FULTON FINANCIAL CORP

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 reported amounts of assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting 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, 2025.

Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026.

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 unaudited Consolidated Financial Statements are disclosed in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these accounting policies during the three and six months ended June 30, 2026.

Recently Adopted Accounting Standards

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 adopted ASU 2024-04 on January 1, 2026, and its adoption did not have a material impact on its Consolidated Financial Statements.

In July 2025, FASB issued ASU 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets("ASU 2025-05"). This update allows public companies to use a practical expedient when estimating credit losses on current receivables and current customer contracts. The Corporation adopted ASU 2025-05 on January 1, 2026, and its adoption did not have a material impact on its Consolidated Financial Statements.

In September 2025, FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software("ASU 2025-06"). This update modernizes internal-use software guidance to adapt to the agile basis predominantly used to develop software. The Corporation adopted ASU 2025-06 on January 1, 2026, and its adoption did not have a material impact on its Consolidated Financial Statements.

In November 2025, FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements("ASU 2025-09"). This update more closely aligns hedge accounting and financial reporting with risk management activities. The Corporation adopted ASU 2025-09 on January 1, 2026, and its adoption did not have a material impact on its Consolidated Financial Statements.

Recently Issued Accounting Standards

In November 2024, FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense("ASU 2024-03"). This update requires disaggregation of certain expenses in a note to the Consolidated Financial Statements. The Corporation will adopt ASU 2024-03 on January 1, 2027. The Corporation does not expect the adoption of ASU 2024-03 to have a material impact on its Consolidated Financial Statements.

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

In May 2025, FASB issued ASU 2025-03 Business Combination (Topic 805) and Consolidation (Topic 810) - Determining the Accounting Acquirer in an Acquisition of a Variable Interest Entity ("ASU 2025-03"). This update addresses the determination of the accounting acquirer in an acquisition of a variable interest entity. The Corporation will adopt ASU 2025-03 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-03 to have a material impact on its Consolidated Financial Statements.

In May 2025, FASB issued ASU 2025-04 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) - Clarifications to Share-Based Consideration Payable to a Customer ("ASU 2025-04"). This update revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy for most awards granted to customers, and clarifies the applicability of the variable consideration constraint. The Corporation will adopt ASU 2025-04 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-04 to have a material impact on its Consolidated Financial Statements.

In September 2025, FASB issued ASU 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract("ASU 2025-07"). This update refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting and clarifies guidance under Topic 606 for share-based noncash consideration from a customer in revenue contracts. The Corporation will adopt ASU 2025-07 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-07 to have a material impact on its Consolidated Financial Statements.

In December 2025, FASB issued ASU 2025-10 Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities("ASU 2025-10"). This update provides accounting guidance for business entities that receive government grants. The Corporation will adopt ASU 2025-10 on January 1, 2029. The Corporation does not expect the adoption of ASU 2025-10 to have a material impact on its Consolidated Financial Statements.

In December 2025, FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements("ASU 2025-11"). This update improves navigability of the required interim disclosures and clarifies when that guidance is applicable. The Corporation will adopt ASU 2025-11 on January 1, 2028. The Corporation does not expect the adoption of ASU 2025-11 to have a material impact on its Consolidated Financial Statements.

In December 2025, FASB issued ASU 2025-12 Codification Improvements ("ASU 2025-12"). This update makes changes to the Accounting Standards Codification affecting a wide variety of topics to clarify, correct errors and make minor improvements. The Corporation will adopt ASU 2025-12 on January 1, 2027. The Corporation does not expect the adoption of ASU 2025-12 to have a material impact on its Consolidated Financial Statements.

In April 2026, FASB issued ASU 2026-01 Equity (Topic 505): Initial Measurement of Paid‑in‑Kind Dividends on Equity‑Classified Preferred Stock("ASU 2026-01"). This update provides direction on how an issuer should initially measure paid-in-kind dividends on equity-classified preferred stock. The Corporation will adopt ASU 2026-01 on January 1, 2027. The Corporation does not expect the adoption of ASU 2026-01 to have a material impact on its Consolidated Financial Statements.

