive to broader economic factors and conditions. Because payments on these loans often depend on the successful operation and management of borrowers' businesses and properties, repayment of such loans may be affected by factors outside of the borrower's control, including adverse conditions in the real estate markets, adverse economic conditions or changes in governmental regulation. In addition, commercial loans typically have relatively large balances and the deterioration of one or a few of these loans could cause a significant increase in the percentage of non-performing loans. An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses and an increase in charge-offs, all of which could have a material adverse effect on our business, financial condition and results of operations.

At December 31, 2024,2025, commercial mortgage loans represented approximately 40%41% of our loan portfolio. These loans are secured by both owner-occupied and non-owner-occupied commercial real estate. The market for commercial real estate is cyclical and a significant change in the real estate market that results in deterioration in the value of collateral or rental or occupancy rates could adversely affect borrowers’ ability to repay loans. For example, the increased prevalence of remote and hybrid working arrangements as a result of COVID-19 has impacted the demand for commercial office space putting pressure on office rental and occupancy rates. In addition, the current elevated level of interest rates may make it more difficult for commercial real estate borrowers to refinance or repay maturing loans and may adversely affect the market value of the underlying real estate. Changes in the real estate market could also affect the value of foreclosed assets. Negative developments in the commercial real estate market could result in an increase in non-performing loans, the need for us to increase the provision for loan losses and an increase in charge-offs, all of which could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on customer deposits as our primary source of funding. A substantial majority of our deposits are in non-maturing accounts that customers can withdraw on demand or upon several days' notice. Factors, including competition with bank and non-bank competitors, changes in interest rates, the availability of alternative investment options, customer confidence in the industry and the liquidity needs of deposit customers, can cause fluctuations in both the level and cost of customer deposits. Further, deposits from state and municipal entities, primarily in non-maturing, interest-bearing accounts, are a significant source of deposit funding for us, representing approximately 13% of total deposits at December 31, 2024.2025. State and municipal customers frequently maintain large deposit account balances substantially in excess of the FDIC insurance limit, and these depositors may be more sensitive than other depositors to changes in interest rates. Changes in any of these factors could increase our funding costs, reduce our net interest marginNIM and/or create liquidity challenges.

Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of us, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. As we and other regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed "too big to fail" or remove deposits from the banking system entirely. At December 31, 2024,2025, approximately 37%36% of our deposits (excluding Intra-Company deposits) were uninsured and we are dependent on these deposits for liquidity.

We originate residential mortgage loans and other loans, such as loans guaranteed, in part, by the SBA, all or portions of which are later sold in the secondary market to government sponsored enterprises or agencies,GSEs, such as the Federal National Mortgage Association (Fannie Mae) and other non-government sponsored investors. In connection with such sales, we make certain representations and warranties with respect to matters such as the underwriting, origination, documentation or other characteristics of the loans sold. We may be required to repurchase a loan, or to reimburse the purchaser of a loan for any related losses, if it is determined that the loan sold was in violation of representations or warranties made at the time of the sale, and, in some cases, if there is evidence of borrower fraud, in the event of early payment default by the borrower on the loan, or for other reasons. We maintain reserves for potential losses on certain loans sold, however, it is possible that losses incurred in connection with loan repurchases and reimbursement payments may be in excess of any applicable reserves, and we may be required to increase reserves and may sustain additional losses associated with such loan repurchases and reimbursement payments in the future, all of which could have a material adverse effect on our business, financial condition and results of operations.

The sale of residential mortgage loans and other loans in the secondary market serves as a source of non-interest income and liquidity for us and can reduce our exposure to interest rate risk. Efforts to reform government sponsored enterprises and agencies,GSEs, changes in the types of, or standards for, loans purchased by government sponsored enterprises or agenciesGSEs and other investors, or our failure to maintain our status as an eligible seller of such loans may limit our ability to sell these loans. Our inability to continue to sell these loans could reduce our non-interest income, limit our ability to originate and fund these loans in the future, and make managing interest rate risk more challenging, any of which could have a material adverse effect on our business, financial condition and results of operations.

The commercial soundness of many financial institutions may beare closely interrelated as a result of credit, trading, execution of transactions or other relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions. This risk is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges with which we interact on a daily basis, and, therefore, could have a material adverse effect on our business, financial condition or results of operations.

