FULT 10-Q Quarterly Report March 31, 2025

FULTON FINANCIAL CORP

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fult-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025 , or


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-39680

FULTON FINANCIAL CORP ORATION

(Exact name of registrant as specified in its charter)

Pennsylvania

23-2195389

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

One Penn Square

P. O. Box 4887

Lancaster,

Pennsylvania

17604

(Address of principal executive offices)

(Zip Code)

( 717 ) 291-2411

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $2.50	FULT	The Nasdaq Stock Market, LLC
Depositary Shares, Each Representing 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A	FULTP	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $2.50 Par Value – 181,794,505 s hares outstanding as of April 30, 2025.

FULTON FINANCIAL CORPORATION

FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2025

INDEX


Description		Page



Glossary of Terms		3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statement s :

(a)	Consolidated Balance Sheets - March 31 , 202 5 and December 31, 20 24	6

(b)	Consolidated Statements of Income - Three months ended M a rch 31 , 202 5 and 202 4	7

(c)	Consolidated Statements of Comprehensive Income - Three months ended March 31 , 202 5 and 202 4	8

(d)	Consolidated Statements of Shareholders’ Equity - Three months ended March 31 , 202 5 and 20 24	9

(e)	Consolidated Statements of Cash Flows - Three months ended March 31 , 202 5 and 20 24	10

(f)	Notes to Consolidated Financial Statements	11

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		33

Item 3. Quantitative and Qualitative Disclosures A bout Market Risk		52

Item 4. Controls and Procedures		55

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		55

Item 1A. Risk Factors		56

Item 2. Unregistered Sales of Equity Securit ies and Use of Proceeds		56

Item 3. Defaults Upon Senior Securities - (not applicable)

Item 4. Mine Safety Disclosures - (not applicable)

Item 5. Other Information		65

Item 6. Exhibits		57

Signatures		58

Note: Some numbers contained in the document may not sum due to rounding

GLOSSARY OF DEFINED ACRONYMS AND TERMS

2025 Repurchase Program

The authorization, commencing on January 1, 2025 and expiring on December 31, 2025, to repurchase up to $125 million of the Corporation's common stock; under this authorization, up to $25 million of the $125 million authorization may be used to repurchase the Corporation's preferred stock and outstanding Subordinated Notes due 2030

ACL

Allowance for credit losses

Acquisition Date

April 26, 2024, the date of the Republic First Transaction

AFS

Available for sale

ALCO

Asset/Liability Management Committee

AOCI

Accumulated other comprehensive (loss) income

ASC

Accounting Standards Codification

ASU

Accounting Standards Update

BHCA

Bank Holding Company Act of 1956, as amended

bp or bps

Basis point(s)

Capital Rules

Regulatory capital requirements applicable to the Corporation and Fulton Bank

CDI

Core deposit intangible

Corporation, Company, we, our or us

Fulton Financial Corporation

Directors' Plan

Amended and Restated 2023 Director Equity Plan

Dodd-Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act

Employee Equity Plan

2022 Amended and Restated Equity and Cash Incentive Compensation Plan

ESPP

Employee Stock Purchase Plan

ETR

Effective tax rate

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

Financial Accounting Standards Board

FDIC

Federal Deposit Insurance Corporation

Federal Reserve Board

Board of Governors of the Federal Reserve System

FHLB

Federal Home Loan Bank

FRB

Federal Reserve Bank

FTE

Fully taxable-equivalent

Fulton Bank or the Bank

Fulton Bank, N.A.

GAAP

U.S. generally accepted accounting principles

HTM

Held to maturity

LTV

Loan-to-value

Management's Discussion

Management's Discussion and Analysis of Financial Condition and Results of Operations

Merger

The acquisition by the Corporation of Prudential Bancorp effective as of July 1, 2022

MSRs

Mortgage servicing rights

Net loans

Loan and lease receivables (net of unearned income)

NIM

Net interest margin

N/M

Not meaningful

OBS

Off-balance-sheet

OCI

Other comprehensive income (loss)

OREO

Other real estate owned

Parent Company

Fulton Financial Corporation individually

PCD Loans

Loans purchased with more-than-insignificant credit deterioration

Probability of default

Pension Plan

Defined Benefit Pension Plan

Postretirement Plan

Postretirement Benefits Plan

PSU

Performance-based restricted stock unit

Prudential Bancorp

Prudential Bancorp, Inc.

Republic First Bank

Republic First Bank, doing business as Republic Bank

Republic First Transaction

The acquisition of substantially all of the assets and assumption of substantially all of the deposits and certain liabilities of Republic First Bank by Fulton Bank from the FDIC, as receiver for Republic First Bank

RSU

Restricted stock unit

SAB

Staff Accounting Bulletin

Sale-Leaseback Transaction

Sale of 40 financial center office locations to certain affiliates of Blue Owl Capital Inc. with concurrent agreements to lease each of the locations

SBA

Small Business Administration

SEC

United States Securities and Exchange Commission

Subordinated Notes due 2030

The Corporation's 3.250% Fixed-to-Floating Rate Subordinated Notes due 2030

TruPS

Trust Preferred Securities

FORWARD-LOOKING STATEMENTS

The Corporation has made, and may continue to make, certain forward-looking statements with respect to its financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results.

Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Many factors could affect future financial results including, without limitation:

• the impact of adverse conditions in the economy and financial markets, including elevated interest rates and trade policies and the imposition of tariffs and retaliatory tariffs, on the performance of the Corporation's loan portfolio and demand for the Corporation's products and services;

• the potential impacts of events affecting the financial services industry on the Corporation, including increased competition for, and costs of, deposits and other funding sources, more stringent regulatory requirements relating to liquidity and interest rate risk management and capital adequacy and increased FDIC insurance expenses;

• the effects of actions by the federal government, including those of the Federal Reserve Board and other government agencies, that impact the money supply and market interest rates;

• the effects of market interest rates, and the relative balances of interest rate-sensitive assets to interest rate-sensitive liabilities, on NIM and net interest income;

• the composition of the Corporation's loan portfolio, including commercial mortgage loans, commercial and industrial loans and construction loans, which collectively represent a majority of the loan portfolio, may expose the Corporation to increased credit risk;

• the effects of changes in interest rates on demand for the Corporation's products and services;

• investment securities gains and losses, including declines in the fair value of securities which may result in charges to earnings or shareholders' equity;

• the effects of changes in interest rates or disruptions in liquidity markets on the Corporation's sources of funding;

• capital and liquidity strategies, including the Corporation's ability to comply with applicable capital and liquidity requirements, and the Corporation's ability to generate capital internally or raise capital on favorable terms;

• the effects of competition on deposit rates and growth, loan rates and growth and NIM;

• possible goodwill impairment charges;

• the impact of operational risks, including the risk of human error, inadequate or failed internal processes and systems, computer and telecommunications systems failures, faulty or incomplete data and an inadequate risk management framework;

• the loss of, or failure to safeguard, confidential or proprietary information;

• the Corporation's failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks;

• the impact of failures of third-party vendors upon which the Corporation relies to perform in accordance with contractual arrangements and the effects of concerns about other financial institutions on the Corporation;

• the potential to incur losses in connection with repurchase and indemnification payments related to sold loans;

• the potential effects of climate change on the Corporation's business and results of operations;

• the potential effects of increases in non-performing assets, which may require the Corporation to increase the ACL, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets;

• the determination of the ACL, which depends significantly upon assumptions and judgments with respect to a variety of factors, including the performance of the loan portfolio, the weighted-average remaining lives of different classifications of loans within the loan portfolio and current and forecasted economic conditions, among other factors;

• the effects of the extensive level of regulation and supervision to which the Corporation and Fulton Bank are subject;

• changes in law, regulation and government policy, which could result in significant changes in banking and financial services regulation;

• the continuing impact of the Dodd-Frank Act on the Corporation's business and results of operations;

• the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to the Corporation's reputation;

• the effects of adverse outcomes in litigation and governmental or administrative proceedings;

• the effects of changes in U.S. federal, state or local tax laws;

• the effects of the significant amounts of time and expense associated with regulatory compliance and risk management;

• the Corporation's ability to realize anticipated reductions in non-interest expense and increases in revenue from strategic initiatives implemented from time to time intended to simplify its operating model, improve its relationship banking focus, increase productivity and enhance the customer experience;

• completed and potential acquisitions may affect costs and the Corporation may not be able to successfully integrate the acquired business or realize the anticipated benefits from such acquisitions;

• geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, including the war between Russia and Ukraine and ongoing conflicts in the Middle East, which could impact business and economic conditions in the United States and abroad;

• public health crises and pandemics and their effects on the economic and business environments in which the Corporation operates, including on the Corporation's credit quality and business operations, as well as the impact on general economic and financial market conditions;

• the Corporation's ability to achieve its growth plans;

• the Corporation's ability to attract and retain talented personnel;

• the effects of competition from financial service companies and other companies offering bank services;

• the Corporation's ability to keep pace with technological changes;

• the Corporation's reliance on its subsidiaries for substantially all of its revenues and its ability to pay dividends or other distributions;

• the effects of negative publicity on the Corporation's reputation; and

• other factors that may affect future results of the Corporation.

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per-share data)


	March 31, 2025		December 31, 2024
	(unaudited)
ASSETS
Cash and due from banks	$	388,503	$	279,041
Interest-bearing deposits with other banks	641,953		784,830
Cash and Cash Equivalents	1,030,456		1,063,871
FRB and FHLB stock	136,164		139,574

Loans held for sale	15,965		25,618
Investment securities:
AFS, at estimated fair value	3,575,043		3,410,899
HTM, at amortized cost	1,496,280		1,395,569
Net loans	23,862,574		24,044,919
Less: ACL - loans	( 379,677 )		( 379,156 )
Loans, Net	23,482,897		23,665,763
Net premises and equipment	186,873		195,527
Accrued interest receivable	116,215		117,029
Goodwill and net intangible assets	629,189		635,458
Other assets	1,462,946		1,422,502
Total Assets	$	32,132,028	$	32,071,810
LIABILITIES
Deposits:
Noninterest-bearing	$	5,435,934	$	5,499,760
Interest-bearing	20,893,038		20,629,673
Total Deposits	26,328,972		26,129,433
Borrowings:

FHLB advances	750,000		850,000
Senior debt and subordinated debt	367,396		367,316
Other borrowings	539,804		564,732
Total Borrowings	1,657,200		1,782,048
Accrued interest payable	27,014		31,620
Other liabilities	844,521		931,384
Total Liabilities	28,857,707		28,874,485
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares authorized; Series A, 200,000 shares issued as of March 31, 2025 and December 31, 2024, liquidation preference of $ 1,000 per share	192,878		192,878
Common stock, $ 2.50 par value, 600,000,000 shares authorized, 246,048,499 shares issued as of March 31, 2025 and 245,946,392 shares issued as of December 31, 2024	615,121		614,866
Additional paid-in capital	1,792,104		1,789,214
Retained earnings	1,833,247		1,775,620
Accumulated other comprehensive loss	( 271,547 )		( 287,819 )
Treasury stock, at cost, 63,844,183 shares as of March 31, 2025 and 63,857,567 shares as of December 31, 2024	( 887,482 )		( 887,434 )
Total Shareholders' Equity	3,274,321		3,197,325
Total Liabilities and Shareholders' Equity	$	32,132,028	$	32,071,810

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


(dollars in thousands, except per-share data)	Three months ended March 31
	2025		2024
Interest Income
Loans, including fees	$	344,789	$	311,216
Investment securities	45,738		25,122
Other interest income	9,165		3,328
Total Interest Income	399,692		339,666
Interest Expense
Deposits	130,892		103,574
Federal funds purchased	—		2,388
FHLB advances	8,020		10,949
Senior debt and subordinated debt	3,577		5,305
Other borrowings and interest-bearing liabilities	6,016		10,513
Total Interest Expense	148,505		132,729
Net Interest Income	251,187		206,937
Provision for credit losses	13,898		10,925
Net Interest Income After Provision for Credit Losses	237,289		196,012
Non-Interest Income
Wealth management	21,785		20,155
Commercial banking	21,329		18,829
Consumer banking	13,068		11,668
Mortgage banking	3,138		3,090

Other	7,914		3,398
Non-Interest Income Before Investment Securities (Losses) Gains, Net	67,234		57,140
Investment securities (losses) gains, net	( 2 )		—
Total Non-Interest Income	67,232		57,140
Non-Interest Expense
Salaries and employee benefits	103,526		95,481
Data processing and software	18,599		17,661
Net occupancy	18,207		16,149
Other outside services	11,837		13,283
Intangible amortization	6,269		573
FDIC insurance	5,597		6,104
Equipment	4,150		4,040
Marketing	2,521		1,912

Professional fees	( 1,078 )		2,088
Acquisition-related expenses	380		—
Other	19,452		20,309
Total Non-Interest Expense	189,460		177,600
Income Before Income Taxes	115,061		75,552
Income taxes	22,074		13,611
Net Income	92,987		61,941
Preferred stock dividends	( 2,562 )		( 2,562 )
Net Income Available to Common Shareholders	$	90,425	$	59,379

PER SHARE:
Net income available to common shareholders (basic)	$	0.50	$	0.36
Net income available to common shareholders (diluted)	0.49		0.36
Cash dividends	0.18		0.17
See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(dollars in thousands)


	Three months ended March 31
	2025		2024

Net Income	$	92,987	$	61,941
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on AFS investment securities
Net unrealized holding gains (losses)	9,769		( 16,665 )
Reclassification adjustment for securities net change realized in net income	2		—
Amortization of net unrealized gains (losses) on AFS investment securities transferred to HTM	1,328		1,387
Net Unrealized Gains (Losses) on AFS Investment Securities	11,099		( 15,278 )
Unrealized gains (losses) on interest rate derivatives used in cash flow hedges:
Net unrealized holding gains (losses)	1,764		4,297
Reclassification adjustment for net change realized in net income	3,515		3,899
Net Unrealized Gains on Interest Rate Derivatives Used in Cash Flow Hedges	5,279		8,196
Defined benefit pension plan and postretirement benefits:
Amortization of net unrecognized pension and postretirement items	( 106 )		( 106 )
Other Comprehensive Income (Loss), Net of Tax	16,272		( 7,188 )
Total Comprehensive Income	$	109,259	$	54,753

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except per-share data)


	Preferred Stock			Common Stock			Additional		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
	Shares Outstanding	Amount		Shares Outstanding	Amount		Paid-in Capital
Three months ended March 31, 2025
Balance at December 31, 2024	200	$	192,878	182,089	$	614,866	$	1,789,214	$	1,775,620	$	( 287,819 )	$	( 887,434 )	$	3,197,325
Net income									92,987						92,987
Other comprehensive income											16,272				16,272
Common stock issued (1)				35	88		536								624
Dividend reinvestment activity				65			424						904		1,328

Stock-based compensation awards (repurchases)				46	167		1,930						( 402 )		1,695
Acquisition of treasury stock				( 31 )									( 550 )		( 550 )
Preferred stock dividend									( 2,562 )						( 2,562 )
Common stock dividends - $ 0.18 per share									( 32,798 )						( 32,798 )
Balance at March 31, 2025	200	$	192,878	182,204	$	615,121	$	1,792,104	$	1,833,247	$	( 271,547 )	$	( 887,482 )	$	3,274,321

Three months ended March 31, 2024
Balance at December 31, 2023	200	$	192,878	163,801	$	564,402	$	1,552,860	$	1,619,300	$	( 312,280 )	$	( 857,021 )	$	2,760,139
Net income									61,941						61,941
Other comprehensive loss											( 7,188 )				( 7,188 )

Common stock issued (1)				79	198		895						12		1,105
Dividend reinvestment activity				87			184						1,221		1,405

Stock-based compensation awards (repurchases)				54	151		685						( 103 )		733
Acquisition of treasury stock				( 1,934 )									( 30,348 )		( 30,348 )
Preferred stock dividend									( 2,562 )						( 2,562 )
Common stock dividends - $ 0.17 per share									( 27,546 )						( 27,546 )
Balance at March 31, 2024	200	$	192,878	162,087	$	564,751	$	1,554,624	$	1,651,133	$	( 319,468 )	$	( 886,239 )	$	2,757,679



