In May 2026, FASB issued ASU 2026-02 Environmental Credits and Environmental Credit Obligations (Topic 818)("ASU 2026-02"). This update establishes comprehensive accounting and disclosure requirements for environmental credits and environmental credit obligations. The Corporation will adopt ASU 2026-02 on January 1, 2028. The Corporation does not expect the adoption of ASU 2026-02 to have a material impact on its Consolidated Financial Statements.

Reclassifications

Certain amounts in the 2025 Consolidated Financial Statements and related notes have been reclassified to conform to the 2026 presentation.

NOTE 2 –Business Combinations

Blue Foundry Bancorp

On the Acquisition Date, the Corporation completed the Blue Foundry Merger, and Blue Foundry Bank became a wholly owned subsidiary of the Corporation. On July 11, 2026, Blue Foundry Bank merged with and into Fulton Bank at the time of systems conversion.

Pursuant to the terms of the Blue Foundry Merger Agreement, each share of Blue Foundry common stock was converted into the right to receive 0.650 of a share of the Corporation's common stock, with cash paid in lieu of fractional shares. On the Acquisition Date, the Corporation issued an aggregate of 12,435,551 shares of common stock.

The Blue Foundry Merger was accounted for as a business combination using the acquisition method of accounting, and, accordingly, the assets acquired, the liabilities assumed, and consideration transferred were recorded at their estimated fair values as of the Acquisition Date. The $13.9 million excess of merger consideration over the fair value of net assets acquired in the Blue Foundry Merger was recorded as goodwill and is neither amortizable nor deductible for tax purposes.

The following table summarizes the consideration transferred and the estimated fair values of identifiable assets acquired and liabilities assumed in connection with the Blue Foundry Merger on the Acquisition Date:

The values assigned to assets acquired and liabilities assumed and the impact on associated income taxes are preliminary and subject to change up to one year from the Acquisition Date as the Corporation continues to finalize the valuation of loans, premises and equipment, intangible assets and deferred taxes. Adjustments recorded during the measurement period will be recognized retrospectively as if the accounting was completed as of the Acquisition Date.

Goodwill recognized in connection with the Blue Foundry Merger is primarily attributable to the expected synergies from combining operations, including cost savings from systems integration and anticipated growth opportunities.

The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed in the Blue Foundry Merger.

Cash and due from banks: The fair value of cash and due from banks approximates its book value.

Investment securities: A portion of the investment securities portfolio acquired in the Blue Foundry Merger, with a fair value of $142.2 million, was sold shortly after the Acquisition Date. The fair value of the sold portion of the investment portfolio was determined based on the proceeds received from the sale. The remaining investment securities, with a fair value of $84.3 million, were retained in the AFS portfolio and valued using quoted market prices, dealer quotations and pricing information obtained from independent pricing services.

Loans: The Corporation recorded $1.6 billion of acquired loans at their estimated fair values as of the Acquisition Date. The estimated fair value of the loans was based on a discounted cash flow methodology that considered credit loss and prepayment expectations, market interest rates and other market factors from the perspective of a market participant. Loan cash flows were generated on an individual loan basis. The PD, LGD, exposure at default and prepayment assumptions are the key factors driving credit losses that are embedded in the estimated cash flows.

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

The following table summarizes PCD Loans:

The Blue Foundry Merger resulted in the addition of $31.0 million to the ACL, including the $4.1 million identified with respect to PCD Loans.

Intangible Assets: The Corporation recorded a $17.8 million CDI reflected in other assets that is being amortized over seven years using the sum-of-the-years digits method. The CDI estimated fair value was determined using the net cost savings method. The net cost savings method is defined as the difference between the cost of funds of core deposits and an alternative cost of funds for those deposits. The CDI estimated fair value was determined by projecting discounted net cash flows that included assumptions related to customer attrition rates, discount rates, deposit interest rates, deposit account maintenance costs and alternative cost of funding rates.