We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidatedConsolidated financialFinancial statements,Statements, and the reported amounts of revenue and expenses during the reporting period to prepare these consolidatedConsolidated financialFinancial statementsStatements in conformity with GAAP. Actual results could differ from these estimates. Material estimates subject to change in the near term include, among other items: the allowance for credit losses; the carrying value of goodwill or other intangible assets; the fair value estimates of certain assets and liabilities; and the realization of deferred tax assetsDTAs and liabilities. These estimates may be adjusted as more current information becomes available and any adjustment may be significant.

We are subject to extensive regulation and supervision and may be adversely affected by changes in, or any failure to comply withwith, laws and regulations.

Virtually every aspect of our operations is subject to extensive regulation and supervision by federal and state regulatory agencies, includingincluding, but not limited to, the Federal Reserve Board, OCC, FDIC, CFPB, DOJ, UST, SEC, HUD, DOL, EEOC, state attorneys general and state banking, financial services, securities and insurance regulators. Under this framework, regulatory agencies have broad authority to carry out their supervisory, examination and enforcement responsibilities to address compliance with applicable laws and regulations, includingincluding, but not limited to, laws and regulations relating to capital adequacy, asset quality, earnings, liquidity, risk management and financial accounting and reporting as well as laws and regulations governing consumer protection, fair lending, privacy, information security and cybersecurity risk management, third-party vendor risk management, AML and sanctions and anti-terrorism laws. Failure to comply with these regulatory requirements, including inadvertent or unintentional violations, may result in the assessment of fines and penalties, the commencement of informal or formal regulatory enforcement actions against us, or regulatory restrictions on our activities. Failure to comply may also affect our ability to grow through acquisitions, discourage institutional investment managers to invest in our securities, result in reputational damage, or increase our costs of doing business.

Compliance with banking and financial services statutes and regulations also impacts our ability to engage in new activities or to expand existing activities. Federal and state banking agencies possess broad powers to take supervisory actions, as they deem appropriate. These supervisory actions may result in higher capital requirements, higher deposit insurance premiums and limitations on our operations and expansion activities that could have a material adverse effect on our business and profitability. We have dedicateddedicate significant time, effort, and expense over time to comply with regulatory and supervisory standards and requirements imposed by our regulators, and we expect that we will continue to do so. If we fail to develop the systems and processes necessary to comply with the standards and requirements imposed by these rules at a reasonable cost, it could have a material adverse effect on our business, financial condition or results of operations.

Many aspects of our business involve a substantial risk of legal liability. From time to time, we have been named or threatened to be named as a defendant in various lawsuits arising from our business activities and, in some cases, from the activities of companies that we or our subsidiaries acquired. In addition, we are periodically the subject of governmental investigations and other forms of regulatory or governmental inquiry. These lawsuits, investigations, inquiries and other matters could lead to: administrative, civil or criminal proceedings, result in adverse judgments, settlements, fines, penalties, restitution, injunctions or other types of sanctions, the need for us to undertake remedial actions, or otherwise alter our business, financial or accounting practices. Substantial legal liability or significant regulatory actions against us could materially adversely affect our business, financial condition and results of operations and cause significant reputational harm.

We are subject to changes in tax laws that could increase our effective tax rate. These law changes may be retroactive to previous periods and, as a result, could negatively affect our current and future financial performance. The Tax Act reduced our federal corporate income tax rate to 21% beginning in 2018. The Tax Act also imposed limitations on our ability to take certain deductions, such as the deduction for FDIC deposit insurance premiums, which partially offset the increase in net income from the lower tax rate. The Inflation Reduction Act of 2022 imposes a 1% excise tax on the value of our shares we repurchase that exceeds $1 million in the aggregate during any taxable year, subject to certain adjustments. Additionally, on July 4, 2025, H.R. 1 was signed into law, which included a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions from the Tax Act and accelerating the phase-out of certain incentives from the Inflation Reduction Act of 2022.

In addition, a number of the changes to the Tax Code are set to expire at the end of 2025. There is substantial uncertainty concerning whether those expiring provisions will be extended and whether future legislation will further revise the Tax Code. ChangesFuture changes to the Tax Code may affect our business, financial condition and results of operations.

Regulations relating to privacy, information security, and data protection could increase our costs, affect or limit how we collect and use personal information,information and adversely affect our business opportunities.