See Notes to Consolidated Financial Statements

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(dollars in thousands)	Three months ended March 31
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	92,987	$	61,941
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	13,898		10,925
Depreciation and amortization of premises and equipment	7,222		7,796
Net amortization of investment securities premiums	328		574
Net accretion of loan discounts	( 13,134 )		—
Investment securities losses (gains), net	2		—
Gain on sales of mortgage loans held for sale	( 1,665 )		( 1,697 )
Proceeds from sales of mortgage loans held for sale	101,038		95,388
Originations of mortgage loans held for sale	( 89,720 )		( 89,157 )
Intangible amortization	6,269		573
Amortization of issuance costs and discounts on long-term borrowings	80		182


Gain (loss) on disposal of premises and equipment	( 119 )		3,313
Gain on sale-leaseback transaction	( 416 )		—
Stock-based compensation	2,097		836
Net change in deferred income tax	4,418		( 2,330 )
Net change in accrued salaries and benefits	( 29,799 )		( 14,771 )
Net change in life insurance cash surrender value	( 2,027 )		( 3,563 )
Other changes, net	( 90,756 )		82,891
Total adjustments	( 92,284 )		90,960
Net Cash Provided by Operating Activities	703		152,901
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of AFS investment securities	14,966		—
Proceeds from principal repayments and maturities of AFS investment securities	84,051		14,216
Proceeds from principal repayments and maturities of HTM investment securities	19,727		13,015
Purchase of AFS investment securities	( 252,330 )		( 208,968 )
Purchase of HTM investment securities	( 118,967 )		—
Net change in FRB and FHLB stock	3,410		2,768

Net change in loans	182,888		( 101,987 )
Net purchases of premises and equipment	( 9,356 )		( 1,769 )
Settlement of bank owned life insurance	1,385		236
Proceeds from sale-leaseback transaction	11,323		—

Net change in tax credit investments	( 11,445 )		( 17,399 )
Net Cash (Used in) Investing Activities	( 74,348 )		( 299,888 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand and savings deposits	313,370		( 200,119 )
Net change in time deposits and brokered deposits	( 113,831 )		404,446
Net change in borrowings	( 124,928 )		( 191,668 )


Net proceeds from common stock	1,550		1,002
Dividends paid	( 35,381 )		( 28,703 )
Acquisition of treasury stock	( 550 )		( 30,348 )
Net Cash Provided by (Used in) Financing Activities	40,230		( 45,390 )
Net decrease in Cash and Cash Equivalents	( 33,415 )		( 192,377 )
Cash and Cash Equivalents at Beginning of Period	1,063,871		549,710
Cash and Cash Equivalents at End of Period	$	1,030,456	$	357,333







Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	153,111	$	141,450
Income taxes	7,677		6,764
Supplemental Schedule of Certain Noncash Activities:








Unsettled maturities of AFS investment securities	$	—	$	42,500
See Notes to Consolidated Financial Statements

FULTON FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of the Corporation have been prepared in conformity with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The Corporation evaluates subsequent events through the date of filing of this Quarterly Report on Form 10-Q with the SEC for potential recognition or disclosure in the Consolidated Financial Statements.

Significant Accounting Policies

The significant accounting policies used in the preparation of the Consolidated Financial Statements are disclosed in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024. Those significant accounting policies are unchanged at March 31, 2025.

Recently Adopted Accounting Standards

In November 2023, FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07") . This update requires public entities with reportable segments to provide additional and more detailed disclosures. The Corporation adopted ASU 2023-07 on December 15, 2024, and it did not have a material impact on its Consolidated Financial Statements.

In December 2023, FASB issued ASU 2023-08 Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08") . This update provides guidance for crypto assets to be carried at fair value and requires additional disclosures. The Corporation adopted ASU 2023-08 on January 1, 2025, and it did not have an impact on its Consolidated Financial Statements. The Corporation does not own crypto assets.

In March 2024, FASB issued ASU 2024-01 Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards ("ASU 2024-01") . This update provides guidance for profits interest and similar awards. The Corporation adopted ASU 2024-01 on January 1, 2025, and it did not have a material impact on its Consolidated Financial Statements.

In March 2025, FASB issued ASU 2025-02 - Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 ("ASU 2025-02"). This update removes SEC guidance provided in SAB No. 121, Accounting for Obligations To Safeguard Crypto-Assets an Entity Holds for its Platform Users . The Corporation retrospectively adopted ASU 2025-02 on January 1, 2025, and it did not have an impact on its Consolidated Financial Statements.

Recently Issued Accounting Standards

In December 2023, FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") . This update requires companies to disclose specific categories in the income tax rate reconciliation and requires additional information for certain reconciling items. The Corporation will adopt ASU 2023-09 on December 15, 2025. The Corporation does not expect the adoption of ASU 2023-09 to have a material impact on its Consolidated Financial Statements.

In November 2024, FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense ("ASU 2024-03"). This update requires disaggregation of certain expenses in a note to the consolidated financial statements. The Corporation will adopt ASU 2024-03 on December 15, 2026. The Corporation does not expect the adoption of ASU 2024-03 to have a material impact on its Consolidated Financial Statements.

In November 2024, FASB issued ASU 2024-04 - Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments ("ASU 2024-04"). This update clarifies the requirements for determining whether settlement of convertible debt should be accounted for as induced conversion. The Corporation will adopt ASU 2024-04 on January 1, 2026. The Corporation does not expect the adoption of ASU 2024-04 to have an impact on its Consolidated Financial Statements.

In January 2025, FASB issued ASU 2025-01 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01") . This update clarifies the effective date of ASU 2024-03. The Corporation will adopt ASU 2025-01 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-01 to have a material impact on its Consolidated Financial Statements.

Reclassifications

Certain amounts in the 2024 Consolidated Financial Statements and notes have been reclassified to conform to the 2025 presentation.

NOTE 2 – Business Combinations

On the Acquisition Date, Fulton Bank completed the Republic First Transaction and acquired approximately $ 4.8 billion of assets of Republic First Bank and received approximately $ 0.8 billion of cash from the FDIC. The Bank assumed approximately $ 5.6 billion of total liabilities of Republic First Bank. The Bank did not enter into a loss sharing arrangement with the FDIC in connection with the Republic First Transaction.

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

The Republic First Transaction constitutes a business combination as defined by FASB ASC Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values based on preliminary valuations as of the Acquisition Date. The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows and market conditions at the time of the Republic First Transaction.

The financial settlement process between the Bank and the FDIC concluded on April 25, 2025 with no additional adjustments required to the preliminary gain on acquisition, net of income taxes.

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

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


	Estimated Fair Value
	(dollars in thousands)

Cash payment received from FDIC	$	809,920

Assets acquired:
Cash and due from banks	208,451
Investment securities	1,938,571
Loans	2,495,810
Premises and equipment	184
CDI	92,600
FHLB Stock	37,931
Accrued interest receivable	16,164
Other assets	10,179
Total assets	4,799,890
Liabilities assumed:
Deposits	4,112,143
Borrowings	1,413,751
Accrued interest payable	33,444
Other liabilities	2,641
Total liabilities	5,561,979
Net assets acquired:	( 762,089 )

Gain on acquisition, before income taxes	$	47,831
Gain on acquisition, net of income taxes	$	36,996

The following table presents information with respect to the estimated fair value and unpaid principal balance of acquired loans and leases at the Acquisition Date in connection with the Republic First Transaction:


	April 26, 2024
	Unpaid Principal Balance		Estimated Fair Value
	(dollars in thousands)
Real estate - commercial mortgage	$	1,384,029	$	1,234,409
Commercial and industrial	310,190		279,309
Real-estate - residential mortgage	947,144		752,331
Real-estate - home equity	90,882		84,369
Real-estate - construction	149,047		142,768
Consumer	2,638		2,624

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

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


	April 26, 2024
	(dollars in thousands)
Book balance of loans with deteriorated credit quality at acquisition	$	1,014,559
Fair value of loans with deteriorated credit quality at acquisition	895,588
Fair value discount	118,971
PCD Loans credit discount	( 54,631 )
Non-credit discount	$	64,340

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

Acquisition-related expenses:

The Corporation developed a comprehensive integration plan under which it is incurring direct costs that are expensed as incurred. For the three months ended, March 31, 2025, these direct costs totaled $380 thousand. Costs related to the Republic First Transaction are included in acquisition-related expenses in the unaudited Consolidated Statements of Income.

Unaudited Pro Forma Information:

Republic First Bank does not have historical financial information on which the Corporation could base pro forma information. Additionally, the Bank did not acquire all of the assets or assume all of the liabilities of Republic First Bank. Therefore, it is impracticable to provide pro forma information on revenues and earnings for the Republic First Transaction in accordance with ASC 805-10-50-2.

NOTE 3 – Restrictions on Cash and Cash Equivalents

Cash collateral is posted by the Corporation with counterparties to secure derivatives and other contracts, which is included in "interest-bearing deposits with other banks" on the Consolidated Balance Sheets. The amounts of such collateral as of March 31, 2025 and December 31, 2024 were $ 15.5 million and $ 4.0 million, respectively.

NOTE 4 – Investment Securities

The following table presents the amortized cost and estimated fair values of investment securities:


	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for Sale	(dollars in thousands)


State and municipal securities	$	958,357	$	—	$	( 166,660 )	$	791,697
Corporate debt securities	294,686		668		( 10,621 )		284,733
Collateralized mortgage obligations	1,005,300		11,448		( 9,900 )		1,006,848
Residential mortgage-backed securities	1,000,882		2,605		( 30,135 )		973,352
Commercial mortgage-backed securities	611,804		—		( 93,391 )		518,413

Total	$	3,871,029	$	14,721	$	( 310,707 )	$	3,575,043

Held to Maturity
Residential mortgage-backed securities	$	640,273	$	1,309	$	( 52,213 )	$	589,369
Commercial mortgage-backed securities	856,007		—		( 135,542 )		720,465
Total	$	1,496,280	$	1,309	$	( 187,755 )	$	1,309,834


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for Sale	(dollars in thousands)


State and municipal securities	$	960,227	$	106	$	( 145,446 )	$	814,887
Corporate debt securities	313,681		1,123		( 14,434 )		300,370
Collateralized mortgage obligations	798,157		4,629		( 13,901 )		788,885
Residential mortgage-backed securities	1,029,846		30		( 40,001 )		989,875
Commercial mortgage-backed securities	617,605		—		( 100,723 )		516,882

Total	$	3,719,516	$	5,888	$	( 314,505 )	$	3,410,899



Held to Maturity
Residential mortgage-backed securities	$	537,856	$	2	$	( 60,162 )	$	477,696
Commercial mortgage-backed securities	857,713		—		( 151,960 )		705,753
Total	$	1,395,569	$	2	$	( 212,122 )	$	1,183,449

In May 2024, the Corporation sold $345.7 million of AFS investment securities and recorded a pre-tax loss of $20.3 million. The proceeds from the sale were reinvested into higher-yielding securities of a similar type and similar duration.

Investment securities carried at $ 0.4 billion and $ 0.3 billion at March 31, 2025 and December 31, 2024, respectively, were pledged as collateral to secure public and trust deposits.

The amortized cost and estimated fair values of debt securities as of March 31, 2025, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because issuers may have the right to call, or borrowers may have the right to prepay, with or without call or prepayment penalties.


		March 31, 2025
		Available for Sale				Held to Maturity
		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due in one year or less		$	13,985	$	13,908	$	—	$	—
Due from one year to five years		105,663		104,052		—		—
Due from five years to ten years		298,517		283,407		—		—
Due after ten years		834,878		675,063		—		—
		1,253,043		1,076,430		—		—
Residential mortgage-backed securities (1)		1,000,882		973,352		640,273		589,369
Commercial mortgage-backed securities (1)		611,804		518,413		856,007		720,465
Collateralized mortgage obligations (1)		1,005,300		1,006,848		—		—
Total		$	3,871,029	$	3,575,043	$	1,496,280	$	1,309,834

(1) Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments on the

underlying loans.

The following table presents information related to gross realized gains and losses on the sales of securities for the periods presented:


	Gross Realized Gains		Gross Realized Losses		Net Gains (Losses)
Three months ended	(dollars in thousands)
March 31, 2025	$	663	$	( 665 )	$	( 2 )
March 31, 2024	—		—		—

The following tables present the gross unrealized losses and estimated fair values of investment securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


	March 31, 2025
	Less than 12 months					12 months or longer					Total
	Number of Securities	Estimated Fair Value		Unrealized Losses		Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses

Available for Sale	(dollars in thousands)


State and municipal securities	19	$	45,225	$	( 2,451 )	277	$	745,510	$	( 164,209 )	$	790,735	$	( 166,660 )
Corporate debt securities	1	9,500		( 500 )		44	251,670		( 10,121 )		261,170		( 10,621 )
Collateralized mortgage obligations	5	115,249		( 999 )		77	83,216		( 8,901 )		198,465		( 9,900 )
Residential mortgage-backed securities	19	404,904		( 3,632 )		69	175,232		( 26,503 )		580,136		( 30,135 )
Commercial mortgage-backed securities	1	19,691		( 415 )		135	498,722		( 92,976 )		518,413		( 93,391 )
Total available for sale	45	$	594,569	$	( 7,997 )	602	$	1,754,350	$	( 302,710 )	$	2,348,919	$	( 310,707 )

Held to Maturity
Residential mortgage-backed securities	6	$	122,777	$	( 117 )	120	$	299,666	$	( 52,096 )	$	422,443	$	( 52,213 )
Commercial mortgage-backed securities	—	—		—		60	720,465		( 135,542 )		720,465		( 135,542 )
Total held to maturity	6	$	122,777	$	( 117 )	180	$	1,020,131	$	( 187,638 )	$	1,142,908	$	( 187,755 )


	December 31, 2024
	Less than 12 months					12 months or longer					Total
	Number of Securities	Estimated Fair Value		Unrealized Losses		Number of Securities	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
Available for Sale	(dollars in thousands)


State and municipal securities	22	$	53,026	$	( 1,692 )	272	$	755,310	$	( 143,754 )	$	808,336	$	( 145,446 )
Corporate debt securities	1	4,844		( 13 )		47	264,099		( 14,421 )		268,943		( 14,434 )
Collateralized mortgage obligations	12	288,871		( 3,463 )		77	85,485		( 10,438 )		374,356		( 13,901 )
Residential mortgage-backed securities	42	777,695		( 9,178 )		69	174,284		( 30,823 )		951,979		( 40,001 )
Commercial mortgage-backed securities	1	19,291		( 875 )		135	497,591		( 99,848 )		516,882		( 100,723 )
Total available for sale	78	$	1,143,727	$	( 15,221 )	600	$	1,776,769	$	( 299,284 )	$	2,920,496	$	( 314,505 )

Held to Maturity

Residential mortgage-backed securities	7	$	155,726	$	( 1,754 )	120	$	303,220	$	( 58,408 )	$	458,946	$	( 60,162 )
Commercial mortgage-backed securities	—	—		—		60	705,753		( 151,960 )		705,753		( 151,960 )
Total held to maturity	7	$	155,726	$	( 1,754 )	180	$	1,008,973	$	( 210,368 )	$	1,164,699	$	( 212,122 )

The Corporation's collateralized mortgage obligations, residential mortgage-backed securities and commercial mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. The change in fair value of these securities is attributable to changes in interest rates and not credit quality. In addition, these securities have principal payments that are guaranteed by U.S. government-sponsored agencies. Therefore, the Corporation did not record an ACL for these securities as of March 31, 2025 and December 31, 2024. The Corporation does not have the intent to sell, and does not believe it will more likely than not be required to sell, any of these securities prior to a recovery of their fair value to amortized cost.

Based on the payment status and management's evaluation of the Corporation's state and municipal securities, no ACL was required for these securities as of March 31, 2024 and December 31, 2024. The Corporation does not have the intent to sell, and does not believe it will more likely than not be required to sell, any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

The majority of the corporate debt securities were rated at or above investment grade as of March 31, 2025 and December 31, 2024. Based on the payment status, rating and management's evaluation of these securities, no ACL was required for corporate debt securities as of March 31, 2025 and December 31, 2024. The Corporation does not have the intent to sell, and does not believe it will more likely than not to be required to sell, any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

NOTE 5 - Loans and Allowance for Credit Losses

Loans and leases, net of unearned income

Loans and leases, net of unearned income, are summarized as follows:


	March 31, 2025		December 31, 2024
	(dollars in thousands)
Real estate - commercial mortgage	$	9,676,517	$	9,601,858
Commercial and industrial (1)	4,531,266		4,605,589
Real-estate - residential mortgage	6,409,657		6,349,643
Real-estate - home equity	1,170,470		1,160,616
Real-estate - construction	1,175,445		1,394,899
Consumer	597,305		616,856
Leases and other loans (2)	301,914		315,458
Net loans	$	23,862,574	$	24,044,919

(1) Includes no unearned income at March 31, 2025 and December 31, 2024.

