SAUL CENTERS, INC.

Previous wording

The Company’s primary strategy is to continue to focus on diversification of its assets through development of transit-oriented, residential mixed-use projects and expansion of and additions to its grocery-anchored shopping centers in the Washington, DC metropolitan area. The Company’s operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping Centers through the additions of pad sites, and supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. Including Twinbrook Quarter and Hampden House, the Company has a pipeline of entitled sites in its portfolio, some of which are currently Shopping Centers, for development of up to an additional 3,200 apartment units and 870,000 square feet of retail and office space. All such sites are located proximate to Washington Metropolitan Area Transit Authority red line Metro stations in Montgomery County, Maryland.

Current wording

The Company's primary strategy is to continue to diversify its assets through development of transit-oriented, residential mixed-use projects and expansion of and additions to its grocery-anchored Shopping Centers in the Washington, DC/Baltimore metropolitan area. The Company's operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping Centers through the addition of pad sites, and supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. The Company has a pipeline of entitled sites in its portfolio, some of which are currently Shopping Centers, for development of up to 2,500 apartment units and 850,000 square feet of retail and office space. All such sites are located proximate to Washington Metropolitan Area Transit Authority red line Metro stations in Montgomery County, Maryland. In addition, the Company recently entered into a lease with Publix to develop a new grocery store at Ashland Square in Prince William County, Virginia. When complete, Ashland Square is expected to ultimately comprise approximately 124,000 square feet of retail space including the 50,325 square foot Publix, three existing pad sites, four additional pad sites and approximately 30,000 square feet of small shop space.

Previous wording

The Company intends to selectively add free-standing pad site buildings within its Shopping Center portfolio and replace underperforming tenants with tenants that generate strong traffic, including anchor stores such as grocery stores. The Company has two executed leases and four leases are under negotiation for a total of six more pad sites.

Current wording

The Company intends to selectively add free-standing pad site buildings within its Shopping Center portfolio and replace underperforming tenants with tenants that generate strong traffic, including anchor stores such as grocery stores. The Company has two executed leases and six leases are under negotiation for a total of eight more pad sites.

Previous wording

Actions taken by the Federal government will likely continue to impact the office, retail and residential real estate markets over the coming years. Because the majority of the Company’s property operating income is produced by our Shopping Centers, we continually monitor the implications of government policy changes, as well as shifts in consumer demand between on-line and in-store shopping, on future shopping center construction and retailer store expansion and closure plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in ways to maximize our future performance. The Company's commercial leasing percentage, on a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, increased to 95.2% at December 31, 2024, from 94.1% at December 31, 2023.

Current wording

Actions taken by the Federal government will likely continue to impact the office, retail and residential real estate markets in the Washington, DC/Baltimore metropolitan area over the coming years. Because the majority of the Company’s property net operating income is produced by our Shopping Centers, we continually monitor the implications of government policy changes, as well as shifts in consumer demand between on-line and in-store shopping, on future shopping center construction and retailer store expansion and closure plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in ways to maximize our future performance. The Company's commercial leasing percentage, on a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, decreased to 94.6% at December 31, 2025, from 95.2% at December 31, 2024.

Previous wording

The Company maintains a ratio of total debt to total asset value of under 50%, which allows the Company to obtain additional secured borrowings if necessary. As of December 31, 2024, including $100.0 million of hedged variable-rate debt, total fixed-rate debt with staggered maturities from 2026 to 2041 represented approximately 88.0% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s unhedged variable-rate debt consists of $187.0 million outstanding under the Credit Facility. As of December 31, 2024, the Company has availability of approximately $134.5 million under its Credit Facility.

Current wording

The Company maintains a ratio of total debt to total asset value of under 50%, which allows us to obtain additional secured borrowings if necessary. As of December 31, 2025, including $100.0 million of hedged variable-rate debt, total fixed-rate debt with staggered maturities from 2026 to 2041 represented approximately 88.4% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s unhedged variable-rate debt consists of $189.0 million outstanding under the New Credit Facility. As of December 31, 2025, the Company has availability of approximately $96.2 million under its New Credit Facility.

Previous wording

Total revenue increased 4.5% in 2024 compared to 2023 as described below.

Current wording

Total revenue increased 7.8% in 2025 compared to 2024 as described below.

Previous wording

Base rent: Base rent includes $(7.8) million and $(0.6) million for 2024 and 2023, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $0.8 million and $1.3 million for 2024 and 2023, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties. The $8.3 million increase in base rent in 2024 compared to 2023 was primarily attributable to (a) higher commercial base rent of $6.4 million and (b) higher residential rent of $1.9 million.

Current wording

Base rent: Base rent includes $9.5 million and $(7.8) million for 2025 and 2024, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $0.6 million and $0.8 million for 2025 and 2024, respectively, to recognize income from the accretion of discounts related to in-place leases acquired in connection with purchased real estate investment properties. The $20.8 million increase in base rent in 2025 compared to 2024 was primarily attributable to (a) higher residential and commercial base rent related to Twinbrook Quarter Phase I of $11.0 million, (b) higher commercial base rent, exclusive of Twinbrook Quarter Phase I and Hampden House, of $7.7 million, (c) higher residential base rent, exclusive of Twinbrook Quarter Phase I and Hampden House, of $1.4 million and (d) higher residential and commercial base rent of Hampden House of $0.7 million.

Previous wording

Expense recoveries: The $3.7 million increase in expense recoveries in 2024 compared to 2023 is primarily attributable to an increase in recoverable property operating expenses.

Current wording

Expense recoveries: The $3.5 million increase in expense recoveries in 2025 compared to 2024 is primarily attributable to an increase in recoverable property operating expenses.

Previous wording

Credit (losses) recoveries on operating lease receivables, net: Credit (losses) recoveries on operating lease receivables, net was a loss of $0.9 million during 2024. The loss is primarily due to higher reserve on lease receivables in 2024.

Current wording

Credit losses on operating lease receivables, net: Credit losses on operating lease receivables, net was a loss of $1.7 million during 2025. The loss is primarily due to higher reserves on lease receivables in 2025.

Previous wording

Other Revenue: The $0.5 million decrease in other revenue was primarily due to lower parking revenue of $0.3 million.

Current wording

Other Revenue: The $2.2 million decrease in other revenue was primarily due to (a) lower lease termination fees of $2.6 million partially offset by (b) higher parking revenue of $0.4 million.

Previous wording

Real estate taxes: Real estate taxes increased $0.7 million in 2024 compared to 2023, which was due to higher tax assessments across the portfolio.

Current wording

Real estate taxes: Real estate taxes increased $2.1 million in 2025 compared to 2024, primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $1.1 million and Hampden House of $0.6 million and (b) higher tax assessments across the portfolio, exclusive of Twinbrook Quarter Phase I and Hampden House.

Previous wording

Interest expense, net and amortization of deferred debt costs: Interest expense, net and amortization of deferred debt costs increased $4.5 million in 2024 compared to 2023 primarily due to (a) $7.9 million of higher interest incurred as a result of higher average outstanding debt partially offset by (b) $0.3 million of lower interest incurred as a result of lower average interest rates and (c) higher capitalized interest of $3.3 million related to Twinbrook Quarter Phase I and Hampden House.

Current wording

Interest expense, net and amortization of deferred debt costs: Interest expense, net and amortization of deferred debt costs increased 31.4% in 2025 compared to 2024 primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $14.8 million and Hampden House of $2.8 million, (b) $2.1 million of higher interest incurred as a result of higher average outstanding debt and (c) higher amortization of deferred debt costs of $0.6 million partially offset by (d) $2.8 million of lower interest incurred as a result of lower average interest rates and (e) higher capitalized interest, exclusive of Twinbrook Quarter Phase I and Hampden House, prior to Hampden House opening on October 1, 2025, of $0.6 million.

Previous wording

Depreciation and amortization of deferred leasing costs: Depreciation and amortization of deferred leasing costs increased $2.1 million in 2024 compared to 2023 primarily due to Twinbrook Quarter Phase I assets being placed in service during 2024.

Current wording

Depreciation and amortization of deferred leasing costs: Depreciation and amortization of deferred leasing costs increased $8.3 million in 2025 compared to 2024 primarily due to Twinbrook Quarter Phase I of $6.7 million and Hampden House of $1.6 million as a result of being placed into service in 2024 and 2025, respectively.

Previous wording

Same property revenue and same property operating income are non-GAAP financial measures of performance and improve the comparability of these measures by excluding the results of properties which were not in operation for the entirety of the comparable reporting periods.

Current wording

Same property revenue and same property net operating income are non-GAAP financial measures of performance intended to enhance period-to-period comparability by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.

Previous wording

We define same property revenue as total revenue less straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on the early extinguishment of debt minus (f) gains on sale of property, (g) straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties and (h) the operating income of properties that were not in operation for the entirety of the comparable periods.

Current wording

We define same property revenue as total revenue less straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property net operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on the early extinguishment of debt minus (f) gains on sale of property, (g) straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties and (h) the operating income of properties that were not in operation for the entirety of the comparable periods.

Previous wording

Other REITs may use different methodologies for calculating same property revenue and same property operating income. Accordingly, our same property revenue and same property operating income may not be comparable to those of other REITs.

Current wording

Other REITs may use different methodologies for calculating same property revenue and same property net operating income. Accordingly, our same property revenue and same property net operating income may not be comparable to those of other REITs.

Previous wording

Same property revenue and same property operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of our properties. We believe the exclusion of these items from revenue and operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

Current wording

Same property revenue and same property net operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of our properties. We believe the exclusion of these items from revenue and operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

Previous wording

Same property revenue and same property operating income are measures of the operating performance of our properties but do not measure our performance as a whole. Such measures are therefore not substitutes for total revenue, net income or operating income as computed in accordance with GAAP.

Current wording

Same property revenue and same property net operating income are measures of the operating performance of our properties but do not measure our performance as a whole. Such measures are therefore not substitutes for total revenue, net income or operating income as computed in accordance with GAAP.

Previous wording

The tables below provide reconciliations of property revenue and property operating income under GAAP to same property revenue and same property operating income for the indicated periods. One property, Twinbrook Quarter Phase I, was excluded from same property results.

Current wording

The tables below provide reconciliations of property revenue and property net operating income under GAAP to same property revenue and same property net operating income for the indicated periods. Two properties, Twinbrook Quarter Phase I and Hampden House, were excluded from same property results.

Previous wording

The $10.0 million increase in same property revenue in 2024 compared to 2023 was primarily due to (a) higher commercial base rent of $5.5 million, (b) higher property operating expense recoveries of $3.7 million and (c) higher residential base rent of $1.3 million partially offset by (d) higher credit losses on operating receivables of $0.3 million.

Current wording

The $1.7 million increase in same property revenue in 2025 compared to 2024 was primarily due to (a) higher property operating expense recoveries of $3.1 million, (b) higher residential base rent of $1.3 million and (c) higher commercial base rent of $1.3 million partially offset by (d) lower lease terminations fees of $2.6 million (e) higher credit losses on lease operating receivables, net, of $0.8 million and (f) lower other property revenue primarily attributable to insurance proceeds in the 2024 relating to lost rents because of a tenant that temporarily closed its operations of $0.5 million.

Previous wording

Mixed-Use same property operating income is composed of the following:

Current wording

Mixed-Use same property net operating income is composed of the following:

Previous wording

Cash and cash equivalents were $10.3 million and $8.4 million at December 31, 2024 and 2023, respectively. The changes in cash and cash equivalents during the years ended December 31, 2024 and 2023 were attributable to operating, investing and financing activities, as described below.

Current wording

Cash and cash equivalents were $8.7 million and $10.3 million at December 31, 2025 and 2024, respectively. The changes in cash and cash equivalents during the years ended December 31, 2025 and 2024 were attributable to operating, investing and financing activities, as described below.

Previous wording

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $14.9 million decrease in cash used in investing activities is primarily due to (a) decreased development expenditures of $25.8 million partially offset by (b) increased additions to real estate investments throughout the portfolio of $11.0 million.

Current wording

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $92.9 million decrease in cash used in investing activities is primarily due to (a) decreased development expenditures of $98.9 million partially offset by (b) increased additions to real estate investments throughout the portfolio of $5.9 million.

Previous wording

Net cash provided by financing activities represents (a) cash received from loan proceeds and issuance of common stock, preferred stock and limited partnership units minus (b) cash used to repay and curtail loans, redeem preferred stock and pay dividends and distributions to holders of common stock, preferred stock and limited partnership units. See Note 5 to the Consolidated Financial Statements for a discussion of financing activity.

Current wording

Net cash provided by (used in) financing activities represents (a) cash received from loan proceeds and issuance of common stock, preferred stock and limited partnership units minus (b) cash used to repay and curtail loans, redeem preferred stock and pay dividends and distributions to holders of common stock, preferred stock and limited partnership units. See Note 5 to the Consolidated Financial Statements for a discussion of financing activity.

Previous wording

Short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service requirements (including debt service relating to additional and replacement debt), distributions to common and preferred stockholders, distributions to unit holders, and amounts required for expansion and renovation of the Current Portfolio Properties and selective acquisition and development of additional properties. In order to qualify as a REIT for federal income tax purposes, the Company must distribute to its stockholders at least 90% of its “real estate investment trust taxable income,” as defined in the Code. The Company expects to meet these short-term liquidity requirements (other than amounts required for additional property acquisitions and developments) through cash provided from operations, available cash and its existing line of credit.

Current wording

Short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service requirements (including debt service relating to additional and replacement debt), distributions to common and preferred stockholders, distributions to unit holders, and amounts required for expansion and renovation of the Current Portfolio Properties and selective acquisition and development of additional properties. To qualify as a REIT for federal income tax purposes, the Company must distribute to its stockholders at least 90% of its “real estate investment trust taxable income,” as defined in the Code. The Company expects to meet these short-term liquidity requirements (other than amounts required for additional property acquisitions and developments) through cash provided from operations, available cash and its existing line of credit.

Previous wording

The Company is developing Twinbrook Quarter Phase I (“Phase I”) located in Rockville, Maryland. The residential portion of Phase I was delivered on October 1, 2024 and includes 452 apartment units. The remaining portions of Phase I include an 80,000 square foot Wegmans supermarket, approximately 25,000 square feet of small shop space, and a 230,000 square foot office building. The office tower portion of Phase I is not being constructed at this time. In connection with the development of the residential and retail portions of Phase I, we also invested in infrastructure and other items that will support both Phase I and other portions of the development of Twinbrook Quarter. Excluding imputed capitalized interest, the total cost of the project is expected to be approximately $331.5 million, of which $271.4 million is related to the development of the residential and retail portions of Phase I and $60.1 million is related to infrastructure and other items. Of the expected $331.5 million total cost, $318.0 million has been invested to date. A portion of the cost of the project is being financed by a $145.0 million construction-to-permanent loan. During the second quarter of 2023, the Company commenced drawing on the loan and, as of December 31, 2024, the outstanding balance of the loan was $127.3 million, net of unamortized deferred debt costs. Construction of the residential building is complete and The Milton at Twinbrook Quarter opened and residential tenants began moving in on October 1, 2024. As of February 24, 2025, 202 residential units have been leased and occupied. Of the approximately 105,000 square feet of ground floor retail, the base building is complete and 96,600 square feet (92.0%) has been leased. The leased retail space, including Wegmans, is expected to open at various times over 2025 and 2026 as tenants complete their buildouts. The development potential of all phases of the entire 18.4 acre Twinbrook Quarter site totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.

Current wording

The Company is developing Twinbrook Quarter Phase I located in Rockville, Maryland. It includes 452 apartment units, an 81,000 square foot Wegmans supermarket, approximately 25,000 square feet of small shop space, and a 230,000 square foot office building. The office tower portion is not being constructed at this time. In connection with the development of the residential and retail portions of Twinbrook Quarter Phase I, we also invested in infrastructure and other items that will support both Twinbrook Quarter Phase I and other portions of the development of Twinbrook Quarter. Excluding imputed capitalized interest, the remaining investment to complete Twinbrook Quarter Phase I is not expected to exceed $9.9 million. A portion of the cost of the project is being financed by a $145.0 million construction-to-permanent loan. As of December 31, 2025, the outstanding balance of the loan was $139.3 million, net of unamortized deferred debt costs. The Milton at Twinbrook Quarter opened and residential tenants began moving in on October 1, 2024. As of February 23, 2026, 440 of the 452 (97.3%) residential units were leased and occupied. Of the approximately 106,000 square feet of ground floor retail, the base building is complete and 101,400 square feet (95.7%) has been leased. The Wegmans supermarket at Twinbrook Quarter opened for business on June 25, 2025. As of February 23, 2026, including the Wegmans supermarket, approximately 88,500 square feet of the retail space is open and the remaining leased retail space is expected to open at various times during 2026 as tenants complete their buildouts. The development potential of all phases of the entire 18.4 acre Twinbrook Quarter site totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.

Previous wording

The Company is developing Hampden House, a project located in downtown Bethesda, Maryland that will include up to 366 apartment units and 10,100 square feet of retail space. Excluding imputed capitalized interest, the total cost of the project is expected to be approximately $246.4 million, of which $200.5 million has been invested to date. A portion of the cost of the project is being financed by a $133.0 million construction-to-permanent loan. During the fourth quarter of 2023, the Company commenced drawing on the loan and, as of December 31, 2024, the outstanding balance of the loan was $71.4 million, net of unamortized deferred debt costs. Exterior façade installation is nearing completion. Interior construction and installation of unit finishes continues. Delivery and opening is expected in late 2025.

Current wording

The Company is also developing Hampden House, located in downtown Bethesda, Maryland, which includes 366 apartment units and 10,100 square feet of retail space. Excluding imputed capitalized interest, the remaining investment to complete the project is not expected to exceed $6.8 million. A portion of the cost of the project is being financed by a $133.0 million construction-to-permanent loan. As of December 31, 2025, the outstanding balance of the loan was $115.4 million, net of unamortized deferred debt costs. Hampden House opened and residential tenants began moving in on October 1, 2025. As of February 23, 2026, 130 of the 366 (35.5%) residential units are leased and occupied. Of the approximately 10,100 square feet of ground floor retail, 8,600 square feet (85.1%) has been leased and tenant build-outs are in progress.

Previous wording

As of December 31, 2024, the Company had unfunded contractual payment obligations totaling approximately $333.4 million, excluding operating obligations, due within the next 12 months. The table below shows the total contractual payment obligations as of December 31, 2024.

Current wording

As of December 31, 2025, the Company had unfunded contractual payment obligations totaling approximately $239.7 million, excluding operating obligations, due within the next 12 months. The table below shows the total contractual payment obligations as of December 31, 2025.

Previous wording

(1)Includes $187.0 million outstanding under the Credit Facility. See Note 5 to the Consolidate Financial Statements.

Current wording

(1)Includes$289.0 million outstanding under the New Credit Facility. See Note 5 to the Consolidated Financial Statements.

Previous wording

In December 1995, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “Plan”) to allow its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Company issued 57,689 and 53,716 shares under the Plan at a weighted average discounted price of $37.50 and $36.46 per share during the years ended December 31, 2024 and 2023, respectively. The Company issued 431,495 and 44,500 limited partnership units under the Plan at a weighted average price of $38.20 and $33.83 per unit during the years ended December 31, 2024 and 2023, respectively. The Company also credited 7,539 and 7,643 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $37.50 and $36.50 per share, during the years ended December 31, 2024 and 2023, respectively.

Current wording

In December 1995, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “Plan”) to allow its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Company issued 95,370 and 57,689 shares under the Plan at a weighted average discounted price of $30.77 and $37.50 per share during the years ended December 31, 2025 and 2024, respectively. The Company issued 603,868 and 431,495 limited partnership units under the Plan at a weighted average price of $30.95 and $38.20 per unit during the years ended December 31, 2025 and 2024, respectively. The Company also credited 9,174 and 7,539 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $31.49 and $37.50 per share, during the years ended December 31, 2025 and 2024, respectively.

Previous wording

On December 18, 2024, the Company closed on a 15-year, non-recourse, $50.0 million mortgage secured by Ashburn Village Shopping Center. The loan matures in 2040, bears interest at a fixed-rate of 5.47%, requires monthly principal and interest payments of $306,100 based on a 25-year amortization schedule and requires a final principal payment of $28.4 million at maturity. Proceeds were used to repay the remaining balance of approximately $20.5 million on the existing mortgage and reduce the outstanding balance of the Company’s Credit Facility.

Current wording

On December 15, 2025, the Company closed on a 14-year, non-recourse, $15.0 million mortgage secured by Ravenwood. The loan matures in 2040, bears interest at a fixed-rate of 5.58%, requires monthly principal and interest payments of $92,800 based on a 25-year amortization schedule and requires a final payment of $9.2 million at maturity. Proceeds were used to repay the remaining balance of approximately $10.0 million on the existing mortgage and reduce the outstanding balance of the New Credit Facility.

Previous wording

On September 24, 2024, the Company closed on a 15-year, $70.0 million mortgage secured by Thruway Shopping Center. The loan matures in 2039, bears interest at a fixed-rate of 6.41%, requires monthly principal and interest payments of $468,700 based on a 25-year amortization schedule and requires a final principal payment of $41.7 million at maturity. Proceeds were used to reduce the outstanding balance of the Company’s Credit Facility.

Current wording

On December 17, 2025, the Company closed on a 15-year, non-recourse, $46.0 million mortgage secured by Lansdowne Town Center. The loan matures in 2041, bears interest at a fixed-rate of 5.74%, requires monthly principal and interest payments of $289,100 based on a 25-year amortization schedule and requires a final payment of $26.6 million at maturity. Proceeds were used to reduce the outstanding balance of the New Credit Facility.

Previous wording

** The interest rate incurred on our variable rate debt changes monthly and is based on the 1-month Term Secured Overnight Financing Rate (“SOFR”) rate plus a 0.10% SOFR credit spread plus the applicable margin on the Credit Facility, which was 1.40% as of December 31, 2024.

Current wording

** At December 31, 2025, the interest rate incurred on our variable rate debt is based on the 1-month Term Secured Overnight Financing Rate (“SOFR”) plus a spread.

Previous wording

In 2024, the Company reported Funds From Operations (“FFO”)1 available to common stockholders and noncontrolling interests of $106.8 million, a 0.5% increased from 2023 FFO available to common stockholders and noncontrolling interests of $106.3 million. FFO available to common stockholders and noncontrolling interests increased primarily due to (a) higher commercial base rent of $6.4 million and (b) higher residential rent of $1.3 million partially offset by (c) the initial operations of Twinbrook Quarter Phase I, which adversely impacted FFO by $5.0 million (d) higher general and administrative costs of $1.2 million and (e) higher credit losses on operating lease receivables of $0.8 million. The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:

Current wording

Funds From Operations (“FFO”)1 available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) for 2025 totaled $96.7 million, a 9.5% decrease from 2024 FFO available to common stockholders and noncontrolling interests of $106.8 million. FFO available to common stockholders and noncontrolling interests was adversely impacted by $11.2 million, or $0.32 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I and Hampden House. Exclusive of Twinbrook Quarter Phase I and Hampden House, FFO available to common stockholders and noncontrolling interest increased by $1.2 million primarily due to (a) higher commercial base rent of $7.7 million and (b) higher residential rent of $1.4 million partially offset by (c) lower lease termination fees of $2.6 million, (d) lower property operating expense recoveries, net of expenses of $2.5 million, (e) higher general and administrative expenses of $1.5 million, (f) higher credit losses on operating lease receivables, net, of $0.8 million and (g) lower other property revenue of $0.5 million. The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:

Previous wording

Management anticipates that during the coming year, the Company may redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s credit line, construction financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external capital resources available to the Company.

Current wording

Management anticipates that during the coming year, the Company may redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s New Credit Facility, construction financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external capital resources available to the Company.

Previous wording

On May 17, 2024, following shareholder approval, the Company established the Saul Centers, Inc. 2024 Stock Incentive Plan (the “Incentive Plan”), under which various equity incentives may be granted. On May 17, 2024, the Company granted 117,000 restricted shares to officers, divided equally between time-vested and performance-based awards. On May 20, 2024, the Company granted 18,000 restricted shares to non-employee directors, which will vest on an annual basis over three years.

Current wording

On May 17, 2024, following shareholder approval, the Company established the Saul Centers, Inc. 2024 Stock Incentive Plan (the “Incentive Plan”), under which various equity incentives may be granted. On May 9, 2025, the Company granted 59,500 shares of restricted stock to officers, that will vest on an annual basis over five years, 16,000 shares of restricted stock to non-employee directors, which will vest on an annual basis over three years, and 59,500 performance-based shares of restricted stock to officers, which will vest on the fifth anniversary of the grant date.

Previous wording

The Company uses the fair value method to value and account for restricted stock grants. The fair value of restricted stock granted is determined at the time of the grant using a discounted cash flow analysis, and the following assumptions: (1) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; (2) the closing price of the Company’s common stock on the date of the grant; (3) estimated forfeitures; and (4) a present value discount rate equal to the Expected Dividend Yield.

Current wording

The Company uses the fair value method to value and account for restricted stock awards. The fair value of granted restricted stock is determined at the time of the grant using a discounted cash flow analysis, and the following assumptions: (1) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; (2) the closing price of the Company’s common stock on the date of the grant; (3) estimated forfeitures; and (4) a present value discount rate equal to the Expected Dividend Yield.

Previous wording

For the year ended December 31, 2024, restricted stock compensation expense totaled $0.5 million, which was included in general and administrative expense in the Consolidated Statement of Operations. As of December 31, 2024, the estimated future expense related to unvested restricted stock grants was approximately $3.2 million.

Current wording

For the year ended December 31, 2025, restricted stock compensation expense totaled $1.3 million, which was included in general and administrative expense in the Consolidated Statement of Operations. As of December 31, 2025, the estimated future expense related to unvested restricted stock awards that are granted for accounting purposes was approximately $5.5 million.

Previous wording

For accounting purposes, performance-based awards are not treated as granted until the Board establishes the target for those awards. As of December 31, 2024, (a) no expense has been recognized and (b) no estimate of future expense has been made for the 35,100 performance-based restricted shares awarded to officers where the accounting grant date has not occurred. If those awards had been granted for accounting purposes as of December 31, 2024, the additional estimated future expense would have been approximately $1.3 million, calculated using the fair value method and based on the closing share price of $38.80 on December 31, 2024, the final trading day of 2024.

Current wording

As of December 31, 2025, (a) no expense has been recognized and (b) no estimate of future expense has been made for the 59,100 performance-based restricted stock awarded to officers where the accounting grant date has not occurred. If those awards had been granted for accounting purposes as of December 31, 2025, the additional estimated future expense would have been approximately $1.7 million, calculated using the fair value method and based on the closing share price of $31.53 on December 31, 2025, the final trading day of 2025.

Previous wording

The following table sets forth average annualized base rent per square foot and average annualized effective rent per square foot for the Company's commercial properties (all properties except for the apartments within The Waycroft, Clarendon Center, Park Van Ness and The Milton at Twinbrook Quarter properties). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions.

Current wording

The following table sets forth average annualized base rent per square foot and average annualized effective rent per square foot for the Company's commercial properties (all properties except for the apartments within The Waycroft, Clarendon Center, Park Van Ness, The Milton at Twinbrook Quarter and Hampden House properties). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions.

Previous wording

The overall commercial portfolio leasing percentage, on a comparative same property basis, increased to 95.2% at December 31, 2024 from 94.1% at December 31, 2023. Included in the 95.2% of space leased as of December 31, 2024, is approximately 170,422 square feet of space, representing 1.9% of total commercial square footage, that has not been occupied by the tenant. Collectively, these leases are expected to produce approximately $4.4 million of additional annualized base rent, an average of $25.63 per square foot, upon tenant occupancy and following any contractual rent concessions.

Current wording

The overall commercial portfolio leased percentage, on a comparative same property basis, decreased to 94.6% at December 31, 2025 from 95.2% at December 31, 2024. Included in the 94.6% of space leased as of December 31, 2025, is approximately 197,718 square feet of space, representing 2.2% of total commercial square footage, that has not been occupied by the tenant. Collectively, these leases are expected to produce approximately $5.0 million of additional annualized base rent, an average of $25.50 per square foot, upon tenant occupancy and following any contractual rent concessions.