FHLB stock: The Corporation acquired $14.5 million of FHLB stock. The estimated fair value of the FHLB stock approximated its book value.

Accrued interest receivable: The Corporation acquired $9.2 million accrued interest receivable. The fair value of the accrued interest receivable approximated its book value.

Premises and equipment: The Corporation acquired $19.5 million of premises and equipment. The fair value was measured using comparative market analysis.

Leases: The Corporation acquired a $20.4 million operating lease right-of-use asset reflected in other assets in the Consolidated Balance Sheet and a $22.7 million operating lease liability reflected in other liabilities. The fair value of the operating lease right-of-use asset is measured at the present value of the remaining lease payments adjusted for market terms. The fair value of the operating lease liability is measured at the present value of the remaining lease payments.

Deferred tax assets: The Corporation acquired $57.2 million of deferred tax assets reflected in other assets. The deferred tax assets are deemed to be fully realizable.

Deposits: Demand deposits, savings and money market deposits and time deposits were recorded at book value which approximated their fair value. The Corporation recorded $17.8 million of CDI in other assets for these core deposits.

Borrowings: The Corporation assumed borrowings with a fair value of $276.0 million, which approximated their stated value because these were short-term advances.

Acquisition-related expenses:

The Corporation developed a comprehensive integration plan under which it incurred direct costs that are expensed as incurred. Costs related to the Blue Foundry Merger are included in acquisition-related expenses in the Consolidated Statements of Income.

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

In connection with the Blue Foundry Merger, the Corporation made a $1.5 million donation to the Fulton Forward Foundation designated to be used to provide impact grants in support of nonprofit community organizations in New Jersey.

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

Unaudited Pro Forma Information:

The following table summarizes the results of operations contributed by Blue Foundry Merger presented in the unaudited Consolidated Statements of Income:

Unaudited Pro Forma Statements of Income

The table below presents the pro forma results of the operations of the combined institutions (Blue Foundry and the Corporation) as if the Blue Foundry Merger occurred on January 1, 2025. The pro forma adjustments in the tables below are limited to the effects of fair value mark amortization and accretion and intangible asset amortization and do not consider future cost savings the Corporation expects to achieve from the Blue Foundry Merger. No additional acquisition-related expenses have been included in the pro forma results of operations.

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 June 30, 2026 and December 31, 2025 were $14.9 million and $27.0 million, respectively.

NOTE 4 –Investment Securities

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

Investment securities carried at $322.8 million and $373.3 million at June 30, 2026 and December 31, 2025, respectively, were pledged as collateral to secure public and trust deposits.

The amortized cost and estimated fair values of debt securities as of June 30, 2026, 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.

(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:

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

The Corporation's collateralized mortgage obligations, residential mortgage-backed securities and commercial mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. The change in fair value of these securities is attributable to changes in interest rates and not credit quality. In addition, these securities have principal payments that are guaranteed by GSEs. Therefore, the Corporation did not record an ACL for these securities as of June 30, 2026 and December 31, 2025. 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 June 30, 2026 and December 31, 2025. 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 June 30, 2026 and December 31, 2025. Based on the payment status, rating and management's evaluation of these securities, no ACL was required for corporate debt securities as of June 30, 2026 and December 31, 2025. 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:

(1) Includes unearned income of $40.8 million and $36.8 million as of June 30, 2026 and December 31, 2025, 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:

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

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

(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:

(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 June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, approximately 94% and 88%, respectively, of loans evaluated individually for impairment with principal balances greater than or equal to $1.0 million, whose primary collateral consisted of real estate, were measured at estimated fair value using appraisals performed by state certified third-party appraisers that had been updated in the preceding 12 months, or actual fair value based on active fully-executed letters of intent to purchase or agreements of sale.

Non-accrual Loans

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

As of June 30, 2026 and December 31, 2025, there were $63.3 million and $72.4 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, commercial real estate loans and leases and other 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 independent loan review function provides 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:

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

Total criticized and classified loans at June 30, 2026 decreased $193.2 million, or 13.3%, compared to December 31, 2025. Total criticized and classified loans at June 30, 2026 included $52.0 million acquired in the Blue Foundry Merger.