(2) Includes unearned income of $ 35.9 million and $ 35.6 million as of March 31, 2025 and December 31, 2024, respectively.

Allowance for Credit Losses

The ACL consists of reserves against loans that have been 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 by charges to expense, through the provision for credit losses, and decreased 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.

The following table summarizes the ACL - loans balance and the reserve for OBS credit exposures balance:



	March 31, 2025		December 31, 2024
	(dollars in thousands)
ACL - loans	$	379,677	$	379,156

Reserve for OBS credit exposures (1)	$	14,947	$	14,161

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

The following table presents the activity in the ACL - loans balances:


	Three months ended March 31
	2025		2024
	(dollars in thousands)
Balance at beginning of period	$	379,156	$	293,404


Loans charged off	( 20,034 )		( 10,952 )
Recoveries of loans previously charged off	7,443		2,354
Net loans (charged off) recovered	( 12,591 )		( 8,598 )
Provision for credit losses (1) (2)	13,112		13,082
Balance at end of period	$	379,677	$	297,888
Provision for OBS credit exposures (1)	$	786	$	( 2,157 )
Reserve for OBS credit exposures	$	14,947	$	15,097

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

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

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


	Real Estate Commercial Mortgage		Commercial and Industrial		Real Estate Residential Mortgage		Consumer and Real Estate - Home Equity		Real Estate Construction		Leases and other loans		Total
	(dollars in thousands)
Three months ended March 31, 2025
Balance at December 31, 2024	$	158,181	$	92,212	$	81,331	$	19,397	$	25,140	$	2,895	$	379,156


Loans charged off	( 12,106 )		( 3,865 )		( 343 )		( 2,193 )		—		( 1,527 )		( 20,034 )
Recoveries of loans previously charged off	374		5,952		174		660		82		201		7,443
Net loans (charged off) recovered	( 11,732 )		2,087		( 169 )		( 1,533 )		82		( 1,326 )		( 12,591 )
Provision for loan losses (1) (2)	15,697		2,552		1,254		1,430		( 9,322 )		1,501		13,112
Balance at March 31, 2025	$	162,146	$	96,851	$	82,416	$	19,294	$	15,900	$	3,070	$	379,677
Three months ended March 31, 2024
Balance at December 31, 2023	$	112,565	$	74,266	$	73,286	$	17,604	$	12,295	$	3,388	$	293,404


Loans charged off	( 26 )		( 7,632 )		( 251 )		( 2,238 )		—		( 805 )		( 10,952 )
Recoveries of loans previously charged off	152		1,248		116		676		—		162		2,354
Net loans (charged off) recovered	126		( 6,384 )		( 135 )		( 1,562 )		—		( 643 )		( 8,598 )
Provision for loan and lease losses (1) (2)	1,801		9,001		65		646		671		898		13,082
Balance at March 31, 2024	$	114,492	$	76,883	$	73,216	$	16,688	$	12,966	$	3,643	$	297,888

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

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

The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative models. In determining qualitative adjustments, management considers changes in national, regional, and local economic and business conditions and their impact on the lending environment, including underwriting standards and other factors affecting credit losses over the remaining life of each loan.

Collateral-Dependent Loans

A loan or a lease is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans and leases deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent loans or leases consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging, agricultural land, and vacant land. Commercial and industrial loans may also be secured by real estate.

All loans individually evaluated for impairment are measured for losses on a quarterly basis. As of March 31, 2025 and December 31, 2024, substantially all of the Corporation's individually evaluated loans with total commitments greater than or equal to $ 1.0 million were measured based on the estimated fair value of each loan’s collateral, if any.

As of March 31, 2025 and December 31, 2024, approximately 97 % and 90 %, respectively, of loans evaluated individually for impairment with principal balances greater than or equal to $ 1.0 million, whose primary collateral consisted of real estate, were measured at estimated fair value using appraisals performed by state certified third-party appraisers that had been updated in the preceding 12 months.

Non-accrual Loans

The following table presents total non-accrual loans, by class segment:


	March 31, 2025						December 31, 2024
	With a Related Allowance		Without a Related Allowance		Total		With a Related Allowance		Without a Related Allowance		Total
	(dollars in thousands)
Real estate - commercial mortgage	$	41,134	$	45,394	$	86,528	$	31,654	$	67,843	$	99,497
Commercial and industrial	16,005		18,564		34,569		17,011		25,206		42,217
Real estate - residential mortgage	25,223		2,003		27,226		23,387		2,013		25,400
Real estate - home equity	8,051		73		8,124		8,513		78		8,591
Real estate - construction	3,666		—		3,666		1,746		—		1,746
Consumer	7		—		7		8		—		8
Leases and other loans	186		2,120		2,306		1,801		10,033		11,834
	$	94,272	$	68,154	$	162,426	$	84,120	$	105,173	$	189,293

As of March 31, 2025 and December 31, 2024, there were $ 68.2 million and $ 105.2 million, respectively, of non-accrual loans that did not have a specific valuation allowance within the ACL. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

Asset Quality

Maintaining an appropriate ACL is dependent on various factors, including the ability to identify potential problem loans in a timely manner. For commercial construction loans, commercial and industrial loans, and commercial real estate loans, an internal risk rating process is used. The Corporation believes that internal risk ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal risk categories is a significant component of the ACL methodology for these loans, which bases the PD on this migration. Assigning risk ratings involves judgment. The Corporation's loan review officers provide a separate assessment of risk rating accuracy. Risk ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff, or if specific loan review assessments identify a deterioration or an improvement in a loan.

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


		March 31, 2025
		(dollars in thousands)
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
														Amortized		Amortized
		2025		2024		2023		2022		2021		Prior		Cost Basis		Cost Basis		Total
Real estate - commercial mortgage
	Pass	$	112,253	$	632,213	$	1,038,464	$	1,200,259	$	1,275,597	$	4,297,847	$	67,023	$	249	$	8,623,905
	Special Mention	—		9,329		59,490		132,421		189,465		140,269		1,830		—		532,804
	Substandard or Lower	—		7,923		66,689		88,510		82,154		273,285		1,247		—		519,808
	Total real estate - commercial mortgage	112,253		649,465		1,164,643		1,421,190		1,547,216		4,711,401		70,100		249		9,676,517
Real estate - commercial mortgage
	Current period gross charge-offs	—		—		—		( 6,654 )		( 4,052 )		( 1,400 )		—		—		( 12,106 )
Commercial and industrial
	Pass	130,095		404,571		460,061		488,461		242,892		933,896		1,300,171		3,233		3,963,380
	Special Mention	282		15,502		23,680		15,677		10,993		28,846		117,361		2,579		214,920
	Substandard or Lower	200		11,665		21,861		26,596		11,445		89,598		182,597		9,004		352,966
	Total commercial and industrial	130,577		431,738		505,602		530,734		265,330		1,052,340		1,600,129		14,816		4,531,266
Commercial and industrial
	Current period gross charge-offs	—		( 88 )		( 473 )		( 2,000 )		( 557 )		( 502 )		( 245 )		—		( 3,865 )
Real estate - construction (1)
	Pass	4,001		228,789		360,022		88,125		37,139		41,753		33,131		—		792,960
	Special Mention	—		—		10,615		57,540		26,426		1,189		—		—		95,770
	Substandard or Lower	—		—		—		29,993		2,909		21,865		101		—		54,868
	Total real estate - construction	4,001		228,789		370,637		175,658		66,474		64,807		33,232		—		943,598
Real estate - construction (1)
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Pass	246,349		1,265,573		1,858,547		1,776,845		1,555,628		5,273,496		1,400,325		3,482		13,380,245
	Special Mention	282		24,831		93,785		205,638		226,884		170,304		119,191		2,579		843,494
	Substandard or Lower	200		19,588		88,550		145,099		96,508		384,748		183,945		9,004		927,642
	Total	$	246,831	$	1,309,992	$	2,040,882	$	2,127,582	$	1,879,020	$	5,828,548	$	1,703,461	$	15,065	$	15,151,381

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

For a description of the Corporation's internal risk rating categories, see "Note 1 - Summary of Significant Accounting Policies" under the heading "Allowance for Credit Losses" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.

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


		December 31, 2024
		(dollars in thousands)
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
														Amortized		Amortized
		2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Real estate - commercial mortgage
	Pass	$	623,742	$	898,296	$	1,138,669	$	1,316,000	$	1,077,625	$	3,414,138	$	69,942	$	9,646	$	8,548,058
	Special Mention	4,441		73,348		149,280		157,543		28,734		107,099		10,978		—		531,423
	Substandard or Lower	4,831		44,665		102,952		95,617		75,097		193,922		1,380		3,913		522,377
	Total real estate - commercial mortgage	633,014		1,016,309		1,390,901		1,569,160		1,181,456		3,715,159		82,300		13,559		9,601,858
Real estate - commercial mortgage
	Current period gross charge-offs	—		( 126 )		( 84 )		—		—		( 12,950 )		—		( 26 )		( 13,186 )
Commercial and industrial
	Pass	435,917		486,720		512,622		261,603		268,194		684,931		1,375,201		6,346		4,031,534
	Special Mention	9,928		8,333		19,931		18,888		4,844		58,632		117,940		313		238,809
	Substandard or Lower	10,795		16,593		34,748		10,183		12,496		49,439		176,755		24,237		335,246
	Total commercial and industrial	456,640		511,646		567,301		290,674		285,534		793,002		1,669,896		30,896		4,605,589
Commercial and industrial
	Current period gross charge-offs	( 612 )		( 3,709 )		( 2,560 )		( 4,587 )		( 317 )		( 7,612 )		( 3,553 )		( 3,635 )		( 26,585 )
Real estate - construction (1)
	Pass	197,206		494,072		157,296		37,438		8,784		41,480		30,608		619		967,503
	Special Mention	—		10,612		80,651		69,109		938		—		—		—		161,310
	Substandard or Lower	—		—		14,407		10,399		—		20,350		121		1,906		47,183
	Total real estate - construction	197,206		504,684		252,354		116,946		9,722		61,830		30,729		2,525		1,175,996
Real estate - construction (1)
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Pass	1,256,865		1,879,088		1,808,587		1,615,041		1,354,603		4,140,549		1,475,751		16,611		13,547,095
	Special Mention	14,369		92,293		249,862		245,540		34,516		165,731		128,918		313		931,542
	Substandard or Lower	15,626		61,258		152,107		116,199		87,593		263,711		178,256		30,056		904,806
	Total	$	1,286,860	$	2,032,639	$	2,210,556	$	1,976,780	$	1,476,712	$	4,569,991	$	1,782,925	$	46,980	$	15,383,443

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

The Corporation considers the performance of the loan portfolio and its impact on the ACL. The Corporation does not assign internal risk ratings to smaller balance, homogeneous loans, such as home equity loans, residential mortgage loans, construction loans to individuals secured by residential real estate, consumer and other loans. For these loans, the most relevant credit quality indicator is delinquency status and the Corporation evaluates credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, for the periods shown:


		March 31, 2025
		(dollars in thousands)
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
														Amortized		Amortized
		2025		2024		2023		2022		2021		Prior		Cost Basis		Cost Basis		Total
Real estate - residential mortgage
	Performing	$	111,293	$	482,878	$	736,896	$	1,499,902	$	1,704,694	$	1,827,116	$	—	$	—	$	6,362,779
	Non-performing	—		91		1,941		9,133		2,889		32,824		—		—		46,878
	Total real estate - residential mortgage	111,293		482,969		738,837		1,509,035		1,707,583		1,859,940		—		—		6,409,657
Real estate - residential mortgage
	Current period gross charge-offs	—		( 19 )		( 7 )		( 121 )		—		( 196 )		—		—		( 343 )
Consumer and real estate - home equity
	Performing	158,049		32,957		95,148		157,474		41,167		205,800		1,055,160		9,337		1,755,092
	Non-performing	—		241		239		982		772		6,552		2,751		1,146		12,683
	Total consumer and real estate - home equity	158,049		33,198		95,387		158,456		41,939		212,352		1,057,911		10,483		1,767,775
Consumer and real estate - home equity
	Current period gross charge-offs	—		( 96 )		( 537 )		( 536 )		( 333 )		( 836 )		145		—		( 2,193 )
Leases and other loans
	Performing	74,672		66,439		84,668		41,516		14,776		17,270		—		—		299,341
	Non-performing	—		—		162		1,760		605		46		—		—		2,573
	Leases and other loans	74,672		66,439		84,830		43,276		15,381		17,316		—		—		301,914
Leases and other loans
	Current period gross charge-offs	( 404 )		( 428 )		( 172 )		( 100 )		( 53 )		( 370 )		—		—		( 1,527 )
Construction - residential
	Performing	28,443		164,310		29,708		7,980		—		—		—		—		230,441
	Non-performing	—		—		—		1,406		—		—		—		—		1,406
	Total construction - residential	28,443		164,310		29,708		9,386		—		—		—		—		231,847
Construction - residential
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Performing	372,457		746,584		946,420		1,706,872		1,760,637		2,050,186		1,055,160		9,337		8,647,653
	Non-performing	—		332		2,342		13,281		4,266		39,422		2,751		1,146		63,540
	Total	$	372,457	$	746,916	$	948,762	$	1,720,153	$	1,764,903	$	2,089,608	$	1,057,911	$	10,483	$	8,711,193


		December 31, 2024
		(dollars in thousands)
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
														Amortized		Amortized
		2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Real estate - residential mortgage
	Performing	$	470,918	$	728,630	$	1,515,521	$	1,726,991	$	1,022,116	$	839,566	$	—	$	—	$	6,303,742
	Non-performing	87		1,358		5,118		3,232		5,523		30,583		—		—		45,901
	Total real estate - residential mortgage	471,005		729,988		1,520,639		1,730,223		1,027,639		870,149		—		—		6,349,643
Real estate - residential mortgage
	Current period gross charge-offs	—		( 172 )		( 106 )		( 12 )		( 43 )		( 888 )		—		( 251 )		( 1,472 )
Consumer and Real estate - home equity
	Performing	178,722		116,370		211,647		65,412		48,201		188,442		913,920		40,384		1,763,098
	Non-performing	236		848		918		963		753		4,571		2,893		3,192		14,374
	Total consumer and real estate - home equity	178,958		117,218		212,565		66,375		48,954		193,013		916,813		43,576		1,777,472
Consumer and Real estate - home equity
	Current period gross charge-offs	( 118 )		( 1,016 )		( 1,552 )		( 790 )		( 398 )		( 2,704 )		( 75 )		( 1,837 )		( 8,490 )
Leases and other loans
	Performing	123,991		89,006		52,724		16,894		10,830		9,996		—		—		303,441
	Non-performing	—		—		1,922		744		23		9,328		—		—		12,017
	Leases and other loans	123,991		89,006		54,646		17,638		10,853		19,324		—		—		315,458
Leases and other loans
	Current period gross charge-offs	( 1,977 )		( 913 )		( 335 )		( 334 )		( 192 )		( 770 )		—		( 175 )		( 4,696 )
Construction - residential
	Performing	138,440		61,848		15,710		1,499		—		—		—		—		217,497
	Non-performing	—		—		1,406		—		—		—		—		—		1,406
	Total construction - residential	138,440		61,848		17,116		1,499		—		—		—		—		218,903
Construction - residential
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Performing	912,071		995,854		1,795,602		1,810,796		1,081,147		1,038,004		913,920		40,384		8,587,778
	Non-performing	323		2,206		9,364		4,939		6,299		44,482		2,893		3,192		73,698
	Total	$	912,394	$	998,060	$	1,804,966	$	1,815,735	$	1,087,446	$	1,082,486	$	916,813	$	43,576	$	8,661,476

The following table presents non-performing assets:


	March 31, 2025		December 31, 2024
	(dollars in thousands)
Non-accrual loans	$	162,426	$	189,293
Loans 90 days or more past due and still accruing	34,367		30,781
Total non-performing loans	196,793		220,074
OREO (1)	2,193		2,621
Total non-performing assets	$	198,986	$	222,695

(1) Excludes $ 16.5 million and $ 17.5 million of residential mortgage properties for which formal foreclosure proceedings were in process as of March 31,

2025 and December 31, 2024, respectively.