We are subject to various federal and state privacy, information security, and data protection laws, such as the GLBA, that among other things require privacy disclosures and maintenance of a robust security program that are increasingly subject to change which could have a significant impact on our current and planned privacy, data protection, and information security-related practices; our collection, use, sharing, retention, and safeguarding of consumer or employee information; disclosures and notifications during a cyber or information security incident; and somecertain of our current or planned business activities. Our regulators also hold us responsible for privacy and data protection obligations performed by our third-party service providers while providing services to us, as well as disclosures and notifications during a cyber or information security incident.

New or changes to existing laws could increase our costs of compliance and business operations and could reduce income from certain business initiatives, including increased privacy-related enforcement activity and higher compliance and technology costs, and could restrict our ability to provide certain products and services. Our failure to comply with privacy, data protection, and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions, and damage to our reputation, which could have a material adverse effect on our business, financial condition or results of operations.

RISKS RELATED TO THE CONSUMMATION OF THE MERGER AND OUR FUTURE STRATEGIC GROWTH

We face a variety of risks in connection with completed and potential future acquisitions.

We may from time to time seek to supplement organic growth through acquisitions of banks, branches or other financial businesses or assets. Potential acquisitionsacquisitions, including the pending Merger, are typically subject to regulatory or other approvals, and there can be no assurance that we would be able to obtain any such approvals in a timely manner, without restrictive conditions or at all. Even if required approvals are obtained, acquisitions involve numerous risks, including lower than expected performance, higher than expected costs, difficulties related to integration, diversion of management's attention from other business activities, the potential loss of key employees, changes in relationships with customers, disruption of the operations of the acquired business and our business, exposure to potential asset quality issues andissues, unknown or contingent liabilities of the acquired business and changes in banking or tax laws or regulations that may affect the acquired business and our business.

FutureAdditionally, future mergers or acquisitions, if any, may involve cash, debt or equity securities as transaction consideration. Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our stock's tangible book value and net income per common share may occur in connection with any future transaction. We cannot say with any certainty that we will be able to consummate, or if consummated, successfully integrate any future acquisitions, or that we will not incur disruptions or unexpected expenses in integrating such acquisitions. Furthermore, failure to realize the expected revenue increases, cost savings, strategic gains, increases in geographic or product presence, and/or other anticipated benefits from pending or future acquisitions could have a material adverse effect on our business, financial condition and results of operations.

Our employees are our most important resource. Competition for qualified personnel is intense in many areas of the financial services industry. We endeavor to attract talented new employees and retain and motivate our existing employees to assist in executing our growth, acquisition and business strategies. We also seek to retain proven, experienced senior employees augmented from time to time by external hires, to provide continuity of succession of our executive management team. Losses ofof, or changes inin, our current executive officers or other key personnel, or the inability to recruit and retain qualified personnel in the future, could materially and adversely affect our financial condition and results of operations.

We face strong competition from financial services companies and other companies that offer banking services,services which could materially and adversely affect our business.

The financial services industry has become even more competitive as a result of legislative, regulatory, and technological changes and continued banking consolidation,consolidation which may increase in connection with current economic, market, and political conditions. We face substantial competition in all phases of our operations from a variety of competitors, including national banks, regional banks, community banks and FinTechs. Many of our competitors offer the same banking services that we offer and our success depends on our ability to adapt our products and services to evolving industry standards and customer preferences. In addition to product and service offerings, we compete based on a number of other factors, including financial and other terms, underwriting standards, technological capabilities, brand, and reputation. Increased competition in our market may result in reduced new loan production and/or decreased deposit balances or less favorable terms on loans and leases and/or deposit accounts. We also face competition from many other types of financial institutions, including without limitation, non-bank specialty lenders, insurance companies, private investment funds, investment banks and other financial intermediaries, and some of these competitors may not be subject to the same regulatory requirements that we are. Many of our competitors have significantly greater resources, established customer bases, more locations, and longer operating histories. Should competition in the financial services industry intensify, our ability to market our products and services may be adversely affected. If we are unable to attract and retain banking customers, we may be unable to grow or maintain the levels of our loans and deposits, and our financial condition and results of operations may be adversely affected as a result. Ultimately, we may not be able to compete successfully against current and future competitors.

The financial services industry experiences continuous technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. The costs of implementing new technology, including personnel, can be high, in both absolute and relative terms, and we may not achieve intended benefits of new technology initiatives. Moreover, the implementation of new technology can expose us to new or increased operational risks. For example, our implementation of certain new technologies, such as those related to artificial intelligence, machine learning and automated decision making, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively. Many of our competitors have substantially greater resources to invest in technological improvements or are technology focused start-ups with internally developed cloud-native systems that offer improved user interfaces and experiences. Due to our size, we may face challenges in allocating sufficient resources to keep pace with technological investments and improvements implemented by our larger competitors. In addition, new payment, credit and investment and wealth management services developed and offered by non-bank or non-traditional competitors pose an increasing threat to the products and services traditionally provided by financial institutions like us. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers, or effectively deploy new technologies to improve efficiency. In addition, we depend on internal and outsourced technology to support all aspects of our business operations. Interruption or failure of these systems creates a risk of business loss as a result of adverse customer experiences and possible diminishing of our reputation, damage claims or civil fines. Failure to successfully keep pace with technological change affecting the financial services industry or to successfully implement core processing strategies could have a material adverse impact on our business and, in turn, our financial condition and results of operations.

We have pursued a strategy of capital management under which we have sought to deploy capital through stock repurchases and dividends on our common stock, in a manner that is beneficial to our shareholders. Our shareholders are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments. We are not required to pay dividends on, or effect repurchases of, our common stock and may reduce or eliminate our common stock dividend and/or share repurchases in the future. Our ability to pay dividends to our stockholders is subject to the restrictions set forth in Pennsylvania law, by the Federal Reserve,Reserve Board, and by certain covenants contained in our subordinated debentures. Notification to the Federal Reserve Board is also required prior to our declaring and paying a cash dividend to our shareholders during any period in which our quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount, among other requirements. We may not pay a dividend if the Federal Reserve Board objects or until such time as we receive approval from the Federal Reserve Board or we no longer need to provide notice under applicable regulations. In addition, we may be restricted by applicable law or regulation or actions taken by our regulators, now or in the future, from paying dividends to, or repurchasing shares of our common stock from, our shareholders. We cannot provide assurance that we will continue paying dividends on, or repurchase shares of, our common stock at current levels or at all. A reduction or discontinuance of dividends on our common stock or our share repurchases could have a material adverse effect on the market price of our common stock.

(1)Ratio representsRepresents 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.

Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was $278.5$381.4 million for the year ended December 31, 2024,2025, a $4.5$102.9 million increase compared to $274.0$278.5 million in 2023.2024. Net income available to common shareholders per diluted share was $1.57$2.08 for the year ended December 31, 2024,2025, a $0.07$0.51 decreaseincrease compared to $1.64$1.57 in 2023.2024.

•Provision for credit losses of $23.4$35.7 million relatedresulting in an ACL attributable to non-PCDnet Loansloans acquiredof in$364.5 themillion, Republicor First1.51% Transaction.of total net loans as of December 31, 2025.

The following is a summary of thoseCorporation'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. SeeThe additionalfollowing informationis regardinga thesesummary criticalof those accounting policies in "Note 1 - Summary of Significant Accounting Policies," inthat the NotesCorporation considers to be most important to the Consolidatedpresentation Financialof Statementsits infinancial "Item 8. Financial Statementscondition and Supplementaryresults Data."of operations.

The ACL incorporates the Corporation’s historical credit observations, current conditions,conditions and reasonable and supportable forecasts. These 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.

Income tax expense was $55.9$94.0 million and $64.4$55.9 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively.

FTE net interest income was $978.2$1.1 millionbillion for the year ended December 31, 2024,2025, an increase of $106.1$75.8 million, compared to $872.1$978.2 million for the same period in 2023.2024. For the twelve monthsyears ended December 31, 20242025 and December 31, 2023,2024, NIM was 3.42%.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 20242025 compared to 20232024 and 2022.2023. 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.

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

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

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

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. Overall, the increase in average net loans was largely driven by increases in average commercial mortgage loans, average residential mortgage loans and average commercial and industrial loans of $1.2 billion, $846.0 million and $182.5 million, respectively. The yield on total loans increased 51 bps to 6.08% in 2024 compared to 5.57% in 2023.

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. The increase in average deposits occurred primarily in average time deposits, average interest-bearing demand deposits and average savings and money market deposits, which increased $1.6 billion, $1.5 billion and $748.0 million, respectively, partially offset by a decrease in average noninterest-bearing demand deposits of $545.3 million.

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

Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was $92.2$99.9 million for the three months ended MarchJune 31,30, 2026, a $1.8$3.2 million increase compared to $90.4$96.6 million for the same period in 2025. Net income available to common shareholders per diluted share was $0.51$0.52 for the three months ended MarchJune 31,30, 2026, a $0.02$0.01 increasedecrease compared to the same period in 2025.

ThreeSix Months Ended MarchJune 31,30, 2026 Results were Impacted by the Following Items:

•Provision for credit losses of $14.4$19.3 million resulting in an ACL attributable to net loans of $367.5$382.6 million, or 1.51%1.48% of total net loans as of MarchJune 31,30, 2026.

•DuringThe theCorporation threerepurchased months ended March 31, 2026, 1,212,6501,737,650 shares of the Corporation's common stock were repurchased under the 2026 Repurchase Program at a cost of $24.5$35.6 million or an average of $20.21$20.51 per share.

Three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 Net Interest Income FTE net interest income was $266.3$288.6 million for the three months ended MarchJune 31,30, 2026, an increase of $10.8$29.3 million, compared to $255.5$259.3 million for the same period in 2025. For the three months ended MarchJune 31,30, 2026, NIM increased to 3.58%,3.60%, or 1513 bps, compared to the same period in 2025. The Corporation manages the risk associated with changes in interest rates through the techniques described within Part 1, "Item 3. Quantitative and Qualitative Disclosures About Market Risk" in this Quarterly Report on Form 10-Q. The following table provides a comparative average balance sheet and net interest income analysis for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. 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 taxable-equivalent amounts.

The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances (volume) and changes in yields and rates for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025:

Compared to the firstsecond quarter of 2025, FTE total interest income for the firstsecond quarter of 2026 decreasedincreased $9.7$25.3 million, or 2.4%,6.2%, due to a $10.9$30.6 million increase attributable to changes in volume, partially offset by a $5.2 million decrease attributable to changes in yield, partially offset by a $1.3 million increase attributable to changes in volume. The decrease due to changes in yield was primarily due to a decline in interest rates on average net loans.yield. The increase due to changes in volume was largely due to an increase in average net loans offsetand bywas aprimarily due to $1.6 billion of loans acquired in the Blue Foundry Merger. The decrease due to changes in yield was primarily due to lower interest rates on average investmentnet securities and average other interest-earning assets.loans.

The yield on average total interest-earning assets decreased 13four bps for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily due to lower interest rates.

In the firstsecond quarter of 2026, interest expense decreased $20.5$3.9 million compared to the firstsecond quarter of 2025, primarily driven by a $19.0$16.8 million decrease attributable to changes in rate and a $1.5$12.8 million decreaseincrease attributable to changes in volume. The decrease in interest expense attributable to changes in rate was primarily due to lower interest rates. The decreaseincrease in interest expense attributable to changes in volume was drivenprimarily bydue decreasesto $1.5 billion of deposits acquired in averagethe borrowingsBlue andFoundry other interest-bearing liabilities, average time deposits and average brokered deposits, partially offset by an increase in average savings and money market deposits.Merger.

The rate on average total interest-bearing liabilities decreased 3827 bps for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily due to lower interest rates.

During the firstsecond quarter of 2026, average net loans increased $218.8$2.0 million,billion, or 0.9%,8.3%, compared to the same period in 2025. The increase in average net loans was primarily due to a $328.7$1.2 millionbillion increase in average commercial mortgage loans and a $275.4$741.5 million increase in average residential mortgage loans and average commercial mortgage loans, respectively, partially offset by a $370.1$209.5 million decrease in average construction loans. The increase in average commercial mortgagenet loans was primarily driven by $1.6 billion of loans acquired in partthe dueBlue Foundry Merger. See "Note 2- Business Combinations" in the Notes to aConsolidated $207.7Financial millionStatements purchasein ofPart in-marketI, loans"Item during1. theFinancial quarter ended March 31, 2026, which primarily consisted of commercial mortgage loans.Statements."

The yield on total loans decreased 16six bps to 5.70%5.80% for the firstsecond quarter of 2026 compared to 5.86% for the same period in 2025.2025 primarily due to lower interest rates.

Average total deposits increased $281.2$1.9 million,billion, or 1.1%,7.2%, in the firstsecond quarter of 2026 compared to the same period in 2025. The increase in average total deposits was primarily due to aincreases $712.8of $908.8 million, $479.1 million increase and a $20.5$428.2 million increase in average savings and money market deposits anddeposits, average interest-bearing demand deposits, respectively, partially offset by a $292.0 million decrease and a $112.1 million decrease in average noninterest-bearing demand deposits and average time deposits, respectively. The increase in average total deposits was primarily driven by $1.5 billion of deposits assumed in the Blue Foundry Merger.

The cost of deposits decreased 2517 bps to 1.78%1.81% in the firstsecond quarter of 2026 compared to 2.03%1.98% for the same period in 2025 primarily due to lower interest rates.

Average total borrowings and other interest-bearing liabilities decreased $395.8$11.4 million, or 22.6%,0.6%, in the firstsecond quarter of 2026 compared to the same period in 2025. The decrease in average total borrowings and other interest-bearing liabilities was primarily due to a $488.3$236.2 million decrease in average FHLB advances, partially offset by a $92.2$142.1 million increase in average senior debt and subordinated debt and a $83.9 million increase in average other borrowings and interest-bearing liabilities.

The provision for credit losses was $14.4$4.9 million for the three months ended MarchJune 31,30, 2026 resulting in a $367.5$382.6 million allowance for credit lossesACL attributable to net loans, or 1.51%1.48% of total net loans as of MarchJune 31,30, 2026, compared to a provision for credit losses of $13.9$8.6 million for the same period in 2025, resulting in a $379.7$377.3 million allowance for credit lossesACL attributable to net loans, or 1.59%1.57% of total net loans as of MarchJune 31,30, 2025. A $31.0 million initial ACL on purchased loans was recorded as a result of the Blue Foundry Merger.

Non-interest income for the three months ended MarchJune 31,30, 2026 increased $2.6$10.2 million, or 3.9%,14.7%, compared to the same period in 2025. The increase in non-interest income was primarily dueattributable to a $2.7$6.9 million gain related to the sale of an equity method investment, reflected in other non-interest income, a $0.9 million increase in mortgage banking income due to higher loan sales volumes and spreads, a $0.9 million increase in wealth management revenues as a result of an increase in assets under management, a $1.2$0.6 million increase in consumer banking card income due to higher transaction volume, and a $0.6 million increase in commercial customer interest rate derivative fee incomeincome, reflected in capital markets, and a $1.1 million increase in consumer banking income, partially offset by a $3.4 million decrease in income from equity method investments reflected in other non-interest income.markets.

Non-interest expense for the three months ended MarchJune 31,30, 2026 increased $10.8$38.1 million, or 5.7%,19.8%, compared to the same period in 2025. Excluding FultonFirst implementation and asset disposals and acquisition-related expenses, non-interest expense increased $7.0$24.2 million, or 3.7%.12.5%. The increase in non-interest expense before FultonFirst implementation and asset disposals and acquisition-related expenses was primarily duedriven toby a $6.2$12.0 million increase as a result of the Blue Foundry Merger. Excluding FultonFirst implementation and asset disposals, acquisition-related expenses and the Blue Foundry Merger impact, the remaining $12.2 million increase in non-interest expense was driven by a $6.6 million increase in salaries and employee benefits expense drivenlargely bydue to annual merit increases inand base salaries andsales commissions expenseexpense. andThe a $3.4$4.8 million increase in professionalother feesnon-interest primarilyexpense includes $2.1 million related to the decision to merge the multiemployer pension plan assumed in the Prudential Bancorp Merger with the Pension Plan and $0.8 million of debt extinguishment costs recognized in connection with the redemption of the Subordinated Notes due to a prior year recovery of previously incurred fees, partially offset by a $1.3 million decrease in FDIC insurance expense and a $0.9 million decrease in intangible amortization expense.2030.

Income tax expense for the three months ended MarchJune 31,30, 2026 was $22.4$25.3 million, a $0.3$1.8 million increase compared to the same period in 2025. The Corporation's ETR was 19.1%19.8% for the three months ended MarchJune 31,30, 2026 compared to 19.2%19.1% for the same period in 2025.