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, 2025.

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

(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 and consumer loans. For these loans, the most relevant credit quality indicator is delinquency status and the Corporation evaluates credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, for the periods shown:

The following table presents non-performing assets:

(1) Excludes $20.7 million and $19.1 million of residential mortgage properties for which formal foreclosure proceedings were in process as of June 30, 2026 and December 31, 2025, respectively.

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

(1) Includes unearned income.

(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:

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

During the three and six months ended June 30, 2026 and 2025, 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:

There wereno commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as of June 30, 2026.

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:

MSRs represent the economic value of contractual rights to service mortgage loans that have been sold. The total portfolio of mortgage loans serviced by the Corporation for unrelated third parties was $4.0 billion as of June 30, 2026 and December 31, 2025. 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 $54.6 million and $49.9 million as of June 30, 2026 and December 31, 2025, respectively. Based on the Corporation's fair value analysis, it was determined thatno valuation allowance was required as of June 30, 2026.

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" under the heading "Derivative Financial Instruments" in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

(1) Fair values are net of a valuation allowance of $366 thousand as of June 30, 2026 and December 31, 2025.

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

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

During the next twelve months, the Corporation estimates that an additional $8.0 million will be reclassified as a decrease to net interest income.

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

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

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

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

Gains related to changes in fair values of mortgage and commercial loans held for sale were $0.5 million for the three months ended June 30, 2026 compared to a gain of $0.2 million for the three months ended June 30, 2025. Gains related to changes in fair values of mortgage and commercial loans held for sale were $0.2 million for the six months ended June 30, 2026 compared to a gain of $0.3 million for the six months ended June 30, 2025.

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:

(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.

NOTE 8 –Borrowings

In May 2026, the Corporation issued $300.0 million of subordinated notes due May 15, 2036 with a fixed-to-floating rate of 5.95% and an effective rate of 6.27% due to issuance costs. The subordinated notes convert to a floating rate based on three-month term SOFR, plus 217 bps, on May 15, 2031. Net proceeds from the issuance, after underwriting discounts and offering expenses, were approximately $296.0 million. In June 2026, the Corporation used $195.0 million of these proceeds to redeem the Subordinated Notes due 2030.

The issuance and redemption of these subordinated notes is reflected in senior debt and subordinated debt on the Consolidated Balance Sheets.

The Corporation recognized debt extinguishment costs of $0.8 million in connection with the redemption of the Subordinated Notes due 2030, consisting of the write-off of unamortized capitalized debt issuance costs and professional fees. These debt extinguishment costs are included in other non-interest expense in the Consolidated Statement of Income.

NOTE 9 –Accumulated Other Comprehensive Income (Loss)

The following table presents the components of OCI:

(1)Amounts reclassified out of AOCI. Before-tax amounts included in "Interest Income" on the Consolidated Statements of Income.

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

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

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

NOTE 10 –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:

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 and commercial loans held for sale that are measured at fair value. Fair values as of June 30, 2026 and December 31, 2025 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 ($200.1 million at June 30, 2026 and $207.5 million at December 31, 2025) and other corporate debt issued by non-financial institutions ($7.5 million and $7.4 million at June 30, 2026 and December 31, 2025, 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 ($0.6 million and $0.9 million at June 30, 2026 and December 31, 2025, 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 ($1.0 million and $0.6 million at June 30, 2026 and December 31, 2025, respectively) and the fair value of interest rate derivatives ($113.5 million at June 30, 2026 and $128.3 million at December 31, 2025). 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 are 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 ($0.5 million and $0.7 million at June 30, 2026 and December 31, 2025, respectively).

Level 2 liabilities represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors (none at June 30, 2026 and $0.2 million at December 31, 2025) and the fair value of interest rate derivatives ($171.8 million at June 30, 2026 and $170.1 million at December 31, 2025).