The following tables present the aging of the amortized cost basis of loans, by class segment:


	30-59		60-89		≥ 90 Days
	Days Past		Days Past		Past Due		Non-
	Due		Due		and Accruing		Accrual		Current		Total
	(dollars in thousands)
March 31, 2025
Real estate - commercial mortgage	$	37,443	$	20,827	$	1,553	$	86,528	$	9,530,166	$	9,676,517
Commercial and industrial (1)	10,622		8,747		8,344		34,569		4,468,984		4,531,266
Real estate - residential mortgage	38,253		6,369		19,652		27,226		6,318,157		6,409,657
Real estate - home equity	7,905		916		3,461		8,124		1,150,064		1,170,470
Real estate - construction	25,891		499		—		3,666		1,145,389		1,175,445
Consumer	5,537		1,977		1,090		7		588,694		597,305
Leases and other loans (1)	361		142		267		2,306		298,838		301,914
Total	$	126,012	$	39,477	$	34,367	$	162,426	$	23,500,292	$	23,862,574

(1) Includes unearned income.


	30-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Current		Total
	(dollars in thousands)
December 31, 2024
Real estate - commercial mortgage	$	32,715	$	16,684	$	2,862	$	99,497	$	9,450,100	$	9,601,858
Commercial and industrial (1)	6,031		3,636		1,460		42,217		4,552,245		4,605,589
Real estate - residential mortgage	59,593		5,946		20,501		25,400		6,238,203		6,349,643
Real estate - home equity	6,778		1,057		4,758		8,591		1,139,432		1,160,616
Real estate - construction	3,549		5,163		—		1,746		1,384,441		1,394,899
Consumer	6,779		1,627		1,017		8		607,425		616,856
Leases and other loans (1)	269		105		183		11,834		303,067		315,458
Total	$	115,714	$	34,218	$	30,781	$	189,293	$	23,674,913	$	24,044,919

(1) Includes unearned income.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Corporation modifies loans by providing a concession when deemed appropriate. Depending on the circumstances, a term extension, interest rate reduction or principal forgiveness may be granted. In certain instances, a combination of concessions may be provided to a borrower.

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

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


	Term Extension
	Three months ended March 31, 2025				Three months ended March 31, 2024
	Amortized Cost Basis		% of Class of Financing Receivable		Amortized Cost Basis		% of Class of Financing Receivable
	(dollars in thousands)
Three months ended March 31
Real estate - commercial mortgage	$	111	—	%	$	—	—	%
Commercial and industrial	3,937		0.09		—		—
Real estate - residential mortgage	2,400		0.04		2,717		0.05
Real estate - home equity	467		0.04		—		—
Real estate - construction	—		—		455		0.04

Total	$	6,915			$	3,172


	Interest Rate Reduction and Term Extension
	Three months ended March 31, 2025				Three months ended March 31, 2024
	Amortized Cost Basis		% of Class of Financing Receivable		Amortized Cost Basis		% of Class of Financing Receivable
	(dollars in thousands)
Three months ended March 31


Real estate - residential mortgage	$	1,389	0.02	%	$	465	0.01	%



Total	$	1,389			$	465

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

Term Extension

Financial Effect

Three months ended March 31, 2025

Real estate - commercial mortgage

Added a weighted-average 1.00 year to the life of loans, which reduced monthly payment amounts for the borrowers.

Commercial and industrial

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

Real estate - residential mortgage

Added a weighted-average 8.78 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - home equity

Added a weighted-average 9.27 years to the life of loans, which reduced monthly payment amounts for borrowers.

Three months ended March 31, 2024

Real estate - residential mortgage

Added a weighted-average 6.27 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - construction

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


			Interest Rate Reduction
			Financial Effect
Three months ended March 31, 2025
Real estate - residential mortgage			Reduced weighted-average interest rate from 4.27 % to 2.27 %

Three months ended March 31, 2024
Real estate - residential mortgage			Reduced weighted-average interest rate from 4.37 % to 2.71 %

During the three months ended March 31, 2025 and 2024, there were no loans modified due to financial difficulty where there was a principal balance forgiveness.

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


			30-89		90+		Total
			Days Past		Past Due		Past
	Current		Due		and Accruing		Due
March 31, 2025	(dollars in thousands)
Real estate - commercial mortgage	$	20,495	$	—	$	—	$	—
Commercial and industrial	3,937		3,000		—		3,000
Real estate - residential mortgage	10,573		2,493		1,266		3,759
Real estate - home equity	821		—		—		—



Total	$	35,826	$	5,493	$	1,266	$	6,759

There were no commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as of March 31, 2025.

NOTE 6 – Mortgage Servicing Rights

The following table summarizes the changes in MSRs, which are included in other assets on the Consolidated Balance Sheets, with adjustments to the carrying value included in mortgage banking income on the Consolidated Statements of Income:


	Three months ended March 31
	2025		2024
	(dollars in thousands)
Amortized cost:
Balance at beginning of period	$	30,691	$	31,602
Originations of MSRs	701		582
Amortization	( 1,094 )		( 1,127 )
Balance at end of period	$	30,298	$	31,057







Estimated fair value of MSRs at end of period	$	51,277	$	51,191

MSRs represent the economic value of contractual rights to service mortgage loans that have been sold. The total portfolio of mortgage loans serviced by the Corporation for unrelated third parties was $ 4.1 billion as of March 31, 2025 and December 31, 2024. Actual and expected prepayments of the underlying mortgage loans can impact the fair values of the MSRs. The Corporation accounts for MSRs at the lower of amortized cost or fair value.

The fair value of MSRs is estimated by discounting the estimated cash flows from servicing income, net of expense, over the expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is

based on the contractual terms of the loans, as adjusted for prepayment projections. The fair values of MSRs were $ 51.3 million and $ 54.0 million as of March 31, 2025 and December 31, 2024, respectively. Based on its fair value analysis as of March 31, 2025, the Corporation determined that no valuation allowance was required as of March 31, 2025.

NOTE 7 – Derivative Financial Instruments

The Corporation uses derivatives to manage its exposure to certain market risks, including interest rate and foreign currency risks, and to assist customers with their risk management objectives. 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.

For additional information on our derivative accounting policies see "Note 1 - Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2024.

The following table presents a summary of the notional amounts and fair values of derivative financial instruments:


	March 31, 2025				December 31, 2024
	Notional Amount		Asset (Liability) Fair Value		Notional Amount		Asset (Liability) Fair Value
	(dollars in thousands)
Interest Rate Locks with Customers
Positive fair values	$	212,169	$	852	$	171,933	$	389
Negative fair values	668		( 2 )		3,888		( 58 )

Forward Commitments
Positive fair values	—		—		51,250		363
Negative fair values	44,185		( 471 )		—		—

Interest Rate Derivatives with Customers (1)
Positive fair values	1,275,789		24,899		767,905		8,480
Negative fair values	3,454,753		( 183,590 )		3,976,294		( 239,058 )

Interest Rate Derivatives with Dealer Counterparties
Positive fair values	3,454,753		110,551		3,976,294		150,480
Negative fair values	1,275,789		( 25,265 )		767,905		( 10,734 )

Interest Rate Derivatives used in Cash Flow Hedges
Positive fair values	2,250,000		4,011		2,500,000		227
Negative fair values	1,150,000		( 537 )		1,400,000		( 2,971 )
Foreign Exchange Contracts with Customers
Positive fair values	14,517		245		28,327		1,619
Negative fair values	12,352		( 393 )		693		( 27 )

Foreign Exchange Contracts with Correspondent Banks
Positive fair values	17,903		528		4,059		63
Negative fair values	12,100		( 182 )		32,406		( 1,569 )

(1) Fair values are net of a valuation allowance of $366.3 thousand as of March 31, 2025 and December 31, 2024.

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


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

Three months ended March 31, 2025
Interest Rate Products	$	3,541	$	3,541	$	—	Interest Income	$	( 4,491 )	$	( 4,491 )	$	—
Interest Rate Products	( 1,260 )		( 1,260 )		—		Interest Expense	( 53 )		( 53 )		—
Total	$	2,281	$	2,281	$	—		$	( 4,544 )	$	( 4,544 )	$	—

Three months ended March 31, 2024
Interest Rate Products	$	( 5,659 )	$	( 5,659 )	—		Interest Income	$	( 7,032 )	$	( 7,032 )	—
Interest Rate Products	11,215		11,215		—		Interest Expense	2,020		2,020		—
Total	$	5,556	$	5,556	—			$	( 5,012 )	$	( 5,012 )	—

The following table presents the effect of fair value and cash flow hedge accounting on the income statement:




	Consolidated Statements of Income Classification
	2025				2024
	Interest Income		Interest Expense		Interest Income		Interest Expense
	(dollars in thousands)
Three months ended March 31
Total amounts of income line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded	$	( 4,491 )	$	( 53 )	$	( 7,032 )	$	2,020


The effects of fair value and cash flow hedging:
Amount of (loss) gain reclassified from AOCI into income	( 4,491 )		( 53 )		( 7,032 )		2,020
Interest rate derivatives:
Amount of (loss) gain reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring	—		—		—		—
Amount of (loss) gain reclassified from AOCI into income - included component	( 4,491 )		( 53 )		( 7,032 )		2,020
Amount of (loss) gain reclassified from AOCI into income - excluded component	—		—		—		—

During the next twelve months, the Corporation estimates that an additional $ 16.3 million will be reclassified as a decrease to net interest income.

The following table presents the fair value gains (losses) on derivative financial instruments:


	Consolidated Statements of Income Classification	Three months ended March 31
		2025		2024
		(dollars in thousands)
Mortgage banking derivatives (1)	Mortgage banking income	$	802	$	1,167

Interest rate derivatives	Other income	149		151

Foreign exchange contracts	Other income	170		39

Net fair value gains (losses) on derivative financial instruments		$	1,121	$	1,357

(1) Includes interest rate locks with customers and forward commitments.

The Corporation has elected to measure mortgage loans held for sale at fair value. The following table presents mortgage loans held for sale and the impact of the fair value election on the Consolidated Financial Statements:


	March 31, 2025		December 31, 2024
	(dollars in thousands)
Amortized cost (1)	$	15,637	$	25,316
Fair value	15,965		25,618

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

Gains and losses related to changes in fair values of mortgage loans held for sale were a gain of $ 25.7 thousand for the three months ended March 31, 2025 compared to a loss of $ 0.2 million for the three months ended March 31, 2024. Gains and losses are recorded on the Consolidated Income Statements as adjustments to mortgage banking income.

Balance Sheet Offsetting

The fair values of interest rate derivative agreements and foreign exchange contracts the Corporation enters into with customers and dealer counterparties may be eligible for offset on the Consolidated Balance Sheets if they are subject to master netting arrangements or similar agreements. The Corporation has elected to net its financial assets and liabilities designated as interest rate derivatives when offsetting is permitted. The following table presents the Corporation's financial instruments that are eligible for offset, and the effects of offsetting, on the Consolidated Balance Sheets:


	Gross Amounts		Gross Amounts Not Offset
	Recognized		on the Consolidated
	on the		Balance Sheets
	Consolidated		Financial		Cash		Net
	Balance Sheets		Instruments (1)		Collateral (2)		Amount
	(dollars in thousands)
March 31, 2025
Interest rate derivative assets	$	139,461	$	( 16,003 )	$	—	$	123,458

Foreign exchange derivative assets with correspondent banks	528		( 528 )		—		—
Total	$	139,989	$	( 16,531 )	$	—	$	123,458

Interest rate derivative liabilities	$	209,392	$	( 19,477 )	$	( 72,464 )	$	117,451

Foreign exchange derivative liabilities with correspondent banks	182		( 528 )		—		( 346 )
Total	$	209,574	$	( 20,005 )	$	( 72,464 )	$	117,105

December 31, 2024
Interest rate derivative assets	$	159,187	$	( 12,739 )	$	—	$	146,448
Foreign exchange derivative assets with correspondent banks	63		( 63 )		—		—
Total	$	159,250	$	( 12,802 )	$	—	$	146,448

Interest rate derivative liabilities	$	252,763	$	( 9,995 )	$	( 94,339 )	$	148,429
Foreign exchange derivative liabilities with correspondent banks	1,569		( 63 )		—		1,506
Total	$	254,332	$	( 10,058 )	$	( 94,339 )	$	149,935

(1) For interest rate derivative assets, amounts represent any derivative liability fair values that could be offset in the event of counterparty or customer default.

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

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

contracts with financial institution counterparties. Interest rate derivatives with customers are collateralized by the same collateral securing the underlying

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

Cash Flow Hedge Terminations

In October 2024, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $ 250.0 million. As the hedged transaction continues to be probable, the unrealized losses will be recorded in AOCI and will be recognized as an increase to interest expense when the previously forecasted hedged items affect earnings in future periods. During the three months ended March 31, 2025, $ 0.2 million of these unrealized losses were reclassified as an increase to interest expense on borrowings on the Consolidated Statements of Income. During the year ended December 31, 2024, $ 0.2 million of these unrealized losses were reclassified as an increase to interest expense on borrowings on the Consolidated Statements of Income.

In January 2023, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $ 1.0 billion. As the hedged transaction continues to be probable, the unrealized losses that have been recorded in AOCI are recognized as a reduction to interest income, including fees, when the previously forecasted hedged item affects earnings in future periods. During the three months ended March 31, 2025, $ 3.3 million of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the Consolidated Statements of Income. During the year ended December 31, 2024, $ 27.9 million of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the Consolidated Statements of Income.

NOTE 8 – Accumulated Other Comprehensive (Loss) Income

The following table presents the components of OCI:


	Before-Tax Amount		Tax Effect		Net of Tax Amount
	(dollars in thousands)
Three months ended March 31, 2025
Net unrealized gains on investment securities (1)	$	12,630	$	( 2,861 )	$	9,769
Reclassification adjustment for investment securities net change included in net income (2)	2		—		2
Amortization of net unrealized gains (losses) on AFS investment securities transferred to HTM (2)	1,716		( 388 )		1,328
Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in cash flow hedges	2,281		( 517 )		1,764
Reclassification adjustment for net change realized in net income on interest rate derivatives used in cash flow hedges	4,544		( 1,029 )		3,515
Amortization of net unrecognized pension and postretirement items (3)	( 136 )		30		( 106 )
Total Other Comprehensive Income	$	21,037	$	( 4,765 )	$	16,272

Three months ended March 31, 2024
Net unrealized losses on investment securities (1)	$	( 21,546 )	$	4,881	$	( 16,665 )

Amortization of net unrealized gains (losses) on AFS investment securities transferred to HTM (2)	1,793		( 406 )		1,387
Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in cash flow hedges	5,556		( 1,259 )		4,297
Reclassification adjustment for net change realized in net income on interest rate derivatives used in cash flow hedges	5,012		( 1,113 )		3,899
Amortization of net unrecognized pension and postretirement items (3)	( 135 )		29		( 106 )
Total Other Comprehensive Loss	$	( 9,320 )	$	2,132	$	( 7,188 )

(1) Amounts reclassified out of AOCI. Before-tax amounts included in "Investment securities (losses) gains, net" on the Consolidated Statements of Income.

(2) Amounts reclassified out of AOCI. Before-tax amounts included as a reduction to "Interest Income - Investment Securities" in on the Consolidated

Statements of Income.

(3) Amounts reclassified out of AOCI. Before-tax amounts included in "Salaries and employee benefits" on the Consolidated Statements of Income.

The following table presents changes in each component of AOCI, net of tax:


	Unrealized Gains (Losses) on Investment Securities		Net Unrealized Gain (Loss) on Interest Rate Derivatives used in Cash Flow Hedges		Unrecognized Pension and Postretirement Plan Income (Costs)		Total
	(dollars in thousands)
Three months ended March 31, 2025
Balance at December 31, 2024	$	( 275,989 )	$	( 16,052 )	$	4,222	$	( 287,819 )
OCI before reclassifications	9,769		1,764		—		11,533
Amounts reclassified from AOCI	2		3,515		( 106 )		3,411
Amortization of net unrealized gains (losses) on AFS investment securities transferred to HTM	1,328		—		—		1,328

Balance at March 31, 2025	$	( 264,890 )	$	( 10,773 )	$	4,116	$	( 271,547 )

Three months ended March 31, 2024
Balance at December 31, 2023	$	( 274,862 )	$	( 34,783 )	$	( 2,635 )	$	( 312,280 )
OCI before reclassifications	( 16,665 )		4,297		—		( 12,368 )
Amounts reclassified from AOCI	—		3,899		( 106 )		3,793
Amortization of net unrealized gains (losses) on AFS investment securities transferred to HTM	1,387		—		—		1,387

Balance at March 31, 2024	$	( 290,140 )	$	( 26,587 )	$	( 2,741 )	$	( 319,468 )

NOTE 9 – Fair Value Measurements

FASB ASC Topic 820 establishes a fair value hierarchy for the inputs to valuation techniques used to measure assets and liabilities at fair value using the following three categories (from highest to lowest priority):

• Level 1 – Inputs that represent quoted prices for identical instruments in active markets.

• Level 2 – Inputs that represent quoted prices for similar instruments in active markets or quoted prices for identical instruments in non-active markets. Also includes valuation techniques whose inputs are derived principally from observable market data other than quoted prices, such as interest rates or other market-corroborated means.

• Level 3 – Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

All assets and liabilities measured at fair value on both a recurring and nonrecurring basis have been categorized into the above three levels. The following tables present assets and liabilities measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets:


	March 31, 2025
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Loans held for sale	$	—	$	15,965	$	—	$	15,965
AFS investment securities:


State and municipal securities	—		791,697		—		791,697
Corporate debt securities	—		284,733		—		284,733
Collateralized mortgage obligations	—		1,006,848		—		1,006,848
Residential mortgage-backed securities	—		973,352		—		973,352
Commercial mortgage-backed securities	—		518,413		—		518,413
Total AFS investment securities	—		3,575,043		—		3,575,043
Other assets:
Investments held in Rabbi Trust	35,307		—		—		35,307
Derivative assets	773		140,313		—		141,086
Total assets	$	36,080	$	3,731,321	$	—	$	3,767,401
Other liabilities:
Deferred compensation liabilities	$	35,307	$	—	$	—	$	35,307
Derivative liabilities	575		209,865		—		210,440
Total liabilities	$	35,882	$	209,865	$	—	$	245,747


	December 31, 2024
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Loans held for sale	$	—	$	25,618	$	—	$	25,618
AFS investment securities:



State and municipal securities	—		814,887		—		814,887
Corporate debt securities	—		300,370		—		300,370
Collateralized mortgage obligations	—		788,885		—		788,885
Residential mortgage-backed securities	—		989,875		—		989,875
Commercial mortgage-backed securities	—		516,882		—		516,882

Total AFS investment securities	—		3,410,899		—		3,410,899
Other assets:
Investments held in Rabbi Trust	35,093		—		—		35,093
Derivative assets	1,682		159,939		—		161,621
Total assets	$	36,775	$	3,596,456	$	—	$	3,633,231
Other liabilities:
Deferred compensation liabilities	$	35,093	$	—	$	—	$	35,093
Derivative liabilities	1,596		252,821		—		254,417
Total liabilities	$	36,689	$	252,821	$	—	$	289,510

The valuation techniques used to measure fair value for the items in the preceding tables are as follows:

Loans held for sale – This category includes mortgage loans held for sale that are measured at fair value. Fair values as of March 31, 2025 and December 31, 2024 were measured at the price that secondary market investors were offering for loans with similar characteristics.

AFS investment securities – Included in this asset category are debt securities. Level 2 investment securities are valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics. Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing.

Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, including market research publications. For certain security types, additional inputs may be used or some of the standard market inputs may not be applicable.

• State and municipal securities/Collateralized mortgage obligations/Residential mortgage-backed securities/Commercial mortgage-backed securities – These debt securities are classified as Level 2. Fair values are determined by a third-party pricing service, as detailed above.

• Corporate debt securities – These securities are classified as Level 2. This category consists of subordinated debt and senior debt issued by financial institutions ($ 277.5 million at March 31, 2025 and $ 293.1 million at December 31, 2024) and other corporate debt issued by non-financial institutions ($ 7.2 million and $ 7.3 million at March 31, 2025 and December 31, 2024, respectively). The fair values for these corporate debt securities are determined by a third-party pricing service as detailed above.

Investments held in Rabbi Trust – This category consists of mutual funds that are held in trust for employee deferred compensation plans that the Corporation has elected to measure at fair value. Shares of mutual funds are valued based on net asset value, which represent quoted market prices for the underlying shares held in the mutual funds, and as such, are classified as Level 1.

Derivative assets – Fair value of foreign currency exchange contracts are classified as Level 1 assets ($ 0.8 million and $ 1.7 million at March 31, 2025 and December 31, 2024, respectively). The foreign exchange prices used to measure these items at fair value are based on quoted prices for identical instruments in active markets.

Level 2 assets represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors ($ 0.9 million at March 31, 2025 and $ 0.8 million at December 31, 2024) and the fair value of interest rate derivatives ($ 139.5 million at March 31, 2025 and $ 159.2 million at December 31, 2024). The fair values of the interest rate locks, forward commitments and interest rate derivatives represent the amounts that would be required to settle the derivative financial instruments at the balance sheet date. See "Note 7 - Derivative Financial Instruments," for additional information.

Deferred compensation liabilities – Fair value of amounts due to employees under deferred compensation plans, classified as Level 1 liabilities and are included in other liabilities on the Consolidated Balance Sheets. The fair values of these liabilities are determined in the same manner as the related assets, as described under the heading "Investments held in Rabbi Trust" above.

Derivative liabilities – Level 1 liabilities represent the fair value of foreign currency exchange contracts ($ 0.6 million at March 31, 2025 and $1.6 million at December 31, 2024).

Level 2 liabilities represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors ($ 0.5 million at March 31, 2025 and $ 0.1 million at December 31, 2024) and the fair value of interest rate derivatives ($ 209.4 million at March 31, 2025 and $ 252.8 million at December 31, 2024).

The fair values of these liabilities are determined in the same manner as the related assets as described under the heading "Derivative assets" above.

Certain financial instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment. The following table presents Level 3 financial assets measured at fair value on a nonrecurring basis:


	March 31, 2025		December 31, 2024
	(dollars in thousands)
Loans, Net	$	139,481	$	168,668
OREO	2,193		2,621
MSRs (1)	51,277		53,972
SBA servicing asset	2,918		3,120
Total assets	$	195,869	$	228,381

(1) Amounts shown are estimated fair value. MSRs are recorded on the Corporation's Consolidated Balance Sheets at the lower of amortized cost or fair value.

See "Note 6 - Mortgage Servicing Rights" for additional information.

The valuation techniques used to measure fair value for the items in the table above are as follows:

• Loans, net – This category consists of loans that were individually evaluated for impairment and have been classified as Level 3 assets. The amount shown is the balance of non-accrual loans, net of related ACL. See "Note 5 - Loans and Allowance for Credit Losses," for additional details.

• OREO – This category consists of OREO classified as Level 3 assets, for which the fair values were based on estimated selling prices less estimated selling costs for similar assets in active markets.

• MSRs – This category consists of MSRs, which were initially recorded at fair value upon the sale of residential mortgage loans to secondary market investors, and subsequently carried at the lower of amortized cost or fair value. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are stratified by product type and evaluated for impairment by comparing each stratum's carrying amount to its estimated fair value. Fair values are determined at the end of each quarter through a discounted cash flows valuation performed by a third-party valuation expert. Significant inputs to the valuation included expected net servicing income, the discount rate and the expected life of the underlying loans. Expected life is based on the contractual terms of the loans as adjusted for prepayment projections. The weighted average annual constant prepayment rate and the weighted average discount rate used in the March 31, 2025 valuation were 7.2 % and 9.5 %, respectively. Management reviews the reasonableness of the significant inputs to the third-party valuation in comparison to market data. See "Note 6 - Mortgage Servicing Rights," for additional information.

• SBA servicing asset – This category consists of the retained servicing rights on SBA-guaranteed loans sold to investors. The standard sale structure under the SBA Secondary Participation Guaranty Agreement provides for the Corporation to retain a portion of the cash flow from the interest payment received on the SBA guaranteed portion of the loan, which is commonly known as a servicing spread. A third-party valuation expert is utilized to perform the modeling to estimate the fair value of the SBA servicing asset. Because the valuation model uses significant unobservable inputs, the SBA servicing asset is classified within Level 3.

The following tables detail the book values and the estimated fair values of the Corporation's financial instruments:


	March 31, 2025
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$	1,030,456	$	1,030,456	$	—	$	—	$	1,030,456
FRB and FHLB stock	136,164		—		136,164		—		136,164

Loans held for sale	15,965		—		15,965		—		15,965
AFS investment securities	3,575,043		—		3,575,043		—		3,575,043
HTM investment securities	1,496,280		—		1,309,834		—		1,309,834
Loans, net	23,482,897		—		—		22,148,322		22,148,322
Accrued interest receivable	116,215		116,215		—		—		116,215
Other assets	721,350		545,629		140,313		56,590		742,532
FINANCIAL LIABILITIES
Demand and savings deposits	$	21,448,848	$	21,448,848	$	—	$	—	$	21,448,848
Brokered deposits	738,458		141,084		597,097		—		738,181
Time deposits	4,141,666		—		4,138,508		—		4,138,508
Accrued interest payable	27,014		27,014		—		—		27,014

FHLB advances	750,000		750,725		—		—		750,725
Senior debt and subordinated debt	367,396		—		355,739		—		355,739
Other borrowings	539,804		520,975		1,202		—		522,177
Other liabilities	430,949		206,158		209,865		14,947		430,970


	December 31, 2024
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$	1,063,871	$	1,063,871	$	—	$	—	$	1,063,871
FRB and FHLB stock	139,574		—		139,574		—		139,574
Loans held for sale	25,618		—		25,618		—		25,618
AFS investment securities	3,410,899		—		3,410,899		—		3,410,899
HTM investment securities	1,395,569		—		1,183,449		—		1,183,449
Loans, net	23,665,763		—		—		22,555,687		22,555,687
Accrued interest receivable	117,029		117,029		—		—		117,029
Other assets	736,502		543,251		159,939		59,713		762,903
FINANCIAL LIABILITIES
Demand and savings deposits	$	21,135,478	$	21,135,478	$	—	$	—	$	21,135,478
Brokered deposits	843,857		145,056		698,647		—		843,703
Time deposits	4,150,098		—		4,154,726		—		4,154,726
Accrued interest payable	31,620		31,620		—		—		31,620

FHLB advances	850,000		851,470		—		—		851,470
Senior debt and subordinated debt	367,316		—		253,818		—		253,818
Other borrowings	564,732		544,908		901		—		545,809
Other liabilities	467,011		200,029		252,821		14,161		467,011

Fair values of financial instruments are significantly affected by the assumptions used, principally the timing of future cash flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily

be realized in an immediate sale or settlement of the instrument. The aggregate fair value amounts presented do not necessarily represent management’s estimate of the underlying value of the Corporation.

For short-term financial instruments, defined as those with remaining maturities of 90 days or less, and excluding those recorded at fair value on the Corporation's Consolidated Balance Sheets, book value was considered to be a reasonable estimate of fair value.

The following instruments are predominantly short-term:


Assets						Liabilities
Cash and cash equivalents						Demand and savings deposits
Accrued interest receivable						Other borrowings
						Accrued interest payable

FRB and FHLB stock represent restricted investments and are carried at cost on the Consolidated Balance Sheets, which is a reasonable estimate of fair value.

As of March 31, 2025, fair values for loans and time deposits were estimated by discounting future cash flows using the current rates, as adjusted for liquidity considerations, at which similar loans would be made to borrowers and similar deposits would be issued to customers for the same remaining maturities. Fair values of loans also include estimated credit losses that would be assumed in a market transaction, which represents estimated exit prices.

Brokered deposits consist of demand and saving deposits, which are classified as Level 1, and time deposits, which are classified as Level 2. The fair value of these deposits is determined in a manner consistent with the respective type of deposits discussed above.

NOTE 10 – Net Income Per Share

Basic net income per share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding.

Diluted net income per share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding plus the incremental number of shares added as a result of converting common stock equivalents, calculated using the treasury stock method. The Corporation's common stock equivalents consist of restricted stock, RSUs, and PSUs. PSUs are required to be included in weighted average diluted shares outstanding if performance measures, as defined in each PSU award agreement, are met as of the end of the period.

A reconciliation of weighted average shares outstanding used to calculate basic and diluted net income per share follows (in thousands, except per share data):


	Three months ended March 31
	2025		2024
Weighted average shares outstanding (basic)	182,179		162,706
Impact of common stock equivalents	1,898		1,814
Weighted average shares outstanding (diluted)	184,077		164,520
Per share:
Basic	$	0.50	$	0.36
Diluted	0.49		0.36

NOTE 11 – Stock-Based Compensation

The Corporation grants equity awards to employees in the form of restricted stock, RSUs and PSUs under its Employee Equity Plan. In addition, employees may purchase stock under the Corporation's ESPP. The fair value of equity awards granted to employees is recognized as compensation expense over the period during which employees are required to provide service in exchange for such awards.

The Corporation also grants equity awards to non-employee members of its Board of Directors and the Bank's Board of Directors under the Directors' Plan. Under the Directors' Plan, the Corporation can grant equity awards to non-employee Corporation and Bank directors in the form of restricted stock, RSUs or common stock. Recent grants of equity awards under the Directors' Plan have been limited to RSUs.

As of March 31, 2025, the Employee Equity Plan had approximately 3.9 million shares reserved for future grants through 2032, and the Directors' Plan had approximately 323,000 shares reserved for future grants through 2033.

The following table presents compensation expense and the related tax benefits for equity awards recognized in the Consolidated Statements of Income:


	Three months ended March 31
	2025		2024
	(dollars in thousands)
Compensation expense	$	1,932	$	667
Tax benefit	( 431 )		( 144 )
Total stock-based compensation, net of tax	$	1,501	$	523

NOTE 12 – Employee Benefit Plans

The Corporation's 401(k) Retirement Plan is a defined contribution plan under which eligible employees may defer a portion of their pre-tax covered compensation on an annual basis, with employer matches of up to 5 % of employee compensation. 401(k) Retirement Plan expense for the three months ended March 31, 2025 and 2024 was $ 2.6 million and $ 3.2 million, respectively.

The net periodic pension cost for the Pension Plan consisted of the following components:


	Three months ended March 31
	2025		2024
	(dollars in thousands)

Interest cost	$	768	$	790
Expected return on plan assets	( 978 )		( 976 )

Net periodic pension cost	$	( 210 )	$	( 186 )

The components of the net benefit for the Postretirement Plan consisted of the following components:


	Three months ended March 31
	2025		2024
	(dollars in thousands)
Interest cost	$	9	$	10

Net accretion and deferral	( 136 )		( 136 )
Net periodic benefit	$	( 127 )	$	( 126 )

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

The Corporation recognizes the funded status of its Pension Plan and Postretirement Plan on the Consolidated Balance Sheets and recognizes the change in that funded status through OCI.

NOTE 13 - Segment Reporting

The Corporation has one reportable segment whose primary sources of revenue are interest income on loans, investment securities and other interest-earning assets and fee income earned on its products and services. Its expenses consist of interest expense on deposits and borrowed funds, provision for credit losses, other operating expenses and income taxes. The Corporation manages its business activities on a consolidated basis.

The accounting policies of the segment are the same as those described in "Note 1 – Summary of Significant Accounting Policies" of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.

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

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

The measure of segment net income is reported on the Consolidated Statements of Income and the measure of segment assets is reported on the Consolidated Balance Sheet.

NOTE 14 – Commitments and Contingencies

Commitments

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

Commitments to extend credit are agreements to lend to a borrower or obligor as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower or obligor. Because a portion of the commitments is expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each borrower's or obligor's creditworthiness on a case-by-case basis. The amount of collateral, if any, obtained upon an extension of credit is based on management's credit evaluation of the borrower or obligor. Collateral held varies but may include accounts receivable, inventory, property, equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued to guarantee the financial or performance obligation of a borrower or obligor to a third party. Commercial letters of credit are conditional commitments issued to facilitate foreign and domestic trade transactions for borrowers or obligors. The credit risk involved in issuing letters of credit is similar to that involved in extending loan facilities. These obligations are underwritten consistent with commercial lending standards. The maximum exposure to loss for standby and commercial letters of credit is equal to the contractual (or notional) amount of the instruments.

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


	March 31, 2025		December 31, 2024
	(dollars in thousands)
Commitments to extend credit	$	8,765,791	$	8,828,595
Standby letters of credit	283,615		279,309
Commercial letters of credit	37,932		48,993

Residential Lending

The Corporation originates and sells residential mortgages to secondary market investors. The Corporation provides customary representations and warranties to secondary market investors that specify, among other things, that the loans have been underwritten to the standards of the secondary market investor. The Corporation may be required to repurchase specific loans or reimburse the investor for a credit loss incurred on a sold loan if it is determined that the representations and warranties have not been met. Under some agreements with secondary market investors, the Corporation may have additional credit exposure beyond customary representations and warranties, based on the specific terms of those agreements.

The Corporation maintains a reserve for estimated losses related to loans sold to investors. As of March 31, 2025 and December 31, 2024, the total reserve for losses on residential mortgage loans sold was $ 1.5 million, including reserves for both representation and warranty and credit loss exposures. In addition, included as a component of ACL - OBS credit exposures, was $0.9 million and $1.2 million, as of March 31, 2025 and December 31, 2024, respectively, related to additional credit exposures for potential loan repurchases.

Legal Proceedings

The Corporation is involved in various pending and threatened claims and other legal proceedings in the ordinary course of its business activities. The Corporation evaluates the possible impact of these matters, taking into consideration the most recent information available. A loss reserve is established for those matters for which the Corporation believes a loss is both probable and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments. Actual losses with respect to any such matter may be more or less than the amount estimated by the Corporation. For matters where a loss is not probable, or the amount of the loss cannot be reasonably estimated by the Corporation, no loss reserve is established.

In addition, from time to time, the Corporation is involved in investigations or other forms of regulatory or governmental inquiry covering a range of possible issues and, in some cases, these may be part of similar reviews of the specified activities of other companies. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the Corporation, and could result in fines, penalties, restitution, other types of sanctions, or the need for the Corporation to undertake remedial actions, or to alter its business, financial or accounting practices. The Corporation's practice is to cooperate fully with regulatory and governmental inquiries and investigations.

As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, that may result from the final outcomes of pending legal proceedings, or regulatory or governmental inquiries or investigations, will not have a material adverse effect on the financial condition of the Corporation. However, legal proceedings, inquiries and investigations are often unpredictable, and it is possible that the ultimate resolution of any such matters, if unfavorable, may be material to the Corporation's results of operations in any future period, depending, in part, upon the size of the loss or liability imposed and the operating results for the period, and could have a material adverse effect on the Corporation's business. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause the Corporation to incur additional expenses, which could be significant, and possibly material, to the Corporation's results of operations in any future period.

Item 2. 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 Quarterly Report on Form 10-Q.

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.

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


	Three months ended March 31
	2025			2024
	(dollars in thousands, except per share data)
Net income	$	92,987		$	61,941
Net income available to common shareholders	90,425			59,379
Net income available to common shareholders per share (diluted)	0.49			0.36
Operating net income available to common shareholders per share (1)	0.52			0.40
Return on average assets, annualized	1.18		%	0.91		%
Operating return on average assets, annualized (1)	1.25		%	1.00		%
Return on average common shareholders' equity, annualized	11.98		%	9.28		%

Operating return on average common shareholders' equity (tangible), annualized (1)	15.95		%	13.08		%
Net interest margin (2)	3.43		%	3.32		%
Efficiency ratio (1)	56.7		%	63.2		%
Non-performing assets to total assets	0.62		%	0.57		%
Net charge-offs to average loans, annualized	0.21		%	0.16		%

(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.

Acquisition of Substantially all of the Assets and Assumption of Substantially all of the Deposits and Certain Liabilities of Republic First Bank from the FDIC

On the Acquisition Date, Fulton Bank completed the Republic First Transaction and acquired approximately $4.8 billion of assets of Republic First Bank and assumed approximately $5.6 billion of liabilities of Republic First Bank. The Bank received approximately $0.8 billion of cash from the FDIC in connection with the Republic First Transaction.

See "Note 2 - Business Combinations" in the Notes to Consolidated Financial Statements in Part I, "Item 1. Financial Statements."

Financial Highlights

Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was $90.4 million for the three months ended March 31, 2025, a $31.0 million increase compared to $59.4 million for the same period in 2024. Net income available to common shareholders per diluted share was $0.49 for the three months ended March 31, 2025, a $0.13 increase compared to the same period in 2024.

Three Months Ended March 31, 2025 Results were Impacted by the Following Items:

• Net interest margin of 3.43%, an 11 bps increase compared to 3.32% for the same period in 2024.

• Net interest income of $251.2 million, a $44.3 million increase compared to $206.9 million for the same period in 2024.

• Provision for credit losses of $13.9 million resulting in an allowance for credit losses attributable to net loans of $379.7 million, or 1.59% of total net loans as of March 31, 2025.

• Non-interest income of $67.2 million, a $10.1 million increase compared to $57.1 million for the same period in 2024.

• Non-interest expense of $189.5 million, an $11.9 million increase compared to $177.6 million for the same period in 2024.

Critical Accounting Policies

The Corporation's accounting policies are fundamental to understanding Management’s Discussion. Critical 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 Corporation's critical accounting policies are described in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024.

Supplemental Reporting of Non-GAAP Based Financial Measures

This Quarterly Report on Form 10-Q 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:


	Three months ended March 31
	2025			2024
	(dollars in thousands, except per share data and share data)
Operating net income available to common shareholders
Net income available to common shareholders	$	90,425		$	59,379

Less: Other revenue	(122)			(151)


Plus: Core deposit intangible amortization	6,155			441
Plus: Acquisition-related expense	380			—

Plus: FDIC special assessment	—			956

Plus: FultonFirst implementation and asset disposals	(47)			6,329
Less: Tax impact of adjustments	(1,337)			(1,591)
Operating net income available to common shareholders (numerator)	$	95,454		$	65,363

Weighted average shares (diluted) (denominator)	184,077			164,520

Operating net income available to common shareholders, per share (diluted)	$	0.52		$	0.40

Operating return on average assets (1)
Net income	$	92,987		$	61,941

Less: Other revenue	(122)			(151)


Plus: Core deposit intangible amortization	6,155			441
Plus: Acquisition-related expense	380			—

Plus: FDIC special assessment	—			956

Plus: FultonFirst implementation and asset disposals	(47)			6,329
Less: Tax impact of adjustments	(1,337)			(1,591)
Operating net income (numerator)	$	98,016		$	67,925

Total average assets	31,971,601			27,427,626
Less: Average net core deposit intangible	(77,039)			(4,666)
Total operating average assets (denominator)	$	31,894,562		$	27,422,960

Operating return on average assets	1.25		%	1.00		%
















Operating return on average common shareholders' equity (tangible) (1)
Net income available to common shareholders	$	90,425		$	59,379

Less: Other revenue	(122)			(151)


Plus: Intangible amortization	6,269			573
Plus: Acquisition-related expense	380			—


Plus: FDIC special assessment	—			956

Plus: FultonFirst implementation and asset disposals	(47)			6,329
Less: Tax impact of adjustments	(1,361)			(1,618)
Adjusted net income available to common shareholders (numerator)	$	95,544		$	65,468


	Three months ended March 31
	2025			2024
	(dollars in thousands, except per share data and share data)
Average shareholders' equity	3,254,125			2,766,945
Less: Average preferred stock	(192,878)			(192,878)
Less: Average goodwill and intangible assets	(632,254)			(560,393)
Average tangible common shareholders' equity (denominator)	$	2,428,993		$	2,013,674
Operating return on average common shareholders' equity (tangible)	15.95		%	13.08		%

Efficiency ratio
Non-interest expense	$	189,460		$	177,600

Less: Acquisition-related expense	(380)			—
Less: Intangible amortization	(6,269)			(573)
Less: FDIC special assessment	—			(956)

Less: FultonFirst implementation and asset disposals	47			(6,329)

Operating non-interest expense (numerator)	$	182,858		$	169,742

Net interest income	$	251,187		$	206,937
Tax equivalent adjustment	4,340			4,592
Plus: Total non-interest income	67,232			57,140
Less: Other revenue	(122)			(151)


Plus: Investment securities losses (gains), net	2			—
Total revenue (denominator)	$	322,639		$	268,518
Efficiency ratio	56.7		%	63.2		%
(1) Results are annualized.

RESULTS OF OPERATIONS

Three months ended March 31, 2025 compared to the three months ended March 31, 2024

Net Interest Income

FTE net interest income was $255.5 million for the three months ended March 31, 2025, an increase of $44.0 million, compared to $211.5 million for the same period in 2024. For the three months ended March 31, 2025, NIM increased to 3.43%, or 11 bps, compared to the same period in 2024. 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 March 31, 2025 compared to the same period in 2024. 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.


	Three months ended March 31
	2025						2024
	Average Balance		Interest (1)		Yield/ Rate		Average Balance		Interest (1)		Yield/ Rate
ASSETS	(dollars in thousands)
Interest-earning assets:
Net loans (2)	$	24,006,863	$	347,626	5.86	%	$	21,370,033	$	313,882	5.90	%
Investment securities (3)	5,199,000		47,242		3.63		3,983,753		27,048		2.71
Other interest-earning assets	793,126		9,164		4.67		249,079		3,328		5.36
Total interest-earning assets	29,998,989		404,032		5.44		25,602,865		344,258		5.40
Noninterest-earning assets:
Cash and due from banks	301,897						282,895
Premises and equipment	191,248						223,375
Other assets	1,864,996						1,614,746
Less: ACL - loans (4)	(385,529)						(296,255)
Total Assets	$	31,971,601					$	27,427,626
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits	$	7,753,586	$	34,189	1.79	%	$	5,596,725	$	20,500	1.47	%
Savings and money market deposits	7,971,728		45,101		2.29		6,669,228		38,797		2.34
Brokered deposits	904,722		10,038		4.50		1,083,382		14,655		5.44
Time deposits	4,127,784		41,564		4.08		2,968,344		29,622		4.01
Total interest-bearing deposits	20,757,820		130,892		2.56		16,317,679		103,574		2.55
Borrowings and other interest-bearing liabilities	1,754,900		17,613		4.07		2,608,376		29,155		4.46
Total interest-bearing liabilities	22,512,720		148,505		2.67		18,926,055		132,729		2.82
Noninterest-bearing liabilities:
Demand deposits	5,412,063						5,061,075
Other liabilities	792,693						673,551
Total Liabilities	28,717,476						24,660,681


Shareholders’ equity	3,254,125						2,766,945
Total Liabilities and Shareholders’ Equity	$	31,971,601					$	27,427,626
Net interest income/net interest margin (FTE)			255,527		3.43	%			211,529		3.32	%
Tax equivalent adjustment			(4,340)						(4,592)
Net interest income			$	251,187					$	206,937

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

(2) Average balance includes non-performing loans.

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

(4) 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.

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 March 31, 2025 compared to the same period in 2024:


	2025 versus 2024 Increase (decrease) due to change in
	Volume		Yield/Rate		Net
	(dollars in thousands)
FTE Interest income on:
Net loans (1)	$	97,709	$	(63,965)	$	33,744
Investment securities	9,558		10,636		20,194
Other interest-earning assets	18,675		(12,839)		5,836
Total interest income	$	125,942	$	(66,168)	$	59,774
Interest expense on:
Demand deposits	$	8,748	$	4,941	$	13,689
Savings and money market deposits	30,062		(23,758)		6,304
Brokered deposits	(2,255)		(2,362)		(4,617)
Time deposits	11,431		511		11,942
Borrowings and other interest-bearing liabilities	(9,108)		(2,434)		(11,542)
Total interest expense	$	38,878	$	(23,102)	$	15,776

(1) Average balance includes non-performing loans.

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 the first quarter of 2024, FTE total interest income for the first quarter of 2025 increased $59.8 million, or 17.4%, due to an increase of $125.9 million attributable to changes in volume, partially offset by a decrease of $66.2 million attributable to changes in yield. The increase due to changes in volume was largely due to an increase in average net loans primarily attributable to loans acquired in the Republic First Transaction. The decrease due to changes in yield was primarily due to a decline in interest rates.

The yield on average interest-earning assets increased 4 bps for the three months ended March 31, 2025 compared to the same period in 2024.

In the first quarter of 2025, interest expe ns e increased $15.8 million comp ar ed to the first quarter of 2024, primarily driven by an increase of $38.9 million attributable to changes in volume, partially offset by a decrease of $23.1 million attributable to changes in rate. The increase in interest expense attributable to changes in volume was driven by increases in average savings and money market deposits, average time deposits and average demand deposits primarily due to deposits assumed in the Republic First Transaction. The decrease in interest expense attributable to changes in rate was primarily due to a decline in interest rates.

The rate on average interest-bearing liabilities decreased 15 bps for the three months ended March 31, 2025 compared to the same period in 2024.

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


	Three months ended March 31
	2025				2024				Increase (Decrease)
	Balance		Yield		Balance		Yield		$		%
	(dollars in thousands)
Real estate – commercial mortgage	$	9,655,283	6.23	%	$	8,166,018	6.34	%	$	1,489,265	18.2	%
Commercial and industrial	4,608,401		6.29		4,517,179		6.67		91,222		2.0
Real estate – residential mortgage	6,367,978		4.47		5,353,905		3.96		1,014,073		18.9
Real estate – home equity	1,160,713		6.84		1,039,321		7.34		121,392		11.7
Real estate – construction	1,296,090		7.10		1,240,640		7.44		55,450		4.5
Consumer	615,741		7.02		721,523		6.45		(105,782)		(14.7)
Leases and other loans (1)	302,657		4.99		331,447		4.69		(28,790)		(8.7)
Total loans	$	24,006,863	5.86	%	$	21,370,033	5.90	%	$	2,636,830	12.3	%

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

During the first quarter of 2025, average net loan s increased $2.6 billion, or 12.3%, c ompared to the same period in 2024. The increase in average net loans was primarily due to increases of $1.5 billion and $1.0 billion in average commercial mortgage loans and average residential mortgage loans, respectively. The increase in average net loans was largely due to loans acquired in the Republic First Transaction.

The yield on total loans decreased 4 bps to 5.86% for the first quarter of 2025 compared to 5.90% for the same period in 2024.

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


	Three months ended March 31
	2025				2024				Increase (Decrease)
	Balance		Rate		Balance		Rate		$		%
	(dollars in thousands)
Noninterest-bearing demand	$	5,412,063	—	%	$	5,061,075	—	%	$	350,988	6.9	%
Interest-bearing demand	7,753,586		1.79		5,596,725		1.47		2,156,861		38.5
Savings and money market deposits	7,971,728		2.29		6,669,228		2.34		1,302,500		19.5
Total demand deposits and savings and money market deposits	21,137,377		1.52		17,327,028		1.38		3,810,349		22.0
Brokered deposits	904,722		4.50		1,083,382		5.44		(178,660)		(16.5)
Time deposits	4,127,784		4.08		2,968,344		4.01		1,159,440		39.1
Total deposits	$	26,169,883	2.03	%	$	21,378,754	1.95	%	$	4,791,129	22.4	%

The cost of deposits increased 8 bps to 2.03% in the first quarter of 2025 c ompared to 1.95% for the same period in 2024, primarily due to a change in the mix of deposits.

Average total deposits increased $4.8 billion, or 22.4%, in the first quarter of 2025 compared to the same period in 2024. The increase in average total deposits was primarily due to increases of $2.2 billion, $1.3 billion and $1.2 billion in average interest-bearing demand deposits, average savings and money market deposits and average time deposits, respectively. The increase in average deposits is primarily due to deposits assumed in the Republic First Transaction.

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


	Three months ended March 31
	2025				2024				Increase (Decrease)
	Balance		Rate		Balance		Rate		$		%
	(dollars in thousands)
Federal funds purchased	$	—	—	%	$	173,659	5.44	%	$	(173,659)	N/M
Federal Home Loan Bank advances	709,367		4.59		902,890		4.80		(193,523)		(21.4)
Senior debt and subordinated debt	367,357		3.90		535,479		3.96		(168,122)		(31.4)
Other borrowings and interest-bearing liabilities (1)	678,176		3.60		996,348		4.10		(318,172)		(31.9)
Total borrowings and other interest-bearing liabilities	$	1,754,900	4.07	%	$	2,608,376	4.46	%	$	(853,476)	(32.7)	%

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

Average borrowings and other interest-bearing liabilities decreased $853.5 million, or 32.7%, in the first quarter of 2025 compared to the same period in 2024. The decrease in average borrowings and other interest-bearing liabilities was due to decreases of $318.2 million, $193.5 million, $173.7 million and $168.1 million in average other borrowings and interest-bearing liabilities, average FHLB advances, average Federal funds purchased and average senior debt and subordinated debt, respectively.

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.

Provision for Credit Losses

The provision for credit losses was $13.9 million for the three months ended March 31, 2025 resulting in a $379.7 million allowance for credit losses attributable to net loans, or 1.59% of total net loans as of March 31, 2025, compared to a provision for credit losses of $10.9 million for the same period in 2024, resulting in a $297.9 million allowance for credit losses attributable to net loans, or 1.39% of total net loans as of March 31, 2024.

Non-Interest Income

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


	Three months ended March 31				Increase (Decrease)
	2025		2024		$		%
	(dollars in thousands)
Wealth management	$	21,785	$	20,155	$	1,630	8.1	%
Commercial banking:
Merchant and card	6,591		6,808		(217)		(3.2)
Cash management	7,799		6,305		1,494		23.7
Capital markets	2,411		2,341		70		3.0
Other commercial banking	4,528		3,375		1,153		34.2
Total commercial banking	21,329		18,829		2,500		13.3
Consumer banking:
Card	7,544		6,628		916		13.8
Overdraft	3,295		2,786		509		18.3
Other consumer banking	2,229		2,254		(25)		(1.1)
Total consumer banking	13,068		11,668		1,400		12.0
Mortgage banking	3,138		3,090		48		1.6
Other	7,914		3,398		4,516		N/M
Non-interest income before investment securities gains (losses)	67,234		57,140		10,094		17.7

Investment securities losses, net	(2)		—		(2)		N/M
Total Non-Interest Income	$	67,232	$	57,140	$	10,092	17.7	%

Compared to the three months ended March 31, 2024, non-interest income before investment securities losses increased $10.1 million, or 17.7%. The increase in non-interest income was primarily due to a $4.1 million increase in income from equity method investments, reflected in other non-interest income, a $1.6 million increase in wealth management revenues due to an increase in assets under management, a $1.5 million increase in cash management fee income due to an increase in account analysis fees as commercial customers elected to move funds to interest-bearing deposit accounts and a $0.9 million increase in consumer card income largely due to an increase in transaction volume primarily attributable to customer accounts acquired in the Republic First Transaction.

Non-Interest Expense

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


	Three months ended March 31				Increase (Decrease)
	2025		2024		$		%
	(dollars in thousands)
Salaries and employee benefits	$	103,525	$	95,240	$	8,285	8.7	%
Data processing and software	18,599		17,661		938		5.3
Net occupancy	18,207		16,149		2,058		12.7
Other outside services	11,704		10,809		895		8.3
Intangible amortization	6,269		573		5,696		N/M
FDIC insurance	5,597		6,104		(507)		(8.3)
Equipment	4,150		4,040		110		2.7
Marketing	2,521		1,912		609		31.9
Professional fees	(1,208)		2,088		(3,296)		N/M
Debt extinguishment	—		—		—		N/M
Acquisition-related expenses	—		—		—		N/M
Other	19,763		16,695		3,068		18.4
Subtotal	$	189,127	$	171,271	$	17,856	10.4	%
FultonFirst implementation and asset disposals	(47)		6,329		(6,376)		N/M
Acquisition-related expenses	380		—		380		N/M
Total non-interest expense	$	189,460	$	177,600	$	11,860	6.7	%

Non-interest expense increased $11.9 million, or 6.7%, for the three months ended March 31, 2025 compared to the same period in 2024. The increase in non-interest expense was primarily due to $8.3 million in salaries and employee benefits expense driven by employee incentive compensation and employee base salaries expense, in part due to the Republic First Transaction, $5.7 million in intangible amortization expense attributable to an increase in CDI amortization expense resulting from the Republic First Transaction and $2.1 million in net occupancy expense largely due to an increase in rent expense resulting from the Sale-Leaseback Transaction and leases assumed in the Republic First Transaction, partially offset by a decrease in professional fees of $3.3 million primarily due to a recovery during the first quarter of 2025 of previously incurred fees.

Income Taxes

Income tax expense for the three months ended March 31, 2025 was $22.1 million, an $8.5 million increase compared to the same period in 2024. The Corporation's ETR was 19.2% for the three months ended March 31, 2025 compared to 18.0% for the same period in 2024.

FINANCIAL CONDITION

The table below presents condensed consolidated ending balance sheets:


	March 31, 2025		December 31, 2024		Increase (Decrease)
					$		%
Assets	(dollars in thousands)
Cash and cash equivalents	$	1,030,456	$	1,063,871	$	(33,415)	(3.1)	%
FRB and FHLB Stock	136,164		139,574		(3,410)		(2.4)

Loans held for sale	15,965		25,618		(9,653)		(37.7)
Investment securities	5,071,323		4,806,468		264,855		5.5
Net loans, less ACL - loans	23,482,897		23,665,763		(182,866)		(0.8)
Net premises and equipment	186,873		195,527		(8,654)		(4.4)
Goodwill and intangibles	629,189		635,458		(6,269)		(1.0)
Other assets	1,579,161		1,539,531		39,630		2.6
Total Assets	$	32,132,028	$	32,071,810	$	60,218	0.2	%
Liabilities and Shareholders' Equity
Deposits	$	26,328,972	$	26,129,433	$	199,539	0.8	%
Borrowings	1,657,200		1,782,048		(124,848)		(7.0)
Other liabilities	871,535		963,004		(91,469)		(9.5)
Total Liabilities	28,857,707		28,874,485		(16,778)		(0.1)
Total Shareholders' Equity	3,274,321		3,197,325		76,996		2.4
Total Liabilities and Shareholders' Equity	$	32,132,028	$	32,071,810	$	60,218	0.2	%

Investment Securities

The following table presents the carrying amount of investment securities:


	March 31, 2025		December 31, 2024		Increase (Decrease)
					$		%
Available for Sale	(dollars in thousands)


State and municipal securities	$	791,697	$	814,887	$	(23,190)	(2.8)
Corporate debt securities	284,733		300,370		(15,637)		(5.2)
Collateralized mortgage obligations	1,006,848		788,885		217,963		27.6
Residential mortgage-backed securities	973,352		989,875		(16,523)		(1.7)
Commercial mortgage-backed securities	518,413		516,882		1,531		0.3
Total available for sale investment securities	3,575,043		3,410,899		164,144		4.8
Held to Maturity

Residential mortgage-backed securities	640,273		537,856		102,417		19.0
Commercial mortgage-backed securities	856,007		857,713		(1,706)		(0.2)
Total held to maturity securities	1,496,280		1,395,569		100,711		7.2

Total Investment Securities	$	5,071,323	$	4,806,468	$	264,855	5.5	%

Compared to December 31, 2024, total AFS investment securities at March 31, 2025 increased $164.1 million, or 4.8%. The increase in AFS investment securities at March 31, 2025 compared to December 31, 2024 was primarily due an $218.0 million increase in collateralized mortgage obligations, partially offset by decreases of $23.2 million, $16.5 million and $15.6 million in state and municipal securities, residential mortgage-backed securities and corporate debt securities, respectively.

Compared to December 31, 2024, total HTM investment securities at March 31, 2025 increased $100.7 million, or 7.2%. The increase in HTM investment securities at March 31, 2025 compared to December 31, 2024 was driven by an increase of $102.4 million in residential mortgage-backed securities.

Loans

The following table presents ending net loans outstanding by type:


	March 31, 2025		December 31, 2024		Increase (Decrease)
					$		%
	(dollars in thousands)
Real estate - commercial mortgage	$	9,676,517	$	9,601,858	$	74,659	0.8%
Commercial and industrial (1)	4,531,266		4,605,589		(74,323)		(1.6)%
Real estate - residential mortgage	6,409,657		6,349,643		60,014		0.9%
Real estate - home equity	1,170,470		1,160,616		9,854		0.8%
Real estate - construction	1,175,445		1,394,899		(219,454)		(15.7)%
Consumer	597,305		616,856		(19,551)		(3.2)%
Leases and other loans (2)	301,914		315,458		(13,544)		(4.3)%
Net loans	$	23,862,574	$	24,044,919	$	(182,345)	(0.8)%

(1) Includes no unearned income for March 31, 2025 and December 31, 2024.

(2) Includes unearned income of $35.9 million and $35.6 million as of March 31, 2025 and December 31, 2024, respectively.

During the three months ended March 31, 2025, net loans decreased $182.3 million, or 0.8%, compared to December 31, 2024. The decrease in net loans during the first quarter of 2025 was primarily due to decreases of $219.5 million in construction loans, $74.3 million in commercial and industrial loans and $19.6 million in consumer loans, partially offset by increases of $74.7 million in commercial mortgage loans and $60.0 million in residential mortgage loans. The decrease in net loans is partially due to the repayments of $94.2 million of special mention loans and substandard loans in the first quarter of 2025.

The Corporation does not have a significant concentration of credit risk with any single borrower. As of March 31, 2025, approximately $10.9 billion, or 45.5%, 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 the majority of 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:


	March 31, 2025		December 31, 2024
Real estate (1)	39.7	%	39.5	%
Health care	6.8		6.3
Retail	6.3		6.6
Manufacturing	6.0		5.1
Other services	5.2		5.3
Agriculture	5.1		5.3
Construction (2)	4.3		4.3
Hospitality and food services	4.0		4.0

Wholesale trade	3.4		3.4
Educational services	2.9		3.0
Professional, scientific and technical services	2.7		2.7
Arts, entertainment and recreation	2.5		2.4
Finance and Insurance	1.5		1.6
Transportation and warehousing	1.3		1.5

Public administration	1.3		1.3
Administrative and Support	1.2		1.2
Other	5.8		6.5
Total	100.0	%	100.0	%

(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% of non-owner occupied commercial mortgage loans as of March 31, 2025. The following table summarizes the non-owner occupied commercial mortgage loan portfolio and the percent to total net loans.


	March 31, 2025				December 31, 2024
	$		% of Total Net Loans		$		% of Total Net Loans
	(dollars in thousands)
Multi-family	$	1,587,927	6.7	%	$	1,543,943	6.4	%
Retail trade	1,119,657		4.7		1,097,712		4.6
Industrial	841,491		3.5		829,354		3.4
Office	762,954		3.2		761,929		3.2
Hospitality and food services	452,693		1.9		470,907		2.0
Other	562,042		2.3		527,661		2.2
Total non-owner occupied commercial mortgage loans	$	5,326,764	22.3	%	$	5,231,506	21.8	%

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


	March 31, 2025						December 31, 2024
	Outstanding Balance		Total Commitment		Weighted Average LTV (1)		Outstanding Balance		Total Commitment		Weighted Average LTV (1)
	(dollars in thousands)
Philadelphia (2)	$	334,308	$	364,756	61	%	$	339,164	$	369,758	62	%
New York (3)	77,392		80,453		61		96,129		100,893		59
Washington, D.C. (4)	104,675		104,675		43		87,688		87,688		55
Baltimore (5)	85,011		88,040		62		75,318		76,453		58
Other	161,568		170,748		57		163,630		171,442		61
Total office non-owner occupied commercial real estate	$	762,954	$	808,672	58	%	$	761,929	$	806,234	60	%

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

(5) Baltimore-Columbia-Towson, MD.

The non-owner occupied commercial mortgage office loan portfolio table above excludes commercial construction loans secured by office property collateral with a total outstanding balance of $1.7 million and outstanding loan commitment of $2.8 million as of March 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:


	March 31, 2025						December 31, 2024
	Outstanding Balance		Total Commitment		Weighted Average LTV (1)		Outstanding Balance		Total Commitment		Weighted Average LTV (1)
	(dollars in thousands)
Philadelphia (2)	$	711,865	$	740,084	61	%	$	707,826	$	738,256	62	%
New York (3)	119,792		125,424		65		124,321		130,238		64
Baltimore (4)	94,353		94,457		56		108,384		108,680		59
Washington, D.C. (5)	52,847		56,171		54		28,145		31,121		48
Lancaster, PA	135,637		136,378		62		135,891		146,593		69
Other	473,433		531,717		57		439,376		479,884		59
Total multi-family non-owner occupied commercial real estate	$	1,587,927	$	1,684,231	60	%	$	1,543,943	$	1,634,772	62	%

(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 table above excludes commercial construction loans secured by multi-family property collateral with a total outstanding loan balance of $347.4 million and outstanding loan commitments of $605.8 million as of March 31, 2025.

The following table presents the changes in non-accrual loans for the three months ended March 31, 2025:


	Commercial and Industrial		Real Estate - Commercial Mortgage		Real Estate - Construction		Real Estate - Residential Mortgage		Consumer and Real Estate - Home Equity		Leases and other loans		Total
	(dollars in thousands)

Balance at December 31, 2024	$	42,217	$	99,497	$	1,746	$	25,400	$	8,599	$	11,834	$	189,293
Additions	10,255		47,380		4,694		3,278		2,661		1,528		69,796
Payments	(14,038)		(45,570)		(2,534)		(686)		(720)		(9,529)		(73,077)
Charge-offs	(3,865)		(12,106)		—		(343)		(2,193)		(1,527)		(20,034)
Transfers to accrual status	—		(2,673)		—		—		(216)		—		(2,889)
Transfers to OREO	—		—		(240)		(423)		—		—		(663)
Balance at March 31, 2025	$	34,569	$	86,528	$	3,666	$	27,226	$	8,131	$	2,306	$	162,426

During the three months ended March 31, 2025, non-accrual loans decreased by approximately $26.9 million, or 14.2%, largely due to $73.1 million in payments and $20.0 million in charge-offs, partially offset by $69.8 million in additions. During the three months ended March 31, 2025, non-accrual loans as a percentage of total net loans decreased to 0.68% compared to 0.79% as of December 31, 2024.

The following table presents non-performing assets for the periods shown below:


	March 31, 2025			December 31, 2024
	(dollars in thousands)
Non-accrual loans	$	162,426		$	189,293
Loans 90 days or more past due and still accruing	34,367			30,781
Total non-performing loans	196,793			220,074
OREO (1)	2,193			2,621
Total non-performing assets	$	198,986		$	222,695
Non-accrual loans to total loans	0.68		%	0.79		%
Non-performing loans to total loans	0.82		%	0.92		%
Non-performing assets to total assets	0.62		%	0.69		%

ACL - loans to non-performing loans	193		%	172		%

(1) Excludes $16.5 million and $17.5 million of residential mortgage properties for which formal foreclosure proceedings were in process as of March 31, 2025 and December 31, 2024, respectively.

Non-performing loans as of March 31, 2025 decreased $23.3 million, or 10.6%, compared to $220.1 million as of December 31, 2024. The decrease in non-performing loans during the first three months of 2025 was primarily due to payments and charge-offs, partially offset by additions. Non-performing loans as a percentage of total net loans was 0.82% and 0.92% as of March 31, 2025 and December 31, 2024, respectively.

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 and commercial construction loans to commercial borrowers, 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, consumer loans and leases and other loans is based on payment history through the monitoring of delinquency levels and trends.

Total internally risk-rated loans were $15.2 billion and $15.4 billion as of March 31, 2025 and December 31, 2024, respectively, of which $1.8 billion were criticized and classified in both periods.

The following table presents criticized and classified loans, or those with internal risk ratings of special mention or substandard or lower for commercial mortgage loans, commercial and industrial loans and construction loans to commercial borrowers, by class segment:


	Special Mention (1)						Increase (Decrease)			Substandard or Lower (2)						Increase (Decrease)				Total Criticized and Classified Loans
	March 31, 2025			December 31, 2024			$		%	March 31, 2025			December 31, 2024			$		%		March 31, 2025			December 31, 2024
	(dollars in thousands)
Real estate - commercial mortgage	$	532,804		$	531,423		$	1,381	0.3%	$	519,808		$	522,377		$	(2,569)	(0.5)	%	$	1,052,612		$	1,053,800
Commercial and industrial	214,920			238,809			(23,889)		(10.0)	352,966			335,246			17,720		5.3		567,886			574,055
Real estate -construction (3)	95,770			161,310			(65,540)		(40.6)	54,868			47,183			7,685		16.3		150,638			208,493
Total	$	843,494		$	931,542		$	(88,048)	(9.5)%	$	927,642		$	904,806		$	22,836	2.5%		$	1,771,136		$	1,836,348

% of total risk rated loans	5.6		%	6.1		%				6.1		%	5.9		%					11.7		%	11.9		%

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

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

(3) Excludes residential real estate - construction.

Compared to December 31, 2024, total criticized and classified loans decreased $65.2 million driven by a decrease of $88.0 million in special mention loans, partially offset by an increase of $22.8 million in substandard or lower loans. The decrease in total criticized and classified loans was in part due to $94.2 million in repayments during the quarter.

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:


	Three months ended March 31
	2025			2024
	(dollars in thousands)
Average balance of net loans	$	24,006,863		$	21,370,033

Balance of ACL at beginning of period	$	379,156		$	293,404




Loans charged off:
Real estate - commercial mortgage	(12,106)			(26)
Commercial and industrial	(3,865)			(7,632)
Real estate - residential mortgage	(343)			(251)
Consumer and real estate - home equity	(2,193)			(2,238)
Real estate - construction	—			—
Leases and other loans	(1,527)			(805)
Total loans charged off	(20,034)			(10,952)
Recoveries of loans previously charged off:
Real estate - commercial mortgage	374			152
Commercial and industrial	5,952			1,248
Real estate - residential mortgage	174			116
Consumer and real estate - home equity	660			676
Real estate - construction	82			—
Leases and other loans	201			162
Total recoveries	7,443			2,354
Net loans charged off (recoveries)	(12,591)			(8,598)
Provision for credit losses (1)(2)	13,112			13,082
Balance of ACL at end of period	$	379,677		$	297,888
Provision for OBS credit exposures (1)	$	786		$	(2,157)
Reserve for OBS credit exposures (3)	$	14,947		$	15,097
Net charge-offs to average loans (annualized)	0.21		%	0.16		%

(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.

The provision for credit losses, specific to net loans, for the three months ended March 31, 2025 and March 31, 2024 was $13.1 million.

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 1. Financial Statements" for additional details.

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


	March 31, 2025						December 31, 2024
	ACL - loans		% to Total ACL - loans (1)		% to Total Net Loans (2)		ACL - loans		% to Total ACL - loans (1)		% to Total Net Loans (2)
	(dollars in thousands)
Real estate - commercial mortgage	$	162,146	42.7	%	40.6	%	$	158,181	41.7	%	39.9	%
Commercial and industrial	96,851		25.5		19.0		92,212		24.3		19.2
Real estate - residential mortgage	82,416		21.7		26.9		81,331		21.5		26.4
Consumer, home equity and leases and other loans	22,364		5.9		8.7		22,292		5.9		8.7
Real estate - construction	15,900		4.2		4.8		25,140		6.6		5.8

Total ACL - loans	$	379,677	100.0	%	100.0	%	$	379,156	100.0	%	100.0	%

(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.

Deposits and Borrowings

The following table presents ending deposits by type:


	March 31, 2025		December 31, 2024		Increase (Decrease)
					$		%
	(dollars in thousands)
Noninterest-bearing demand	$	5,435,934	$	5,499,760	$	(63,826)	(1.2)	%
Interest-bearing demand	7,804,388		7,843,604		(39,216)		(0.5)
Savings and money market deposits	8,208,526		7,792,114		416,412		5.3
Total demand and savings	21,448,848		21,135,478		313,370		1.5
Brokered deposits	738,458		843,857		(105,399)		(12.5)
Time deposits	4,141,666		4,150,098		(8,432)		(0.2)
Total deposits	$	26,328,972	$	26,129,433	$	199,539	0.8	%

During the three months ended March 31, 2025, total deposits increased by $199.5 million, or 0.8%, compared to December 31, 2024. The increase in total deposits was primarily due to an increase of $416.4 million in savings and money market deposits, partially offset by decreases of $105.4 million, $63.8 million and $39.2 million in brokered deposits, noninterest-bearing demand deposits and interest-bearing demand deposits, respectively.

Total uninsured deposits (excluding intra-Company deposits) as of March 31, 2025 and December 31, 2024 were estimated to be $9.4 billion.

Time deposits of $250 thousand or more were $1.1 billion and $1.0 billion as of March 31, 2025 and December 31, 2024, respectively.

The following table presents ending borrowings by type:


	March 31, 2025		December 31, 2024		Increase (Decrease)
					$		%
	(dollars in thousands)


Federal Home Loan Bank advances	$	750,000	$	850,000	$	(100,000)	(11.8)
Senior debt and subordinated debt	367,396		367,316		80		—
Other borrowings (1)	539,804		564,732		(24,928)		(4.4)
Total borrowings	$	1,657,200	$	1,782,048	$	(124,848)	(7.0)	%

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

During the three months ended March 31, 2025, total borrowings decreased $124.8 million, or 7.0%, compared to December 31, 2024. The decrease in total borrowings was primarily due to decreases in FHLB advances and other borrowings of $100.0 million and $24.9 million, respectively.

Shareholders' Equity

On December 17, 2024, the Corporation announced that its Board of Directors approved the 2025 Repurchase Program. The 2025 Repurchase Program will expire on December 31, 2025. Under the 2025 Repurchase Program, the Corporation is authorized to repurchase up to $125.0 million of shares of its common stock. Under the 2025 Repurchase Program up to $25.0 million may be used to repurchase shares of the Corporation's preferred stock.

On April 15, 2025, the Corporation announced that its Board of Directors approved a supplemental authorization under the 2025 Repurchase Program to repurchase up to $25 million of the Subordinated Notes due 2030; provided that the purchase price of the Corporation's preferred stock and the Subordinated Notes due 2030 may not exceed, in the aggregate, $25 million.

The 2025 Repurchase Program may be discontinued at any time.

During the three months ended March 31, 2025, 31,467 shares of common stock were repurchased under the 2025 Repurchase Program at a total cost of $0.6 million or $17.64 per share.

On May 1, 2024, the Corporation completed its underwritten public offering of 19,166,667 shares of its common stock at a price to the public of $15.00 per share, before underwriting discounts. The net proceeds to the Corporation from the offering after deducting underwriting discounts and transaction expenses were approximately $272.6 million.

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 Common Equity Tier 1 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 March 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 March 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, Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the Capital Rules. There were no other conditions or events since March 31, 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:


	March 31, 2025		December 31, 2024		Regulatory Minimum for Capital Adequacy		With Capital Conservation Buffer
Total Risk-Based Capital (to Risk-Weighted Assets)	14.5	%	14.3	%	8.0	%	10.5	%
Tier I Risk-Based Capital (to Risk-Weighted Assets)	11.9	%	11.5	%	6.0	%	8.5	%
Common Equity Tier I (to Risk-Weighted Assets)	11.1	%	10.8	%	4.5	%	7.0	%
Tier I Leverage Capital (to Average Assets)	9.2	%	9.0	%	4.0	%	4.0	%

Item 3. 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. They are a 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.

Simulation of net interest income is performed for the next 12-month period. A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to measure 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. The Corporation has not changed its established interest rate risk policy limits.

The Corporation's policy limits the potential exposure of net interest income, in a parallel instantaneous shock, to 10% of the base case net interest income for a 100 bps shock in interest rates, 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. The shocks do not take into account changes in customer behavior that could result in changes to mix and/or volumes in the balance sheet, nor does it take into account the potential effects of competition on the pricing of deposits and loans over the forward 12-month period. As of March 31, 2025, the Corporation was within the policy limits for exposure of net interest income for every 100 bps parallel instantaneous shock.

Contractual maturities and repricing opportunities of loans are incorporated in the simulation model as are prepayment assumptions, maturity data and call options within the investment portfolio. Assumptions based on past experience are incorporated into the model for non-maturity deposit accounts. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure 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 and a gradual non-parallel shift, on net interest income as of March 31, 2025:

Parallel Shift

Non-Parallel Shift

Rate Ramp (1)

Annual change
in net interest income

% change in net interest income

Annual change
in net interest income

% change in net interest income

+400 bp

+ $38.0 million

+3.4%

+ $29.3 million

+2.6%

+300 bp

+ $30.7 million

+2.8%

+ $24.1 million

+2.2%

+200 bp

+ $23.2 million

+2.1%

+ $18.6 million

+1.7%

+100 bp

+ $13.8 million

+1.2%

+ $11.5 million

+1.0%

–100 bp

- $9.5 million

-0.8%

- $7.4 million

-0.7%

–200 bp

- $18.7 million

-1.7%

- $13.1 million

-1.2%

–300 bp

- $28.6 million

-2.6%

- $19.3 million

-1.7%

–400 bp

- $39.7 million

-3.6%

- $26.7 million

-2.4%

(1) These 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 and a non-parallel instantaneous shock, on net interest income as of March 31, 2025:

Parallel Instantaneous Shock

Non-Parallel Instantaneous Shock

Rate Shock (1)

Annual change
in net interest income

% change in net interest income

Annual change
in net interest income

% change in net interest income

+400 bp

+ $71.3 million

+6.4%

+ $42.3 million

+3.8%

+300 bp

+ $59.4 million

+5.3%

+ $37.3 million

+3.3%

+200 bp

+ $47.0 million

+4.2%

+ $32.1 million

+2.9%

+100 bp

+ $32.9 million

+2.9%

+ $25.1 million

+2.2%

–100 bp

- $25.2 million

-2.3%

- $16.6 million

-1.5%

–200 bp

- $47.9 million

-4.3%

- $27.7 million

-2.5%

–300 bp

- $79.0 million

-7.1%

- $44.0 million

-3.9%

–400 bp

- $109.8 million

-9.8%

- $58.4 million

-5.2%

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

Economic value of equity estimates the discounted present value of asset and liability cash flows. Discount rates are based upon market prices for like assets and liabilities. Abrupt changes or "shocks" in interest rates, both upward and downward, are used to determine 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 balance sheet. 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 in interest rates, 20% for a 200 bps shock, 30% for a 300 bps shock and 40% for a 400 bps shock. As of March 31, 2025, the Corporation was within economic value of equity policy limits for every 100 bps parallel instantaneous shock.

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 the variable cash flows associated with existing floating rate 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 received or made on the Corporation's loans and borrowings.

In October 2024, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $250.0 million. As the hedged transaction continues to be probable, the unrealized losses will continue to be included in AOCI and will be recognized as an increase to interest expense when the previously forecasted hedged items affect earnings in future periods. During the three months ended March 31, 2025, $0.2 million of these unrealized losses have been reclassified as an increase to interest expense on borrowings in the Consolidated Statements of Income.

In January 2023, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional amount of $1.0 billion. As the hedged transaction continues to be probable, the unrealized losses that have been recorded in AOCI will be recognized as a reduction to interest income, when the previously forecasted hedged item affects earnings in future periods. During the three months ended March 31, 2025, $3.3 million of these unrealized losses have been reclassified as a reduction of interest income on loans, in 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 March 31, 2025, the Bank had total borrowing capacity of approximately $11.4 billion with $5.0 billion of advances and letters of credit outstanding, for a remaining available borrowing capacity of approximately $6.4 billion under these facilities. Advances from the FHLB, when utilized, are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets.

As of March 31, 2025, the Corporation had aggregate federal funds lines borrowing capacity of $2.6 billion with no amounts outstanding against that amount. As of March 31, 2025, the Corporation had $4.0 billion of collateralized borrowing capacity at the FRB discount window with no amounts outstanding and had no borrowings drawn against the Bank Term Funding Program facility, which expired March 11, 2024.

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 March 31, 2025 and $0.3 billion at December 31, 2024 were pledged as collateral to secure public and trust deposits.

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 subsidiary banks to the parent company in the form of loans and dividends. Generally, these

limitations are based on the subsidiary banks’ regulatory capital levels and their 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 in Part I. "Item 1. Financial Statements" provide additional information. The Corporation's operating activities during the three months ended March 31, 2025 generated $0.7 million of cash. Cash used by investing activities was $74.3 million and was primarily due to a net increase in investment securities. Cash provided by financing activities was $40.2 million primarily due to a net increase in deposits, partially offset by the repayment of borrowings.

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 U.S. government-sponsored agency 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 U.S. government-sponsored agencies.

State and Municipal Securities

As of March 31, 2025, the Corporation owned securities issued by various states and municipalities with a total fair value of $0.8 billion. 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 March 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 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Corporation carried out an evaluation, under the supervision and with the participation of the Corporation's management, including the Corporation's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures pursuant to Rule 13a-15, promulgated under the Exchange Act. Based upon that evaluation, the Corporation's Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, the Corporation's disclosure controls and procedures are effective. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in Corporation reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in the "Legal Proceedings" section of Note 14 "Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Part I, "Item 1. Financial Statements" in this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) None.


(c) Period	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2025 to January 31, 2025	—	$	—	—	$	125,000,000
February 1, 2025 to February 28, 2025	—	—		—	125,000,000
March 1, 2025 to March 31, 2025	31,467	17.64		31,467	124,444,911

(1) Includes 1% excise tax

As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases may be made from time to time under the 2025 Repurchase Program in open market or privately negotiated transactions, including without limitation, through accelerated share repurchase transactions. The 2025 Repurchase Program may be discontinued at any time.

During the three months ended March 31, 2025, 31,467 shares of common stock were repurchased under the 2025 Repurchase Program at a total cost of $0.6 million or $17.64 per share.

Item 5. Other Information

(c) None of the Corporation's directors or "officers" (as defined in Rule 16a-1(f) (17 C.F.R. § 240.16a-1(f))) adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K (17 C.F.R. § 229.408)) during the fiscal quarter ended March 31, 2025.

Item 6. Exhibits




2.1						Purchase and Assumption Agreement – Whole Bank, All Deposits, effective as of April 26, 2024, with the Federal Deposit Insurance Corporation, as receiver of Republic First Bank, the Federal Deposit Insurance Corporation, and Fulton Bank, National Association (Incorporated by reference to Exhibit 2.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on May 2, 2024).
3.1						Articles of Incorporation, as amended and restated, of Fulton Financial Corporation as amended (Incorporated by reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report Form 8-K filed June 24, 2011).
3.2						Statement with Respect to Shares of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A of Fulton Financial Corporation, dated October 23, 2020, filed with the Pennsylvania Department of State (Incorporated by reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on October 29, 2020).
3.3						Bylaws of Fulton Financial Corporation as amended (Incorporated by reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on a Form 8-K filed May 14, 2021).

4.1						Deposit Agreement, dated October 29, 2020, among Fulton Financial Corporation, Equiniti Trust Company, as depositary, and the holders from time to time of the depositary receipts described therein (Incorporated by reference to Exhibit 4.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on October 29, 2020).
4.2						Form of depositary receipt representing the Depositary Shares (Included in Exhibit 4.2).
4.3						Stock Certificate (Incorporated by reference as Exhibit 4.1 of Fulton Financial Corporation Registration Statement on Form S-4 filed on April 21, 2022).
10.1						Form of Time-Vested Restricted Stock Unit Award Agreement – filed herewith.*
10.2						Form of Performance Restricted Stock Unit Award Agreement Total Shareholder Return ( " TRS " ) Component – filed herewith.*



31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
104						Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101)
*						Certain attachments to Exhibit 10.1 and Exhibit 10.2 have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted attachments will be furnished to the SEC upon request.

FULTON FINANCIAL CORPORATION AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FULTON FINANCIAL CORPORATION

Date:

May 9, 2025

/s/ Curtis J. Myers

Curtis J. Myers

Chairman and Chief Executive Officer

Date:

May 9, 2025

/s/ Richard S. Kraemer

Richard S. Kraemer

Senior Executive Vice President and Chief Financial Officer

TABLE OF CONTENTS

Item 1. Financial Statements Note 1 Basis Of Presentation Note 2 Business Combinations Note 3 Restrictions on Cash and Cash Equivalents Note 4 Investment Securities Note 5 - Loans and Allowance For Credit Losses Note 6 Mortgage Servicing Rights Note 7 Derivative Financial Instruments Note 8 Accumulated Other Comprehensive (loss) Income Note 9 Fair Value Measurements Note 10 Net Income Per Share Note 11 Stock-based Compensation Note 12 Employee Benefit Plans Note 13 - Segment Reporting Note 14 Commitments and Contingencies Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 5. Other Information Item 6. Exhibits

Exhibits

FULT 10-Q Quarter ended March 31, 2025

Exhibits