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:

(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 June 30, 2026 valuation were 7.4% and 8.6%, 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:

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:

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 June 30, 2026, 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 11 –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):

NOTE 12 –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 June 30, 2026, the Employee Equity Plan had approximately 2.6 million shares reserved for future grants through 2032, and the Directors' Plan had approximately 203.0 thousand 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:

NOTE 13 –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. Employee and employer contributions are 100% vested. Expense related to the 401(k) Retirement Plan for the three and six months ended June 30, 2026 was $3.8 million and $7.6 million, respectively, compared to $3.6 million and $7.1 million for the same periods in 2025.

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

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

In connection with the Prudential Bancorp Merger, the Corporation assumed the obligations of a multiemployer defined benefit pension plan that had previously been closed to new participants. In the second quarter of 2026, the Corporation resolved to merge the multiemployer defined benefit plan with and into the Pension Plan, which resulted in the recognition of a $2.1 million liability, reflected in other expense, in the Consolidated Statements of Income.

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 14 -Segment Reporting

The Corporation hasone 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, 2025.

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

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

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

NOTE 15 –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:

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 June 30, 2026 and December 31, 2025, the total reserve for losses on residential mortgage loans sold was $1.5 million and $1.4 million, respectively, including reserves for both representation and warranty and credit loss exposures. In addition, included as a component of ACL - OBS credit exposures, was $0.4 million and $0.8 million, as of June 30, 2026 and December 31, 2025, 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.

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 subsidiaries, 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:

(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.

Blue Foundry Bancorp

On the Acquisition Date, the Corporation completed the Blue Foundry Merger, and Blue Foundry Bank became a wholly owned subsidiary of the Corporation. In connection with the Blue Foundry Merger, the Corporation acquired approximately $2.1 billion of assets and assumed approximately $1.8 billion of liabilities. The transaction resulted in the recognition of approximately $13.9 million of goodwill primarily attributable to the expected synergies from the Blue Foundry Merger, including cost savings from systems integration and anticipated growth opportunities. The Corporation issued an aggregate of 12,435,551 shares of its common stock on the Acquisition Date. On July 11, 2026, Blue Foundry Bank merged with and into Fulton Bank at the time of systems conversion.

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

Debt Issuance and Redemption

In May 2026, the Corporation issued $300.0 million of subordinated notes due May 15, 2036 with a fixed-to-floating rate of 5.95% and an effective rate of 6.27% due to issuance costs. The subordinated notes convert to a floating rate based on three-month term SOFR, plus 217 bps on May 15, 2031. Net proceeds from the issuance, after underwriting discounts and offering expenses, were approximately $296.0 million. In June 2026, the Corporation applied $195.0 million of these proceeds to the redemption of the Subordinated Notes due 2030.

See "Note 8 - Borrowings" 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 $99.9 million for the three months ended June 30, 2026, a $3.2 million increase compared to $96.6 million for the same period in 2025. Net income available to common shareholders per diluted share was $0.52 for the three months ended June 30, 2026, a $0.01 decrease compared to the same period in 2025.

Net income available to common shareholders was $192.1 million for the six months ended June 30, 2026, a $5.0 million increase compared to $187.1 million for the same period in 2025. Net income available to common shareholders per diluted share was $1.02 for the six months ended June 30, 2026, unchanged compared to the same period in 2025.

Six Months Ended June 30, 2026 Results were Impacted by the Following Items:

•NIM of 3.59%, a 14 bps increase compared to 3.45% for the same period in 2025.

•Net interest income of $546.3 million, a $40.2 million increase compared to $506.1 million for the same period in 2025.

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

•Non-interest income of $149.1 million, a $12.8 million increase compared to $136.4 million for the same period in 2025.

•Non-interest expense of $431.2 million, a $49.0 million increase compared to $382.3 million for the same period in 2025.

•The Corporation repurchased 1,737,650 shares of common stock under the 2026 Repurchase Program at a cost of $35.6 million or an average of $20.51 per share.

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" under the heading "Critical Accounting Policies" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025.

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: