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What changed in OCEANFIRST FINANCIAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of OCEANFIRST FINANCIAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+627 added−492 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in OCEANFIRST FINANCIAL CORP's 2025 10-K

627 paragraphs added · 492 removed · 420 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

185 edited+49 added−22 removed106 unchanged
Biggest changeThe net recoveries for the year ended December 31, 2022 were primarily due to improved credit quality and successful recovery of previously charged-off balances. 14 The following table sets forth the Bank’s ACL by loan category and its percent to total loan ACL at December 31, 2024, 2023 and 2022, and the percent of loans to total loans in each of the categories listed at the dates indicated (dollars in thousands): At December 31, 2024 2023 2022 ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans Commercial real estate - investor $ 30,780 41.8 % 52.2 % $ 27,899 41.6 % 52.5 % $ 21,070 37.1 % 52.1 % Commercial real estate - owner occupied 3,817 5.2 8.9 4,354 6.5 9.3 4,423 7.8 10.1 Commercial and industrial 10,471 14.2 6.4 6,867 10.2 6.5 5,695 10.0 6.3 Residential real estate 27,587 37.5 30.3 27,029 40.3 29.3 24,530 43.2 28.9 Other consumer 952 1.3 2.3 988 1.5 2.5 1,106 2.0 2.7 Total $ 73,607 100.0 % 100.0 % $ 67,137 100.0 % 100.0 % $ 56,824 100.0 % 100.0 % Investment Activities The Bank views its securities portfolio primarily as a source of income and liquidity.
Biggest changeThe following table sets forth the net charge-offs/recoveries and the percent of net charge-offs/recoveries by loan category to average net loans outstanding for the periods indicated (dollars in thousands): At or for the Year Ended December 31, 2025 2024 2023 Net Charge-offs (Recoveries) Ratio of Net Charge-offs (Recoveries) to Average Loans Net Charge-offs (Recoveries) Ratio of Net Charge-offs (Recoveries) to Average Loans Net Charge-offs (Recoveries) Ratio of Net Charge-offs (Recoveries) to Average Loans Net charge-offs (recoveries): Commercial real estate - investor $ 3,353 0.03 % $ 1,440 0.02 % $ 8,344 0.08 % Commercial and industrial: Commercial and industrial – real estate (19) — (32) — (8) — Commercial and industrial – non-real estate 505 0.01 (18) — 104 — Total commercial and industrial 486 — (50) — 96 — Residential real estate 1,360 0.01 (130) — (43) — Other consumer 246 — 295 — (15) — Total net charge-offs (recoveries) 5,445 0.05 % 1,555 0.02 % 8,382 0.08 % Average net loans outstanding during the year $ 10,265,245 $ 10,019,531 $ 10,016,859 17 The following table sets forth the Bank’s ACL by loan category and its percent to total loan ACL at December 31, 2025, 2024 and 2023, and the percent of loans to total loans in each of the categories listed at the dates indicated (dollars in thousands): At December 31, 2025 2024 2023 ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans ACL Amount Percent of ACL to Total ACL Percent of Loans to Total Loans Commercial real estate - investor $ 29,944 35.8 % 49.1 % $ 30,780 41.8 % 52.2 % $ 27,899 41.6 % 52.5 % Commercial and industrial – real estate 4,753 5.7 8.9 3,817 5.2 8.9 4,354 6.5 9.3 Commercial and industrial – non-real estate 23,376 27.9 11.1 10,471 14.2 6.4 6,867 10.2 6.5 Residential real estate 24,680 29.5 29.0 27,587 37.5 30.3 27,029 40.3 29.3 Other consumer 973 1.2 1.8 952 1.3 2.3 988 1.5 2.5 Total $ 83,726 100.0 % 100.0 % $ 73,607 100.0 % 100.0 % $ 67,137 100.0 % 100.0 % Investment Activities The Bank views its securities portfolio primarily as a source of income and liquidity.
Generally, investor owned commercial real estate loans are supported by full or partial personal guarantees by the principals. Generally, for investor owned commercial real estate loans in excess of $750,000, the Bank requires environmental professionals to inspect the property and ascertain any potential environmental risks.
Generally, investor owned commercial real estate loans are supported by full or partial personal guarantees by the principals. For investor owned commercial real estate loans in excess of $750,000, the Bank generally requires environmental professionals to inspect the property and ascertain any potential environmental risks.
The expectation is that the underlying project when complete will produce a debt service coverage ratio that is consistent with policy for completed income producing projects. Additionally, at the time of initial analysis, the Bank generally underwrites construction loans at a higher interest rate than current market rates.
The expectation is that the underlying project when complete will produce a debt service coverage ratio that is consistent with the policy for completed income producing projects. Additionally, at the time of initial analysis, the Bank generally underwrites construction loans at a higher interest rate than current market rates.
Adjustments are generally based on a spread between 2.75% and 3.25%. Generally, the maximum interest rate on these loans is 6% above the initial interest rate. Generally, ARM loans pose credit risks different than the risks inherent in fixed-rate loans, primarily because as interest rates rise, the payments of the borrower rise, thereby increasing the potential for delinquency and default.
Adjustments are generally based on a spread between 2.75% and 3.25%. Generally, the maximum interest rate on these loans is 6% above the initial interest rate. ARM loans may pose credit risks different than the risks inherent in fixed-rate loans, primarily because as interest rates rise, the payments of the borrower rise, thereby increasing the potential for delinquency and default.
The asset-backed securities portfolio provides attractive yields and diversification of risk and is largely comprised of senior classes of collateralized loan obligations that invest in U.S. based broadly syndicated and middle market loans. The corporate debt securities portfolio is comprised of U.S. financial services and industrial companies that exhibit strong credit characteristics and provide attractive returns.
The asset-backed securities portfolio provides attractive yields and diversification of risk and is largely comprised of senior classes of collateralized loan obligations that invest in U.S.-based syndicated and middle market loans. The corporate debt securities portfolio is comprised of U.S. financial services and industrial companies that exhibit strong credit characteristics and provide attractive returns.
The Bank may commit to provide permanent mortgage financing on its construction loans on income-producing property. Risk of loss on a construction loan depends largely upon whether the initial estimate of the property's value at completion of construction equals or exceeds the cost of the property construction (including interest).
The Bank may commit to provide permanent mortgage financing on its construction loans on income-producing properties. Risk of loss on a construction loan depends largely upon whether the initial estimate of the property's value at completion of construction equals or exceeds the cost of the property construction (including interest).
Additionally, the Bank offers an interest rate swap program that allows commercial loan customers to effectively convert an adjustable-rate commercial loan agreement to a fixed-rate commercial loan agreement. The Bank simultaneously sells an offsetting back-to-back swap to an investment-grade national bank so that it does not retain this fixed-rate risk.
Additionally, the Bank offers an interest rate swap program that allows commercial loan customers to effectively convert an adjustable-rate commercial loan agreement to a fixed-rate commercial loan agreement. The Bank simultaneously sells an offsetting swap to an investment-grade national bank so that it does not retain this fixed-rate risk.
Home equity loans and lines of credit are originated based on the applicant’s income and their ability to repay and are secured by a mortgage on the underlying real estate, typically owner-occupied, one-to-four family residences.
Home equity loans and lines of credit were originated based on the applicant’s income and their ability to repay and are secured by a mortgage on the underlying real estate, typically owner-occupied, one-to-four-family residences.
This regulation and supervision establishes a comprehensive 19 framework of activities in which an institution can engage and is intended primarily for the protection of the DIF and depositors and to ensure the safe and sound operation of the Bank.
This regulation and supervision establishes a comprehensive framework of activities in which an institution can engage and is intended primarily for the protection of the DIF and depositors and to ensure the safe and sound operation of the Bank.
In 20 addition, the EGRRCPA limited the definition of loans that would be subject to the higher risk weighting applicable to high volatility commercial real estate. Volcker Rule .
In addition, the EGRRCPA limited the definition of loans that would be subject to the higher risk weighting applicable to high volatility commercial real estate. Volcker Rule .
These regulatory policies may affect the ability of the BHC to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions. 21 Acquisition of the Company .
These regulatory policies may affect the ability of the BHC to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions. Acquisition of the Company .
In addition, under the FRB's merchant banking regulations, a financial holding company is authorized to invest in companies that engage in activities that are not financial in nature, as long as the financial holding company makes its investment with the intention of limiting the duration of the investment, does not manage the company on a day-to-day basis, and the company does not cross-market its products or services with any of the financial holding company's controlled depository institutions.
In addition, under the FRB, merchant banking regulations, a financial holding company is authorized to invest in companies that engage in activities that are not financial in nature, as long as the financial holding company makes its investment with the intention of limiting the duration of the investment, does not manage the company on a day-to-day basis, and the company does not cross-market its products or services with any of the financial holding company's controlled depository institutions.
Critically undercapitalized institutions are subject to the appointment of a receiver or conservator. The OCC may also take any one of a number of discretionary supervisory actions against undercapitalized institutions, including the issuance of a capital directive. Based on the regulatory guidelines, the Bank satisfies the criteria to be well-capitalized at December 31, 2024. Insurance of Deposit Accounts .
Critically undercapitalized institutions are subject to the appointment of a receiver or conservator. The OCC may also take any one of a number of discretionary supervisory actions against undercapitalized institutions, including the issuance of a capital directive. Based on the regulatory guidelines, the Bank satisfies the criteria to be well-capitalized at December 31, 2025. Insurance of Deposit Accounts .
According to the federal banking agencies, applicable considerations include: quality of the bank’s interest rate risk management process; the overall financial condition of the bank; and the level of other risks at the bank for which capital is needed. At December 31, 2024, the Bank exceeded all regulatory capital requirements currently applicable .
According to the federal banking agencies, applicable considerations include: quality of the bank’s interest rate risk management process; the overall financial condition of the bank; and the level of other risks at the bank for which capital is needed. At December 31, 2025, the Bank exceeded all regulatory capital requirements currently applicable .
The economy in the Bank’s primary market area, which represents central and southern New Jersey, is based on a mixture of service and retail trade, with other empl oyment provided by a variety of wholesale trade, manufacturing, federal, state and local government, hospitals and utilities.
The economy in the Bank’s primary market area, which represents central and southern New Jersey, is driven on a mixture of service and retail trade, with other empl oyment provided by a variety of wholesale trade, manufacturing, federal, state and local government, hospitals and utilities.
The majority of the Bank’s construction loans are floating-rate loans with a maximum 75% loan-to-value ratio for the completed project and a minimum debt-service coverage of 1.0x during the construction period to ensure there is sufficient interest reserve to cover interest payments.
The majority of the Bank’s construction loans are adjustable-rate loans with a maximum 75% loan-to-value ratio for the completed project and a minimum debt-service coverage of 1.0x during the construction period to ensure there is a sufficient reserve to cover interest payments.
The independent firms reviewed over 60% of the outstanding loan balances for the Bank’s commercial real estate and commercial and industrial loans during 2024. Their conclusion was that the Bank’s internal credit reviews are consistent with both Bank policy and general industry practice. Loan Servicing .
The independent firms reviewed over 60% of the outstanding loan balances for the Bank’s commercial real estate and commercial and industrial loans during 2025. Their conclusion was that the Bank’s internal credit reviews are consistent with both Bank policy and general industry practice. Loan Servicing .
Residential mortgage loans originated by the Bank include due-on-sale clauses which provide the Bank with the contractual right to declare the loan immediately due and payable in the event the borrower transfers ownership of the property without the Bank’s consent.
Residential mortgage loans that were originated by the Bank include due-on-sale clauses which provide the Bank with the contractual right to declare the loan immediately due and payable in the event the borrower transfers ownership of the property without the Bank’s consent.
Subsidiary Activities At December 31, 2024, the Bank owned all or a majority interest in five direct subsidiaries: • OceanFirst REIT Holdings, Inc., a Delaware corporation, was established in 2007 as a wholly-owned subsidiary of the Bank and now acts as the holding company for OceanFirst Management Corp, a New York corporation, which was organized in 2016 to hold and manage investment securities, including the stock of OceanFirst Realty Corp.
At December 31, 2025, the Bank owned all or a majority interest in five direct subsidiaries: • OceanFirst REIT Holdings, Inc., a Delaware corporation, was established in 2007 as a wholly-owned subsidiary of the Bank and now acts as the holding company for OceanFirst Management Corp, a New York corporation, which was organized in 2016 to hold and manage investment securities, including the stock of OceanFirst Realty Corp.
Loan originations are typically generated by the Bank’s commissioned loan representatives and are largely derived from contacts within the local real estate industry, members of the local communities, the Bank’s existing or past customers, and targeted advertising through digital channels.
Loan originations were typically generated by the Bank’s commissioned loan representatives and were largely derived from contacts within the local real estate industry, members of the local communities, the Bank’s existing or past customers, and targeted advertising through digital channels.
The underwriting standards and procedures that are used to underwrite investor owned commercial real estate loans are used to underwrite multi-family loans, except the loan-to-value ratio generally do not exceed 75% of the appraised value of the property, the debt-service coverage is generally a minimum of 1.20x and an amortization period of up to 30 years may be used.
The same underwriting standards and procedures that are used to underwrite investor owned commercial real estate loans are used to underwrite multi-family loans, except the loan-to-value ratio generally does not exceed 75% of the appraised value of the property, the debt-service coverage is generally a minimum of 1.20x and an amortization period of up to 30 years may be used.
The Bank generally requires minimum debt service coverage of 1.20x to 1.50x for investor owned real estate, depending on the asset class. There is a potential risk that the borrower may be unable to pay off or refinance the outstanding balance at the loan maturity date.
The Bank generally requires a minimum debt service coverage of 1.20x to 1.40x 10 for investor owned real estate, depending on the asset class. There is a potential risk that the borrower may be unable to pay off or refinance the outstanding balance at the loan maturity date.
For the year ended December 31, 2024 and 2023, the Bank’s revenues from interchange fees were $5.1 million and $5.0 million, respectively. The 2024 and 2023 average net interchange fee per transaction were both $0.14. Economic Growth, Regulatory Relief and Consumer Protection Act . EGRRCPA was intended to provide regulatory relief to midsized and regional banks.
For the year ended December 31, 2025 and 2024, the Bank’s revenues from interchange fees were $5.2 million and $5.1 million, respectively. The 2025 and 2024 average net interchange fee per transaction were both $0.14. Economic Growth, Regulatory Relief and Consumer Protection Act . EGRRCPA was intended to provide regulatory relief to midsized and regional banks.
Holding Company Consolidated Capital Requirements . The Dodd-Frank Act requires capital rules and the application of the same leverage and risk-based capital requirements that apply to insured depository institutions to most bank holding companies.
The Dodd-Frank Act requires capital rules and the application of the same leverage and risk-based capital requirements that apply to insured depository institutions to most bank holding companies.
The Ability-To-Repay/Qualified Mortgage Rule defines several categories of “qualified mortgage” loans, which obtain certain protections from liability. For further discussion, refer to Risk Factors – Risks Related to Lending Activities – The Dodd-Frank Act imposes obligations on originators of residential mortgage loans .
The Ability-To-Repay/Qualified Mortgage Rule defines several categories of “qualified mortgage” loans, which obtain certain protections from liability. For further discussion, refer to ‘Risk Factors – Risks Related to Lending Activities – The Dodd-Frank Act imposes obligations on originators of residential mortgage loans’.
The Company’s employees, known as the WaveMakers when helping in the community, collectively spend thousands of hours volunteering and serving in leadership roles with local nonprofit organizations, along with participating in other activities that contribute to improving the quality of life for others.
The Company ’s employees, known as the WaveMakers when helping in the community, collectively spend thousands of hours volunteering and serving in leadership roles with local nonprofit organizations, along with participating in other activities that contribute to improving the quality of life for others.
The Bank generally underwrites investor owned commercial real estate loans to a maximum of 65% to 80% advance, depending on the asset class, against either the appraised value of the property or its purchase price (for loans to fund the acquisition of real estate), whichever is less.
The Bank generally underwrites investor owned commercial real estate loans to a maximum of a 65% to 80% loan-to-value ratio, depending on the asset class, against either the appraised value of the property or its purchase price (for loans to fund the acquisition of real estate), whichever is less.
Generally, for owner occupied commercial real estate loans in excess of $750,000, the Bank requires environmental professionals to inspect the property and ascertain any potential environmental risks. In accordance with regulatory guidelines, the Bank requires a full independent appraisal for commercial real estate properties for loans in excess of $500,000.
For commercial and industrial – real estate loans in excess of $750,000, the Bank generally requires environmental professionals to inspect the property and ascertain any potential environmental risks. In accordance with regulatory guidelines, the Bank requires a full independent appraisal for commercial real estate properties for loans in excess of $500,000.
While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment activity are greatly influenced by changes in market interest rates, competition, general economic conditions, including levels of unemployment and real estate values, and inflation. The Company’s website address is www.oceanfirst.com .
While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment activity are greatly influenced by changes in market interest rates, competition, general economic conditions, including levels of tariffs and any retaliatory responses, unemployment and real estate values, and inflation. The Company’s website address is www.oceanfirst.com .
The Bank also faces competition for deposits from short-term money market funds, other corporate and government securities funds, internet-only providers, and from other financial service institutions such as brokerage firms and insurance companies. The Bank distinguishes itself from large bank competitors with teams of local financial experts in each market providing personalized accounts, extraordinary customer service and local decision-making.
The Bank also faces competition for deposits from short-term money market funds, other corporate and government securities funds, financial technology companies, and from other financial service institutions such as brokerage firms and insurance companies. The Bank distinguishes itself from large bank competitors with teams of local financial experts in each market providing personalized accounts, extraordinary customer service and local decision-making.
The FDIC’s regulations define the five categories as follows: An institution is classified as well capitalized if: • it has a leverage ratio of 5% or greater; and • it has common equity Tier 1 ratio of 6.5% or greater; and • it has a Tier 1 risk-based capital ratio of 8% or greater; and • it has a total risk-based capital ratio of 10% or greater; and • it is not subject to any written agreement, order or capital directive, or prompt corrective action directive issued by the OCC to meet and maintain a specific capital level for any capital measure. 23 An institution is classified as adequately capitalized if: • it has a leverage ratio of less than 4%; and • it has a common equity Tier 1 ratio of 4.5% or greater; and • it has a Tier 1 risk-based capital ratio of 6%; and • it has a total risk-based capital ratio of 8% or greater.
The FDIC’s regulations define the five categories as follows: An institution is classified as well capitalized if: • it has a leverage ratio of 5% or greater; and • it has common equity Tier 1 ratio of 6.5% or greater; and • it has a Tier 1 risk-based capital ratio of 8% or greater; and • it has a total risk-based capital ratio of 10% or greater; and • it is not subject to any written agreement, order or capital directive, or prompt corrective action directive issued by the OCC to meet and maintain a specific capital level for any capital measure.
The Board has delegated authority to implement the investment policy to the Company and Bank’s Investment Committees under the oversight of the Asset Liability Committee. Day-to-day management of the portfolio rests with the Treasurer. Classification of securities are determined by management at the time of purchase.
The Board has delegated authority to implement the investment policy to the Company and Bank’s Investment Committees under the oversight of the Asset Liability Committee, which are both management-level committees. Day-to-day management of the portfolio rests with the Treasurer. Classification of securities are determined by management at the time of purchase.
A description of the methodology used in establishing the ACL is set forth in the section Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Policies and Estimates, Allowance for Credit Losses . At December 31, 2024 and 2023, the Bank’s loan ACL as a percentage of total loans was 0.73% and 0.66%, respectively.
A description of the methodology used in establishing the ACL is set forth in the section Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Policies and Estimates, Allowance for Credit Losses . At December 31, 2025 and 2024, the Bank’s loan ACL as a percentage of total loans was 0.76% and 0.73%, respectively.
Human Capital OceanFirst’s long-term growth and success depends on its ability to attract, develop and retain a high-performing workforce. The Company strives to provide a work environment that promotes collaboration, productivity, and employee engagement, which in turn drives both employee and customer success, as well as benefits the communities.
Human Capital The Company’s long-term growth and success depends on its ability to attract, develop and retain a high-performing workforce. The Company strives to provide a work environment that promotes collaboration, accountability, and employee engagement, which in turn drives both employee and customer success, as well as benefits the communities.
The Company is registered with the FRB and is required by Federal law to file reports with, and comply with the rules and regulations of the FRB. The Bank is a member of the FHLB System and, with respect to deposit insurance, of the Deposit Insurance Fund (“DIF”) managed by the FDIC.
The Company is registered with the FRB and is required by Federal law to file reports with, and comply with the rules and regulations of the FRB. The Bank is a member of the FHLB System and, with respect to deposit insurance, of the DIF managed by the FDIC.
An institution is classified as undercapitalized if: • it has a leverage ratio of less than 4%; or • it has a common equity Tier 1 ratio of less than 4.5%; or • it has a Tier 1 risk-based capital ratio of less than 6%; or • it has a total risk-based capital ratio of less than 8%.
An institution is classified as undercapitalized if: • it has a leverage ratio of less than 4%; or • it has a common equity Tier 1 ratio of less than 4.5%; or • it has a Tier 1 risk-based capital ratio of less than 6%; or • it has a total risk-based capital ratio of less than 8%. 27 An institution is classified as significantly undercapitalized if: • it has a leverage ratio of less than 3%; or • it has a common equity Tier 1 ratio of less than 3%; or • it has a Tier 1 risk-based capital ratio of less than 4%; or • it has a total risk-based capital ratio of less than 6%.
At December 31, 2024, the Bank primarily operated its business through its headquarters located in Toms River, New Jersey, its administrative office located in Red Bank, New Jersey and 39 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia.
At December 31, 2025, the Bank primarily operated its business through its headquarters located in Toms River, New Jersey, its administrative office located in Red Bank, New Jersey and 41 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia.
(2) Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, were $6.0 million, $7.5 million, and $11.4 million at December 31, 2024, 2023, and 2022, respectively.
(4) Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, were $4.0 million, $6.0 million, and $7.5 million at December 31, 2025, 2024, and 2023, respectively.
The states of New Jersey, New York City, Philadelphia, Pittsburgh, Baltimore, Boston, Virginia and Washington D.C. are also attractive markets to many financial institu tions. Many of the Bank’s competitors are significantly larger institutions that have greater financial resources than the Bank.
The states of New Jersey and Virginia and the metropolitan areas of New York City, Philadelphia, Pittsburgh, Baltimore, Boston and Washington D.C. are also attractive markets to many financial institu tions. Many of the Bank ’s competitors are significantly larger institutions that have greater financial resources than the Bank .
As of December 31, 2024, these back-to-back swaps had a notional amount of $1.47 billion. The investor owned commercial real estate portfolio also includes loans for the construction of commercial properties. The Bank generally underwrites construction loans for a term of three years or less.
As of December 31, 2025, these back-to-back swaps had a notional amount of $1.54 billion. The investor owned commercial real estate portfolio also includes loans for the construction of commercial properties. The Bank generally underwrites construction loans for a term of three years or less.
The Bank’s policy is to originate residential real estate loans in amounts up to 80% of the lower of the appraised value or the selling price of the property securing the loan, up to 95% of the appraised value or selling price if private mortgage insurance is obtained, and up to 97% of the lower of the appraised value or selling price if the borrower qualifies for the NeighborFirst or special purpose credit program available to certain census tracts.
The Bank’s policy was to originate residential real estate loans in amounts up to 80% of the lower of the appraised value or the selling price of the property securing the loan, up to 95% of the appraised value or selling price if private mortgage insurance is obtained, and up to 97% of the lower of the appraised value or selling price if the borrower qualified for the NeighborFirst, Helping Home Loan, or special purpose credit program available to certain census tracts.
At December 31, 2024, the Bank had outstanding municipal letters of credit of $1.45 billion issued by the FHLB used to secure such government deposits. The Company also pledged $1.07 billion of securities with the FHLB and the FRB to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law.
At December 31, 2025, the Bank had outstanding municipal letters of credit of $1.13 billion issued by the FHLB used to secure such government deposits. The Company also pledged $1.45 billion of securities with the 20 FHLB and the FRB to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law.
Each of the U.S. government, agency, and agency guaranteed obligations are rated AA+ by Standard and Poor’s and Aaa by Moody’s.
Each of the U.S. government, agency, and agency guaranteed obligations are rated AA+ by Standard and Poor’s and Aa1 by Moody’s.
At December 31, 2024, the Bank’s total assets were $13.42 billion and, therefore, the Bank is subject to CFPB supervision and examination for compliance with specified Federal consumer protection laws. Additionally, the Dodd-Frank Act includes a series of provisions covering mortgage loan origination standards affecting, among other things, originator compensation, minimum repayment standards and prepayments.
At December 31, 2025, the Bank’s total assets were $14.56 billion and, therefore, the Bank is subject to CFPB supervision and examination for compliance with specified Federal consumer protection laws. Additionally, the Dodd-Frank Act includes a series of provisions covering mortgage loan origination standards affecting, among other things, originator compensation, minimum repayment standards and prepayments.
The Bank generally requires minimum debt service coverage of 1.25x to 1.40x for owner occupied real estate, depending on the property type. There is a potential risk that the borrower may be unable to pay off or refinance the outstanding balance at the loan maturity date.
The Bank generally requires a minimum debt service coverage of 1.25x to 1.40x for commercial and industrial – real estate, depending on the property type. There is a potential risk that the borrower may be unable to pay off or refinance the outstanding balance at the loan maturity date.
These loans have periodic and overall caps on the increase or decrease at any adjustment date and over the life of the loan. These loans are indexed to an applicable Secured Overnight Financing Rate (“SOFR”) rate or U.S Treasury plus a spread. The majority of the ARM portfolio is tied to the one-year U.S. Treasury bill.
These loans have periodic and overall caps on the increase or decrease at any adjustment date and over the life of the loan. These loans are indexed to an applicable SOFR rate or U.S Treasury plus a spread. The majority of the ARM portfolio is tied to the one-year U.S. Treasury bill.
Seven- to ten-year ARM loans must qualify based on the note rate. The Bank does not originate ARM loans that can result in negative amortization. The Bank’s fixed-rate mortgage loans are currently made for terms from ten to 30 years.
Seven- to ten-year ARM loans must qualify based on the note rate. The Bank does not originate ARM loans that can result in negative amortization. The Bank’s fixed-rate mortgage loans were generally made for terms from ten to 30 years.
Appraisals are obtained for loans secured by real estate properties. The weighted average loan-to-value ratio of the Bank’s residential real estate loans, excluding loan purchase pools, was 59% at December 31, 2024 based on appraisal values at the time of origination. Title insurance is typically required for first mortgage loans.
Appraisals are obtained for loans 13 secured by real estate properties. The weighted average loan-to-value ratio of the Bank’s residential real estate loans, excluding loan purchase pools, was 62% at December 31, 2025 based on appraisal values at the time of origination. Title insurance is typically required for first mortgage loans.
As of December 31, 2024, the Company pledged $7.43 billion of loans with the FHLB and the FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a municipal letter of credit to collateralize certain government municipal deposits.
As of December 31, 2025, the Company pledged $7.92 billion of loans with the FHLB and the FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a municipal letter of credit to collateralize certain government municipal deposits.
If any subsidiary bank of a financial holding company receives a rating under the Community Reinvestment Act (“CRA”) of less than “satisfactory,” then the financial holding company is prohibited from engaging in new activities or acquiring companies other than BHCs, banks, or savings associations until the rating is raised to “satisfactory” or better.
If any subsidiary bank of a financial holding company receives a rating under the CRA of less than “satisfactory,” then the financial holding company is prohibited from engaging in new activities or acquiring companies other than BHCs, banks, or savings associations until the rating is raised to “satisfactory” or better.
In accordance with regulatory guidelines, 7 the Bank requires a full independent appraisal for commercial real estate properties for loans in excess of $500,000. The appraiser must be selected from the Bank’s approved appraiser list. The Bank generally uses an independent third party to review all applicable property appraisals to ensure compliance with regulations.
In accordance with regulatory guidelines, the Bank requires a full independent appraisal for commercial real estate properties for loans in excess of $500,000. The appraiser must be selected from the Bank’s approved appraiser list. The Bank generally uses an independent third party to review all applicable property appraisals to ensure compliance with regulations. The Bank also originates multi-family mortgage loans.
The Bank’s PCD loans relate to loans acquired from acquisitions . PCD loans are accounted for at the purchase price or acquisition date fair value, with an estimate of expected credit losse s for groups of PCD loans with similar risk characteristics and individual PCD loans without similar characteristics, to arrive at an initial amortized cost basis.
PCD loans are accounted for at the purchase price or acquisition date fair value, with an estimate of expected credit losse s for groups of PCD loans with similar risk characteristics and individual PCD loans without similar characteristics, to arrive at an initial amortized cost basis.
Community Involvement The Bank promotes efforts to enhance the quality of life in the communities it serves through employee volunteer efforts and the work of OceanFirst Foundation (the “Foundation”). Employees are encouraged to help their neighbors in many ways and receive up to eight hours of Bank-paid volunteer time each year.
Community Involvement The Bank promotes efforts to enhance the quality of life in the communities it serves through employee volunteer efforts and the work of the Foundation . Employees are encouraged to help their communities and receive up to eight hours of Bank-paid volunteer time each year.
Furthermore, the Company holds the following statutory business trusts: OceanFirst Capital Trust I, OceanFirst Capital Trust II, OceanFirst Capital Trust III, Sun Statutory Trust VII, Sun Capital Trust VII, Sun Capital Trust VIII, and Country Bank Statutory Trust I, collectively known as the “Trusts”. All of the Trusts are incorporated in Delaware and were formed to issue trust preferred securities.
Lastly, the Company holds the following statutory business trusts: OceanFirst Capital Trust I, OceanFirst Capital Trust II, OceanFirst Capital Trust III, Sun Statutory Trust VII, Sun Capital Trust VII, Sun Capital Trust VIII, and Country Bank Statutory Trust I, collectively known as the “Trusts.” All of the Trusts are incorporated in Delaware and were formed to issue trust preferred securities.
The Bank originates residential construction loans primarily on a construction to permanent basis with such loans converting to an amortizing loan following the completion of the construction phase. All of the Bank’s residential construction loans are made to individuals building a residence.
The Bank originated residential construction loans primarily on a construction to permanent basis with such loans converting to an amortizing loan following the completion of the construction phase. All of the Bank’s residential construction loans were made to individuals building a residence.
The Foundation, established in 1996 during the Company’s initial public offering, has granted over $49.6 million to enrich the lives of local citizens by supporting initiatives in health and human services, education, affordab le housing, youth development, and the arts. 4 Lending Activities Loan Portfolio Composition .
The Foundation, established in 1996 during the Company’s initial public offering, has granted over $51.1 million to enrich the lives of local citizens by supporting initiatives in health and human services, education, affordab le housing, youth development, and the arts. 7 Lending Activities Loan Portfolio Composition .
The following table shows the contractual maturity of the Bank’s total loans at December 31, 2024.
The following table shows the contractual maturity of the Bank’s total loans at December 31, 2025.
Investor owned commercial real estate loans are among the largest of the Bank’s loans and may have higher credit risk and lending spreads.
Investor owned commercial real estate loans are among the largest of the Bank ’s loans and may have higher credit risk and lending spreads.
Under the Agreements, the Bank has committed to invest at least $14 million in a mortgage loan subsidy fund for eligible residents in Middlesex and Monmouth counties over a five-year period.
Under the Agreements, the Bank has committed to invest at least $14 million in a mortgage loan subsidy fund for eligible residents over a five-year period.
The management of the Bank does not know of any practice, condition, or violation that might lead to termination of deposit insurance. 24 The total deposit insurance assessment expenses incurred in 2024 and 2023 were $9.7 million and $9.9 million, respectively.
The management of the Bank does not know of any practice, condition, or violation that might lead to termination of deposit insurance. The total deposit insurance assessment expenses incurred in 2025 and 2024 were $10.5 million and $9.7 million, respectively.
The final rule was scheduled to take effect on April 1, 2024 and the applicability date for the majority of the provisions in the CRA regulations was January 1, 2026 with additional requirements applicable on January 1, 2027. However, the final rule is subject to legal challenges that have pushed back the implementation date and compliance deadlines.
The final rule was scheduled to take effect on April 1, 2024 and the applicability date for the majority of the provisions in the CRA regulations was January 1, 2026 with additional requirements applicable on January 1, 2027, but ongoing legal challenges have pushed back the implementation date and compliance deadlines.
Item 1. Business General OceanFirst Financial Corp. (the “Company”) is incorporated under Delaware law and serves as the holding company for OceanFirst Bank N.A. (the “Bank”). At December 31, 2024, the Company had consolidated total assets of $13.4 billion and total stockholders’ equity of $1.7 billion.
Item 1. Business General OceanFirst Financial Corp. (the “Company”) is incorporated under Delaware law and serves as the holding company for OceanFirst Bank N.A (the “Bank”). At December 31, 2025, the Company had consolidated total assets of $14.6 billion and total stockholders’ equity of $1.7 billion.
See Risk Factors – Risks Related to Lending Activities – The Dodd-Frank Act imposes obligations on originators of residential mortgage loans . Included in the Bank’s residential real estate loan balance at December 31, 2024, were residential construction loans which totaled $93.6 million.
See Risk Factors – Risks Related to Lending Activities – The Dodd-Frank Act imposes obligations on originators of residential mortgage loans . Included in the Bank’s residential real estate loan balance at December 31, 2025, were residential construction loans which totaled $80.5 million.
For additional information, refer to Regulation of Bank Subsidiary – Community Reinvestment Act and Fair Lending Law. Regulation of Bank Subsidiary Business Activities .
For additional information, refer to ‘Regulation of Bank Subsidiary – Community Reinvestment Act and Fair Lending Law’. Regulation of Bank Subsidiary Business Activities .
Residential Real Estate . The Bank offers both fixed-rate and adjustable-rate mortgage (“ARM”) loans secured by one-to-four family residences with maturities up to 30 years. The majority of such loans are secured by property located in the Bank’s primary market area.
Residential Real Estate The Bank offered both fixed-rate and ARM loans secured by one-to-four family residences with maturities up to 30 years. The majority of such loans are secured by property located in the Bank’s primary market area.
In addition, rapid technological changes and consumer preferences will continue to result in increased competition for the Bank’s digital services as a number of well-funded technology-focused companies are innovating in the payments, distributed ledger, and cryptocurrency networks to disintermediate portions of the traditional banking model.
In addition, rapid technological changes and consumer preferences will continue to result in increased competition for the Bank’s digital services as several well-funded technology-focused companies are focused on developing innovations in payments, distributed ledger, and cryptocurrency networks to disintermediate portions of the traditional banking model.
If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed. The Bank addresses these risks through its underwriting policies and procedures and its experienced staff. Home Equity Loans and Lines, Student Loans and Other Consumer .
If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed. The Bank addresses these risks through its underwriting policies and procedures and its experienced staff.
See Note 4 Securities, to the Consolidated Financial Statements. 15 The ta ble below sets forth certain information regarding the amortized cost, weighted average yield, and contractual maturities, excluding scheduled principal amortization, of the Bank’s debt securities as of December 31, 2024.
See Note 4 Securities to the Consolidated Financial Statements. 18 The ta ble below sets forth certain information regarding the amortized cost, weighted average yield, and contractual maturities, excluding scheduled principal amortization, of the Bank ’s debt securities as of December 31, 2025.
Foreclosure timelines in New Jersey are among the longest in the nation and have remained protracted over the past several years. The Bank classifies assets in accordance with its Classification of Assets and Allowance for Credit Losses Policy (the “ACL Policy”), which considers certain regulatory guidelines and definitions.
Foreclosure timelines in New Jersey are among the longest in the nation and have remained protracted over the past several years. The Bank classifies assets in accordance with its Classification of Assets and the ACL policy, which considers certain regulatory guidelines and definitions.
New York City office CBD loans represented $7 million, or 0.05% of the Company’s total assets at December 31, 2024. (5) New York City rent-regulated multi-family loans, where the property has more than 50% of its units rent-regulated, represented $31 million, or 0.23% of the Company’s total assets at December 31, 2024.
New York City office CBD loans represented $7 million, or 0.05% of the Company’s total assets at December 31, 2025. (4) New York City rent-regulated multi-family loans, where the property has more than 50% of its units rent-regulated, represented $28 million, or 0.19% of the Company’s total assets at December 31, 2025.
At December 31, 2024, the Bank’s total investor owned commercial real estate loans outstanding were $5.29 billion, or 52.2% of total loans, as compared to $5.35 billion, or 52.5% of total loans at December 31, 2023.
At December 31, 2025, the Bank’s total investor owned commercial real estate loans outstanding were $5.42 billion, or 49.1% of total loans, as compared to $5.29 billion, or 52.2% of total loans at December 31, 2024.
The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, and Boston. One of the largest and oldest financial institutions in New Jersey, the Bank’s headquarters are approximately midway between New York City and Philadelphia.
The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, Boston and Northern Virginia. One of the largest and oldest financial institutions in New Jersey, the Bank ’s headquarters are centrally located between New York City and Philadelphia.
The net unamortized credit and PCD marks on all acquired loans, not reflected in the allowance, was $6.0 million and $7.5 million at December 31, 2024 and 2023, respectively. The loan ACL as a percentage of total non-performing loans was 207.19% and 227.21% at December 31, 2024 and 2023, respectively.
The net unamortized credit and PCD marks on all acquired loans, not reflected in the allowance, was $4.0 million and $6.0 million at December 31, 2025 and 2024, respectively. The loan ACL as a percentage of total non-performing loans was 301.27% and 207.19% at December 31, 2025 and 2024, respectively.
The Bank cannot predict what assessment rates will be in the future. The FDIC may terminate the insurance of an institution’s deposits upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC.
The FDIC may terminate the insurance of an institution’s deposits upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC.
The Bank’s competition for loans comes principally from commercial banks, savings banks, savings and loan associations, credit unions, mortgage banking companies, internet-based providers, insurance companies, private lenders, and government sponsored enterprises. Its most direct competition for deposits has historically come from commercial banks, savings banks, savings and loan associations, and credit unions.
The Bank ’s competition for loans comes principally from commercial banks, savings banks, savings and loan associations, credit unions, mortgage banking companies, financial technology companies, insurance companies, private lenders, and government sponsored enterprises. Its most direct competition for deposits has historically come from commercial banks, savings banks, savings and loan associations, and credit unions.
The Bank primarily underwrites owner occupied real estate loans to a maximum of 70% to 80% advance, depending on the property type, against either the appraised value of the property or its purchase price (for loans to fund the acquisition of real estate), whichever is less.
The Bank primarily underwrites commercial and industrial – real estate loans to a maximum of 70% to 80% loan-to-value ratio, depending on the property type, against either the appraised value of the property or its purchase price (for loans to fund the acquisition of real estate), whichever is less.
At December 31, 2024 and 2023, this total included $2.48 billion and $2.31 billion, respectively, of collateralized government deposits, and $1.58 billion and $1.42 billion of intercompany deposits of fully consolidated subsidiaries. Estimated adjusted uninsured deposits excluding these balances represented $1.69 billion and $1.60 billion, or 16.5% and 15.2% of total deposits, as of December 31, 2024 and 2023, respectively.
At December 31, 2025 and 2024, this total included $2.71 billion and $2.48 billion, respectively, of collateralized government deposits, and $1.90 billion and $1.58 billion of intercompany deposits of fully consolidated subsidiaries. Estimated adjusted uninsured deposits excluding these balances represented $1.85 billion and $1.69 billion, or 16.8% and 16.5% of total deposits, as of December 31, 2025 and 2024, respectively.
On September 18, 2024, the Bank voluntarily entered into settlement agreements with the United States Department of Justice (the “DOJ”) and United States Department of Housing and Urban Development to resolve claims that the Bank violated the Equal Credit Opportunity Act and Fair Housing Act in the New Brunswick-Lakewood, New Jersey lending area, which includes Middlesex, Monmouth and Ocean counties.
On September 18, 2024, the Bank voluntarily entered into settlement agreements with the DOJ and HUD to resolve claims that the Bank violated the Equal Credit Opportunity Act and Fair Housing Act in the New Brunswick-Lakewood, New Jersey lending area, which includes Middlesex, Monmouth and Ocean counties.
The Bank believes this portfolio is highly diversified with loans secured by a variety of property types and the portfolio exhibits stable credit quality.
The Bank believes this portfolio is highly diversified with loans secured by a variety of property types and the portfolio has historically exhibited stable credit quality. Commercial and Industrial .
To be considered owner occupied, the underlying business must either occupy 51% of the building’s total square footage or pay 51% of the total market rate rental income derived from the property.
To be considered commercial and industrial – real estate, the underlying business must either occupy 51% of the building’s total square footage or pay 51% of the total market rate rental income derived from the property.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA deterioration in economic conditions, especially local conditions, continued inflation, recession or otherwise, could have the following consequences, any of which could have a material adverse effect on the business, financial condition, liquidity and results of operations, and could more negatively affect the Company compared to a financial institution that operates with more geographic diversity: • demand for the products and services may decline; • the allowance for credit losses may increase; • loan delinquencies, problem assets, and foreclosures may increase; • collateral for loans, especially real estate, may decline in value, thereby reducing customers’ borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments. 28 Moreover, a significant decline in general economic conditions caused by inflation, tariffs, recession, acts of terrorism, civil unrest, an outbreak of hostilities or other internati onal or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond the Company’s control could further impact these local economic conditions and could further negatively affect the financial results of banking operations.
Biggest changeA deterioration in economic conditions, especially local conditions, continued inflation, tariff wars, increased unemployment, recession or otherwise, could have the following consequences, any of which could have a material adverse effect on the business, financial condition, liquidity and results of operations, and could more negatively affect the Company: • demand for the products and services may decline; • the allowance for credit losses may increase; • loan delinquencies, problem assets, and foreclosures may increase; • Low cost or non-interest-bearing deposits may decrease; • Inflation may accelerate, which may increase operating costs and also may increase real estate costs and lower customer buying power, thereby reducing loan demand; • The value of securities portfolio may decrease; • collateral for loans, especially real estate, may decline in value, thereby reducing customers’ borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments.
The Company also receives funds from loan repayments, investment maturities and income on other interest-earning assets. While the Company 37 emphasizes the generation of low-cost deposits as a source of funding, there is strong competition for such deposits in the Company’s market area. Additionally, deposit balances can decrease if customers identify alternative investments opportunities.
The Company also receives funds from loan repayments, investment maturities and income on other interest-earning assets. While the Company emphasizes the generation of low-cost deposits as a source of funding, there is strong competition for such deposits in the Company’s market area. Additionally, deposit balances can decrease if customers identify alternative investments opportunities.
Many of these competitors enjoy advantages not available to the Company, including greater 33 financial resources and access to capital, stronger regulatory ratios and higher lending limits, a wider geographic presence, more accessible branch office locations, the ability to offer a wider array of services or more favorable pricing alternatives, as well as lower origination and operating costs.
Many of these competitors enjoy advantages not available to the Company, including greater financial resources and access to capital, stronger regulatory ratios and higher lending limits, a wider geographic presence, more accessible branch office locations, the ability to offer a wider array of services or more favorable pricing alternatives, as well as lower origination and operating costs.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on the Company’s business, financial condition, and results of operations. The Company’s inability to tailor its retail delivery model to respond to consumer preferences may negatively affect earnings .
Failure to successfully manage these risks 44 in the development and implementation of new lines of business or new products or services could have a material adverse effect on the Company’s business, financial condition, and results of operations. The Company’s inability to tailor its retail delivery model to respond to consumer preferences may negatively affect earnings .
The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement, as well as more broadly to hedge variable cash flows associated with its floating rate loans. Offering these products can subject the Company to additional regulatory oversight and cost, as well as additional risk.
The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement, as well as more broadly to hedge variable cash flows associated with its variable-rate loans. Offering these products can subject the Company to additional regulatory oversight and cost, as well as additional risk.
These loans may have delinquency or charge-off levels above recent historical experience, which could adversely affect the Company’s future performance. Further, these types of loans generally have larger balances and involve a greater risk than one-to four-family residential mortgage loans.
These loans may have 36 delinquency or charge-off levels above recent historical experience, which could adversely affect the Company’s future performance. Further, these types of loans generally have larger balances and involve a greater risk than one- to four-family residential mortgage loans.
In making such determination under the Company’s capital management plan, the Board of Directors takes into account various factors including economic conditions, earnings, alternative uses of the Company’s capital, liquidity needs, the financial condition of the Company, applicable state law, tax and regulatory requirements and other factors deemed relevant by the Board of Directors.
In making such determination under the Company’s capital management plan, the Board takes into account various factors including economic conditions, earnings, alternative uses of the Company’s capital, liquidity needs, the financial condition of the Company, applicable state law, tax and regulatory requirements and other factors deemed relevant by the Board.
The longer timelines have been the result of the economic environment, additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
The longer timelines 37 have been the result of the economic environment, additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
Success will also depend on the ability of officers and key employees to continue to implement and improve operational and other systems, to manage multiple, concurrent customer relationships and to retain, hire, train and manage skilled employees and to build market share in its existing and new market areas.
Success will also depend on the ability of officers and key employees to continue to implement and improve 40 operational and other systems, to manage multiple, concurrent customer relationships and to retain, hire, train and manage skilled employees and to build market share in its existing and new market areas.
These types of loans may expose a lender to greater risk of non-payment and loss 26 than residential real estate loans because repayment of the loans often depends o n the successful operation of the property or the borrower’s business and the income stream of the borrowers.
These types of loans may expose a lender to greater risk of non-payment and loss than residential real estate loans because repayment of the loans often depends o n the successful operation of the property or the borrower’s business and the income stream of the borrowers.
If a loan meets these criteria and is not a “higher 27 priced loan” as defined in FRB regulations, the CFPB rule establishes a safe harbor preventing a consumer from asserting the failure of the originator to establish the consumer’s Ability-To-Repay.
If a loan meets these criteria and is not a “higher priced loan” as defined in FRB regulations, the CFPB rule establishes a safe harbor preventing a consumer from asserting the failure of the originator to establish the consumer’s Ability-To-Repay.
In a period of rising interest rates, the interest income earned on interest-earning assets may not increase as rapidly as the interest paid on interest-bearing liabilities, which would be expected to compress the interest rate spread and have a negative effect on the Company’s profitability.
Conversely, in a period of rising interest rates, the interest income earned on interest-earning assets may not increase as rapidly as the interest paid on interest-bearing liabilities, which would be expected to compress the interest rate spread and have a negative effect on the Company’s profitability.
A key component of the Company’s business strategy is to rely on its reputation for customer service and knowledge of local markets to expand its presence by capturing new business opportunities from existing and prospective customers in the Company’s market area and contiguous areas.
A key component of the Company’s business strategy is to rely on its reputation for customer service and knowledge of local markets to expand its presence by capturing new business opportunities from existing and prospective customers in the Company’s market areas and contiguous areas.
The level of commercial real estate loans may subject the Company to additional regulatory scrutiny. The OCC and the other federal bank regulatory agencies have promulgated joint guidance on sound risk management practices for financial institutions with concentrations in commercial real estate loans.
The level of commercial real estate loans may subject the Company to additional regulatory scrutiny. The OCC and the other federal bank regulatory agencies have promulgated guidance on sound risk management practices for financial institutions with concentrations in commercial real estate loans.
Additionally, global markets may be adversely affected by the emergence of widespread health emergencies or pandemics. 36 Societal responses to climate change could adversely affect the Company’s business and performance, including indirectly through impacts on its customers.
Additionally, global markets may be adversely affected by the emergence of widespread health emergencies or pandemics. Societal responses to climate change could adversely affect the Company’s business and performance, including indirectly through impacts on its customers.
The acquired loans are underwritten at the date of acquisition based on the Company’s credit standards, which can temporarily increase loans classified as special mention and substandard for a period of time until these loans are integrated and conform to the Company’s credit standards.
The acquired loans were underwritten at the date of acquisition based on the Company’s credit standards, which can temporarily increase loans classified as special mention and substandard for a period of time until these loans are integrated and conform to the Company’s credit standards.
Acquiring other banks, businesses, or branches may have an adverse effect on financial results and may involve various other risks commonly associated with acquisitions, including those discussed above, as well as, among other things: • payment of a premium over book and market values of the target company may dilute the book value and earnings per share of the Company in the short and long-term; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality problems of the target company; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits of the acquisition; • potential disruption to the business; • potential diversion of management’s time and attention; • the possible loss of key employees and customers of the target company; and/or • potential changes in banking or tax laws or regulations that may affect the target company.
Acquiring other banks, businesses, or branches may have an adverse effect on financial results and may involve various other risks commonly associated with acquisitions, including those discussed above, as well as, among other things: • payment of a premium over book and/or market values of the target company may dilute the book value and earnings per share of the Company in the short and long-term; • potential exposure to unknown or contingent liabilities of the target company; • exposure to potential asset quality problems of the target company; • inability to realize the expected revenue increases, cost savings, increases in market share, and/or other projected benefits of the acquisition; • potential disruption to the business; • potential diversion of management’s time and attention; • the possible loss of key employees and customers of the target company; and/or • potential changes in banking or tax laws or regulations that may affect the target company.
Failure to comply with these regulations could result in sanctions, including payment of damages and civil money penalties, injunctive relief, and restrictions on mergers and acquisitions activity and expansionary activities.
Failure to comply with these regulations could result in sanctions, including payment of damages and civil money penalties, injunctive relief, and restrictions on mergers and acquisitions activity and other expansionary activities.
While it is management’s belief that policies and procedures with respect to the Bank’s commercial real estate loan portfolio have been implemented consistent with this guidance, bank regulators could require that additional policies and procedures be implemented consistent with their interpretation of the guidance that may result in additional costs or that may result in the curtailment of commercial real estate and multi-family lending that would adversely affect the Company’s loan originations and profitability.
While it is management’s belief that policies and procedures with respect to the Bank’s commercial real estate loan portfolio have been implemented consistent with this guidance, bank regulators could require that additional policies and procedures be implemented that may result in additional costs or that may result in the curtailment of commercial real estate and multi-family lending that would adversely affect the Company’s loan originations and profitability.
Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to 32 support such subsidiary bank.
Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank.
A subsequent sale of a repurchased mortgage loan could be at a significant discount to the unpaid principal balance. The Company maintains a reserve for repurchased loans.
A subsequent sale of a repurchased loan could be at a significant discount to the unpaid principal balance. The Company maintains a reserve for repurchased loans.
A return of recessionary conditions and/or negative developments in the domestic and interna tional credit markets may significantly affect the markets in which the Company does its business, the value of loans, investments, and collateral securing loans and classified assets, reduce the demand for the Company’s products and services, and/or the ongoing operations, costs and profitability.
A return of recessionary conditions and/or negative developments in the domestic and interna tional credit markets may significantly affect the markets in which the Company does its business, the value of loans, investments, and collateral securing loans and classified assets, reduce the demand for the Company’s products and services, and/or the adversely impact ongoing operations, costs and profitability.
Increased competition could reduce the Company’s net income by decreasing the number and size of loans that the Company originates and the interest rates charged on these loans. Competitive factors driven by consumer sentiment or otherwise can also reduce the Company’s ability to generate fee income, such as through overdraft fees.
Increased competition could reduce the Company’s net income by decreasing the number and size of loans that the Company originates and the interest rates charged on these loans. Competitive factors driven by consumer sentiment, regulatory directives or otherwise can also reduce the Company’s ability to generate fee income, such as through overdraft fees.
Information technology systems are critical to the Company’s business, which includes collecting, processing, transmitting and storing significant amounts of confidential information regarding the Company’s customers, employees and its business, operations, plans and business strategies. The Company uses various technology systems to manage customer relationships, deposits and loans, general ledger, securities investments, and other processes.
Information technology systems are critical to the Company ’s business, which includes collecting, processing, transmitting,, and storing significant amounts of confidential information regarding the Company ’s customers, employees and its business, operations, plans, and business strategies. The Company uses various technology systems to manage customer relationships, deposits and loans, general ledger, securities investments, and other processes.
FEDERAL AND STATE TAXATION Federal Taxation General . The Company and the Bank report their income on a calendar year basis using the accrual method of accounting, and are subject to Federal income taxation in the same manner as other corporations with some exceptions, including particularly the Company’s reserve for bad debts.
The Company and the Bank report their income on a calendar year basis using the accrual method of accounting, and are subject to Federal income taxation in the same manner as other corporations with some exceptions, including particularly the Company’s reserve for bad debts.
The allocation and apportionment to these jurisdictions may affect the overall tax rate. Delaware Taxation . As a Delaware holding company not earning income in Delaware, the Company is exempted from Delaware corporate income tax but is required to file an annual report with and pay an annual franchise tax to the State of Delaware. Item 1B.
The allocation and apportionment to these jurisdictions may affect the overall tax rate. Delaware Taxation . As a Delaware holding company not earning income in Delaware, the Company is exempted from Delaware corporate income tax but is required to file an annual report with and pay an annual franchise tax to the State of Delaware.
The Board of Directors of the Company determines if, when and the amount of dividends that may be paid on the common stock.
The Board of the Company determines if, when and the amount of dividends that may be paid on the common stock.
Monetary policies and regulations of the Federal Reserve Board could adversely affect the Company’s business, financial condition, and results of operations . The Company’s earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions.
Monetary policies and regulations of the federal government, including the Federal Reserve Board, could adversely affect the Company’s business, financial condition, and results of operations . The Company’s earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions.
The recent and intended increases in the level of commercial lending (including commercial real estate, multi-family real estate and land loans, and commercial and industrial loans) have required and would likely require the Company to lend to borrowers with limited or no experience.
The recent and intended increases in the level of commercial lending (including commercial real estate, multi-family real estate and land loans, and commercial and industrial loans) have required and would likely require the Company to lend to borrowers with which the Company has limited or no experience.
These provisions, as well as future regulatory or legislative changes applicable to the financial industry, may impact the profitability of the Company’s business activities and may change certain business practices, including the ability to offer new products, obtain financing, generate fee income, attract deposits, make loans and achieve satisfactory interest spreads, and could expose the Company to additional costs, including increased 31 compliance costs.
These provisions, as well as future regulatory or legislative changes or executive orders applicable to the financial industry, may impact the profitability of the Company’s business activities and may change certain business practices, including the ability to offer new products, obtain financing, generate fee income, attract deposits, make loans and achieve satisfactory interest spreads, and could expose the Company to additional costs, including increased compliance and disclosure costs.
The hedging activity varies based on the level and volatility of interest rates and other changing market conditions. Interest rate hedging may fail to protect the Company from loss. Moreover, hedging activities could result in losses if the event against which we hedge does not occur.
The hedging activity varies based on the level and volatility of interest rates and other changing market conditions. Interest rate hedging may fail to protect the Company from loss. Moreover, hedging activities could result in losses if the event against which the Company hedges does not occur.
Loans that were acquired as part of the Company’s acquisitions of other depository institutions were not initially underwritten or originated in accordance with the Company’s credit standards, including environmental matters, and the Company did not have long-standing relationships with many of these borrowers at the time of acquisition.
Loans that were acquired as part of the Company’s acquisitions of other depository institutions were not initially underwritten or originated in accordance with the Company’s credit standards, and the Company did not have long-standing relationships with many of these borrowers at the time of acquisition.
The judicial foreclosure process is protracted, especially in New Jersey, where foreclosure timelines remain among the longest in the nation, which delays the Company’s ability to resolve non-performing loans through the sale of the underlying collateral.
The judicial foreclosure process is protracted, especially in New Jersey, where foreclosure timelines remain among the longest in the nation, which delays the Company ’s ability to resolve non-performing loans through the sale of the underlying collateral.
The Company’s total assets were $13.4 billion at December 31, 2024, thereby making it subject to requirements imposed by the Dodd-Frank Act and its implementing regulations, including examination by the CFPB to assess compliance with federal consumer financial laws, imposition of higher FDIC premiums, reduced debit card interchange fees, and enhanced risk management frameworks, all of which increase operating costs and reduce earnings.
The Company’s total assets were $14.6 billion at December 31, 2025, thereby making it subject to requirements imposed by the Dodd-Frank Act and its implementing regulations, including examination by the CFPB to assess compliance with federal consumer financial laws, imposition of higher FDIC premiums, reduced debit card interchange fees, and enhanced risk management frameworks, all of which increase operating costs and reduce earnings.
The guidance focuses on exposure to commercial real estate loans that are dependent on the cash flows from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment).
The guidance focuses on exposure to commercial real estate loans that are dependent on the cash flows from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or in an abundance of caution).
The Company has also been active in competing for New Jersey governmental and municipal deposits including public school districts, local municipal governments, and cooperative health insurance funds. At December 31, 2024 such deposits accounted for approximately 26% of the Company’s total deposits.
The Company has also been active in competing for New Jersey governmental and municipal deposits including public school districts, local municipal governments, and cooperative health insurance funds. At December 31, 2025 such deposits accounted for approximately 25% of the Company’s total deposits.
Depending on the capitalization status and regulatory treatment of depository institutions, including whether an institution is subject to a supervisory prompt corrective action directive, certain additional regulatory restrictions and prohibitions may apply, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits.
Depending on the capitalization status and regulatory treatment of depository institutions, including whether an institution is subject to a supervisory prompt corrective action directive, certain additional regulatory restrictions and prohibitions may apply, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits. 48 FEDERAL AND STATE TAXATION Federal Taxation General .
A worsening of economic conditions in the Company’s market area could reduce demand for the products and services and/or result in increases in the level of non-performing loans, which could adversely affect the Company’s business, financial condition, and results of operations.
A worsening of economic conditions in the Company ’s market areas could reduce demand for the products and services and/or result in increases in the level of non-performing loans, which could adversely affect the Company’s business, financial condition, and results of operations.
Threats to the Company’s reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity incidents and questionable or fraudulent activities of the Company’s customers.
Threats to the Company’s reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity incidents, errors resulting from the use of artificial intelligence and questionable or fraudulent activities of the Company’s customers.
This competition comes principally from other banks, savings institutions, mortgage bankin g companies and other lenders.
This competition comes principally from other banks, savings institutions, mortgage bankin g companies, credit unions and other lenders.
This legislation included an exception if at least 50% of the shares, by vote or value, are owned 38 or controlled, directly or indirectly, by a state or federally chartered bank, savings bank, or savings and loan association (financial institution) with assets of $15 billion or l ess. As of December 31, 2024 the Company qualified for this exception.
This legislation included an exception if at least 50% of the shares, by vote or value, are owned or controlled, directly or indirectly, by a state or federally chartered bank, savings bank, or savings and loan association (financial institution) with assets of $15 billion or less. As of December 31, 2025 the Company qualified for this exception.
The heavy reliance on information technology systems exposes the Company to operational risks, which include the risk of malfeasance by employees or persons outside the Company, errors relating to transaction processing and technology, systems failures or interruptions, failures to properly implement systems upgrades, breaches of the Company’s internal control systems and compliance requirements, and business continuation and disaster recovery.
The heavy reliance on information technology systems may expose the Company to operational risks, which include the risk of malfeasance by employees or persons outside the Company , errors relating to transaction processing and technology, systems failures or interruptions, failures to properly implement systems upgrades, cyberattacks, breaches of the Company ’s internal control systems and compliance requirements, and business continuation and disaster recovery.
During the year ended December 31, 2024, the Company incurred other comprehensive 29 gains of $4.7 million, net of tax, related to net changes in unrealized holding gains in the available-for-sale investment securities portfolio, which positively impacted stockholders’ equity, as well as book value per common share. The increase occurred even though the securities are not sold.
During the year ended December 31, 2025, the Company incurred other comprehensive gains of $13.3 million, net of tax, related to net changes in unrealized holding gains in the available-for-sale investment securities portfolio, which positively impacted stockholders’ equity, as well as book value per common share. The increase occurred even though the securities are not sold.
Based on these factors, the Bank has a concentration in multi-family and commercial real estate lending, as such loans represented 424% of total bank capital as of December 31, 2024.
Based on these factors, the Bank has a concentration in multi-family and commercial real estate lending, as such loans represented 433% of total bank capital as of December 31, 2025.
The Company’s concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2024, the Company’s commercial real estate loan portfolio included loans to: (i) lessors of office buildings of $1.2 billion, or 12% of total loans; and (ii) borrowers in the retail industry of $1.2 billion, or 12% of total loans.
The Company’s concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2025, the Company’s commercial real estate - investor loan portfolio included loans to: (i) lessors of office buildings of $1.1 billion, or 10% of total loans; and (ii) borrowers in the retail industry of $1.1 billion, or 10% of total loans.
The loan sale agreements generally require the repurchase of certain loans previously sold in the event of a violation of various representations and warranties custom ary in the mortgage banking industry. FHLB, Fannie Mae, Freddie Mac and investors carefully examine loan documentation on delinquent loans for a possible reason to request a repurchase by the loan originator.
The loan sale agreements generally require the repurchase of certain loans previously sold in the event of a violation of various representations and warranties custom ary in the banking industry. Investors carefully examine loan documentation on delinquent loans for a possible reason to request a repurchase by the loan originator.
In addition, deflationary pressures, while possibly lowering operating costs, could have a significant negative effect on borrowers, especially business borrowers, and the values of underlying collateral securing loans, which could negatively affect financial performance. A downturn in the local economy or in local real estate values could adversely impact profits .
In addition, deflationary pressures, while possibly lowering operating costs, could have a significant negative effect on borrowers, especially business borrowers, and the values of underlying collateral securing loans, which could negatively affect financial performance. A downturn in economic conditions or in real estate values in the Bank’s market areas could adversely impact profits .
If any of the following risks actually occur, the Company’s financial condition or operating results may be harmed. In that case, the trading price of the Company’s common stock may decline and stockholders may lose part or all of their investment in the Company’s common stock or Series A Preferred Stock.
If any of the following risks actually occur, the Company ’s financial condition or operating results may be harmed. In that case, the trading price of the Company ’s common stock may decline and stockholders may lose part or all of their investment in the Company ’s common stock.
The Company may be challenged to successfully manage its business as a result of the strain on management and operations that may result from growth.
The Company may not successfully manage its business as a result of the strain on management and operations that may result from growth.
The computer systems, data management and internal processes, as well as those of third parties, are integral to the Company’s performance.
These computer systems, data management, and internal processes, as well as those of third parties, are integral to the Company ’s performance.
At December 31, 2024, the Company maintained a debt securities portfolio of $1.87 billion, of which $827.5 million was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes in interest rates and other factors.
At December 31, 2025, the Company maintained a debt securities portfolio of $2.11 billion, of which $1.23 billion was classified as available-for-sale. The estimated fair value of the available-for-sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes in interest rates and other factors.
Despite the Company’s efforts to ensure the integrity of its systems, the Company may not be able to implement effective preventive measures against all security breaches, especially because the techniques used change frequently or are not recognized until launched, and because cyberattacks can originate from a wide variety of sources.
Despite the Company ’s efforts to ensure the integrity of its systems, the Company may not be able to implement effective preventive measures against all attempted security breaches, especially because the techniques used change frequently or are deceptive in nature, and because cyberattacks can originate from a wide variety of sources.
Risks Related to Loan Sales The Company may be required to repurchase mortgage loans for a breach of representations and warranties, which could harm the Company’s earnings . The Compa ny enters into loan sale agreements with investors in the normal course of business.
Risks Related to Loan Sales The Company may be required to repurchase loans that had previously been sold for a breach of representations and warranties, which could harm the Company’s earnings . The Company enters into loan sale agreements with investors in the normal course of business.
A financial institution may be subject to this guidance if, among other factors, (i) total reported loans for construction, land acquisition and development and other land represent 100% or more of total capital, or (ii) total reported loans secured by multi-family and non-farm residential properties, loans for construction, land acquisition and development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, represent 300% or more of total capital.
A financial institution may be subject to this guidance if, among other factors, (i) total reported loans for construction, land acquisition and development and other land represent 100% or more of total capital and the outstanding balance of a financial institution’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months, or (ii) total reported loans secured by multi-family and non-farm residential properties, loans for construction, land acquisition and development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, represent 300% or more of total capital.
Risks Related to Acquisitions and Growth The Company must successfully integrate the operations and retain the customers of its acquired institutions . The Company has historically acquired financial institutions and other service companies and continues to explore acquisition opportunities.
Risks Related to Acquisitions and Growth The failure to successfully integrate the operations and retain the customers of its acquired institutions may adversely affect the Company’s results of operations . The Company has historically acquired financial institutions and other service companies and continues to explore acquisition opportunities.
These reasons and the legal and regulatory responses have impacted the foreclosure process and completion time of foreclosures f or residential mortgage lenders. This may result in a material adverse effect on collateral values and the Company’s ability to minimize its losses. Risks Related to Economic Matters Inflation can have an adverse impact on the Company’s business and its customers.
These reasons and the legal and regulatory responses have impacted the foreclosure process and completion time of foreclosures f or residential mortgage lenders. This may result in a material adverse effect on collateral values and the Company’s ability to minimize its losses.
Most of the Bank’s loans are s ecured by real estate and are made to borrowers throughout New Jersey and the major metropolitan areas between Massachusetts and Virginia.
Most of the Bank ’s loans are s ecured by real estate and are made to borrowers throughout New Jersey and the major metropolitan areas from Massachusetts through Virginia.
Stockholders should carefully consider the risks described below, together with other information contained in this Annual Report on Form 10-K and other documents filed with the SEC, before making any purchase or sale decisions regarding the Company’s common stock or Series A Preferred Stock.
Stockholders should carefully consider the risks described below, together with other information contained in this Annual Report on Form 10-K and other documents filed with the SEC, including the Company’s registration statement on Form S-4, before making any purchase or sale decisions regarding the Company ’s common stock.
Controls and procedures may fail or be circumvented, which, if not remediated appropriately or timely, could result in loss of investor confidence and adversely impact the Company’s stock price . Management routinely reviews and updates internal controls.
Any such charge could have an adverse effect on the results of operations. Controls and procedures may fail or be circumvented, which, if not remediated appropriately or timely, could result in loss of investor confidence and adversely impact the Company’s stock price . Management routinely reviews and updates internal controls.
Risks Related to Lending Activities The Company’s emphasis on commercial lending may expose the Company to increased lending risks . At December 31, 2024, $6.84 billion, or 67.4%, of the Company’s total loans consisted of commercial real estate, multi-family real estate, construction and land loans, and commercial and industrial loans.
Risks Related to Lending Activities The Company’s emphasis on commercial lending may expose the Company to increased lending risks . At December 31, 2025, $7.63 billion, or 69.2%, of the Company’s total loans consisted of commercial real estate, multi-family real estate, construction and land loans, and commercial and industrial loans.
Should the fundamentals of the commercial real estate market deteriorate, the Company’s financial condition and results of operations could be adversely affected. Uncertainties associated with increased originations of commercial real estate, construction and multi-family loans may result in errors in judging collectability, which may lead to additional provisions for credit losses or charge-offs, which would negatively affect the Company’s operations.
Uncertainties associated with increased originations of commercial real estate, construction, multi-family and commercial and industrial loans may result in errors in judging collectability, which may lead to additional provisions for credit losses or charge-offs, which would negatively affect the Company’s operations.
In some cases, the Company could be required to apply new or revised guidance retroactively. Risks Related to Environmental and Other Global Matters Hurricanes and other natural disasters, climate change or increases to flood insurance premiums could adversely affect asset quality and earnings . The Company’s market area includes counties in New Jersey with extensive coastal regions.
Risks Related to Environmental and Other Global Matters Hurricanes and other natural disasters, climate change or increases to flood insurance premiums could adversely affect asset quality and earnings . The Company’s market areas include counties in New Jersey with extensive coastal regions.
In addition, changes in interest rates can affect the average life of loans and investment securities. A reduction in interest rates causes increased prepayments of loans and mortgage-backed securities as borrowers refinance their debt to reduce their borrowing costs.
A reduction in interest rates causes increased prepayments of loans and mortgage-backed securities as borrowers refinance their debt to reduce their 39 borrowing costs.
The Bank is subject to regulation, supervision and examination by the OCC, its primary federal regulator, by the FDIC, as insurer of deposits, and by the CFPB with respect to consumer protection laws. Such regulation and supervision governs the activities in which an institution and its holding company may engage.
The Company is subject to examination, supervision and regulation by the FRB. The Bank is subject to regulation, supervision and examination by the OCC, its primary federal regulator, by the FDIC, as insurer of deposits, and by the CFPB with respect to consumer protection laws.
The 35 Company has exposure to many different counterparties, and routinely execute transactions with counterparties in the financial industry, including brokers and dealers, other commercial banks, investment banks, mutual and hedge funds, and other financial institutions.
Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. The Company has exposure to many different counterparties, and routinely execute transactions with counterparties in the financial industry, including brokers and dealers, other commercial banks, investment banks, mutual and hedge funds, and other financial institutions.
The Company’s board of directors relies on management in overseeing cybersecurity risk management. The Company has an Information Technology and Security Management Committee, consisting of leaders across multiple domains. The Chief Information Security Officer is a primary management liaison to the committee.
The Company’s Board relies on management in overseeing cybersecurity risk management. The Company has an Information Technology and Security Management Committee, consisting of leaders across multiple domains. The Chief Information Security Officer is a primary management liaison to the committee. The committee meets quarterly, or more frequently if needed, and reports to the Board after each meeting through committee minutes.
The Company’s ability to maximize profitability and manage growth successfully depends on its ability to attract and retain management and loan officers experienced in banking and financial services and fami liar with the communities in its market area.
The Company ’s ability to maximize profitability and manage growth successfully depends on its ability to attract and retain management and loan officers experienced in banking and financial services and fami liar with the communities in its market areas. Competition for qualified employees and personnel in the banking industry is intense.
In recognition of this shift in consumer patterns, the Company has undertaken a comprehensive review of its branch network, resulting in branch consolidation accompanied by the enhancement of the Company’s capabilities to serve its customers through alternate delivery channels.
In recognition of this shift in consumer patterns, the Company has undertaken a comprehensive review of its branch network, resulting in branch consolidation accompanied by the enhancement of the Company’s capabilities to serve its customers through alternate delivery channels. The benefits of this strategy are dependent on the Company’s ability to realize expected expense reductions without experiencing significant customer attrition.
Risks Related to Dividend Payments There is no guaranty that the Company will be able to continue to pay a dividend on its common stock or, if continued, will be able to pay a dividend at the current rate .
This could result in lower fee income, and loss of deposits, related to the Company’s payments processing business. Risks Related to Dividend Payments There is no guaranty that the Company will be able to continue to pay a dividend on its common stock or, if continued, will be able to pay a dividend at the current rate .
The benefits of this strategy are dependent on the Company’s ability to realize expected expense reductions without experiencing significant customer attrition. 34 Risks Related to Operational Matters Risks associated with system failures, interruptions, or breaches of security could disrupt businesses, result in the disclosure of confidential information, damage the reputation of, and create significant financial and legal exposure .
Risks Related to Operational Matters Risks associated with system failures, interruptions, or breaches of security could disrupt businesses, result in the disclosure of confidential information, damage the reputation of, and create significant financial and legal exposure .
Downgrades to the U.S. credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of the portfolio of such investment securities, and could result in the Company’s counterparties requiring additional collateral for borrowings.
Downgrades to the U.S. credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of the portfolio of such investment securities, and could result in the Company’s counterparties requiring additional collateral for borrowings. 38 Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase the Company’s future borrowing costs.
However, if repurchase activity or the amount of loss on the sale of a repurchased loan is greater than anticipated, the reserve may need to be increased to cover actual losses, which could harm earnings.
However, if repurchase activity or the amount of loss on the sale of a repurchased loan is greater than anticipated, the reserve may need to be increased to cover actual losses, which could harm earnings. 41 Risks Related to Laws and Regulations The Company and the Bank operate in a highly regu lated environment and may be adversely affected by changes in laws and regulations .
Item 1A. Risk Factors An investment in the Company’s common stock or the Series A Preferred Stock involves risks.
Item 1A. Risk Factors An investment in the Company ’s common stock involves risks.
Other Risks Related to the Business The Company’s stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions. Further, if the Company is unable to adequately manage liquidity, deposits, capital levels and interest rate risk, it may have a material adverse effect on the Company’s financial condition and results of operations.
Further, if the Company is unable to adequately manage liquidity, deposits, capital levels and interest rate risk, it may have a material adverse effect on the Company’s financial condition and results of operations.
Although the Company has a long history of paying a quarterly dividend on its common stock, there is no guaranty that such dividends will continue to be paid in the future or at what rate. Dividends on the Series A Preferred Stock are discretionary and non-cumulative . Dividends on the Series A Preferred Stock are discretionary and are not cumulative.
Although the Company has a long history of paying a quarterly dividend on its common stock, there is no guaranty that such dividends will continue to be paid in the future or at what rate. Risks Related to Competition Competition may adversely affect profitability and liquidity . The Company experiences substantial competition in originating loans in its market areas.
Any increase in the allowance for credit losses, or expenses incurred to determine the appropriate level of the allowance for credit losses, may have a material adverse effect on the Company’s financial condition and results of operations. The foreclosure process m ay adversely impact the Company’s recoveries on non-performing loans .
Any increase in the allowance for credit losses, or expenses incurred to determine the appropriate level of the allowance for credit losses, may have a material adverse effect on the Company’s financial condition and results of operations. The performance of New York City multifamily real estate loans could be adversely impacted by regulation .
Entering into new markets involves risks, such as competitive disadvantages through a lack of name recognition, increased marketing costs, and the inability to otherwise grow market share as needed to offset the costs associated with expansion. The failure to successfully expand the Company’s footprint or do so in an effective manner could adversely affect the Company’s results of operations.
The Company intends to expand its geographic footprint through acquisitions and organic growth. Entering into new markets involves risks, such as competitive disadvantages through a lack of name recognition, increased marketing costs, and the inability to otherwise grow market share as needed to offset the costs associated with expansion.
The NYS and NYC returns require consolidation of all entities and taxable income, consistent with other states, generally means Federal taxable income subject to certain adjustments.
The allocation and apportionment of taxable income to New Jersey may affect the overall tax rate. New York Taxation . The Company is required to file NYS and NYC tax returns. The NYS and NYC returns require consolidation of all entities and taxable income, consistent with other states, generally means Federal taxable income subject to certain adjustments.
The Company provides for losses by reserving what it believes to be an adequate amount to absorb any estimated lifetime expected credit losses. If the Company’s allowance was insufficient, it would be required to record a provision, which would reduce earnings for that period.
The Company provides for losses by reserving what it believes to be an adequate amount to absorb any estimated lifetime expected credit losses.
In order to successfully manage substantial growth, the Company may need to increase non-interest expenses through additional leasehold and data processing costs, and other infrastructure costs. In order to successfully manage growth, the Company may need to adopt and effectively implement new or revise existing policies, procedures and controls to maintain credit quality, control costs and oversee the Company’s operations.
In order to successfully manage substantial growth, the Company may need to increase non-interest expenses through additional hires, additional leasehold and data processing costs, and other infrastructure costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeEach committee consists of Board members, chaired by an independent director. Committee members have extensive expertise in various disciplines, including risk management, communications, information technology, litigation, banking and transactional matters, regulatory compliance, and cybersecurity. Board Committees receive regular reports informing on the effectiveness of the overall cybersecurity program and the detection, response, and recovery from significant cyber incidents.
Biggest changeBoard Committee Oversight The Company’s Risk and Information Technology Board Committees provide oversight of the cyber program as part of their overall remit. Each committee consists of Board members, chaired by an independent director. Committee members have extensive expertise in various disciplines, including risk management, communications, information technology, litigation, banking and transactional matters, regulatory compliance, and cybersecurity.
Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications. Notable services include 24/7 security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence.
Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, end user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications. Notable services include 24/7 security monitoring and response, ongoing vulnerability scanning, third-party monitoring, and threat intelligence.
Core activities supporting the Company’s strategy include cybersecurity training, technology optimization, threat intelligence, vulnerability and patch management and the testing of incident response, business continuity and disaster recovery capabilities. Employees play a significant role in the defense against cybersecurity threats. Every employee is responsible for protecting the Company’s and client’s information.
Core activities supporting the Company’s strategy include cybersecurity training, technology optimization, security monitoring and response, identity access management, threat intelligence, vulnerability and patch management and the testing of incident response, business continuity and disaster recovery capabilities. Employees play a significant role in the defense against cybersecurity threats. Every employee is responsible for protecting Company and client information.
To prepare and respond to incidents, the Company has implemented a multi-layered “defense-in-depth” cybersecurity strategy, integrating people, technology, and processes. This includes employee training, innovative technologies, and policies and procedures in the areas of Information Security, Data Governance, Business Continuity and Disaster Recovery, Privacy, Third-Party Risk Management, and Incident Response.
To prepare and respond to incidents, the Company has implemented a multi-layered “defense-in-depth” cybersecurity strategy, integrating people, technology, and processes using leading practices and in accordance with applicable regulatory requirements. This includes employee training, innovative technologies, and policies and procedures in the areas of Information Security, Data Governance, Business Continuity and Disaster Recovery, Privacy, Third-Party Risk Management, and Incident Response.
Accordingly, employees complete formal training and acknowledge security policies annually. In addition, employees are subjected to regular simulated phishing assessments, designed to sharpen threat detection and reporting capabilities. Employees are supported with solutions designed to identify, prevent, detect, respond to, and recover from incidents.
Accordingly, employees complete formal training and acknowledge security policies annually. In addition, employees are subjected to periodic simulated phishing assessments, designed to reinforce threat detection and reporting capabilities. Employees are supported with processes and related solutions designed to identify, prevent, detect, respond to, and recover from incidents.
Accordingly, the Company has implemented a Third-Party Risk Management program, which includes a detailed onboarding process and periodic reviews of vendors with access to sensitive company data. As indicated above, supporting the operations are incident response, business continuity, and disaster recovery programs. These programs identify and assess threats and evaluate risk.
As third-party vendors continue to be a notable source of operational and informational risk, the Company has implemented a structured Third-Party Risk Management program, which includes a defined onboarding process and periodic reviews of vendors with access to sensitive company data. As indicated above, supporting the operations are incident response, business continuity, and disaster recovery programs.
Like many other companies, the Company relies on third-party vendor solutions to support its operations; many of these vendors have access to sensitive and proprietary information. Third-party vendors continue to be a notable source of operational 39 and informational risk.
Like many other financial institutions, the Company relies on third-party vendor solutions to support its operations; many of these vendors have access to sensitive and proprietary information.
The Chief Information Security Officer has several years of experience leading cybersecurity operations in financial services, supported by a team with various security, technical, risk, audit and leadership certifications. Management provides cybersecurity statistics and details to the board monthly. Board Committee Oversight The Company’s Risk and IT Board Committees provide oversight of the cyber program.
The Chief Information Security Officer has several years of experience leading cybersecurity operations in financial 50 services, supported by a team with various security, technical, risk, audit and program management subject matter knowledge. Management, through the Information Security and Information Technology Governance function, provides cybersecurity statistics and details to the board monthly.
Cybersecurity Governance Management Committee Oversight The Company has established an Information Technology and Security Management Committee consisting of department leaders across multiple functional areas including Data Engineering, Enterprise Applications, Strategic Planning, Technology, IT Governance, and Cybersecurity. These functional areas are led by qualified financial service technology professionals, with extensive certifications and advanced degrees in cybersecurity.
Cybersecurity Governance Management Committee Oversight The Company has established an Information Security Management and Information Technology structure consisting of department leaders across multiple functional areas including Data Engineering, Enterprise Applications, Strategic Planning, Technology, Information Technology Governance, and Cybersecurity.
Further, these programs support a coordinated response when responding to incidents. Periodic exercises and tests verify these programs’ effectiveness. Validating solution and program effectiveness in relation to regulatory compliance and industry standards is important. Accordingly, the Company engages third-party consultants and independent auditors to conduct penetration tests, cybersecurity risk assessments, external audits, and program development and enhancement where applicable.
These programs identify and assess threats and evaluate risk. Further, these programs support a coordinated response when responding to incidents. Periodic exercises and tests verify these programs’ effectiveness. Validating solution and program effectiveness in relation to regulatory compliance and industry standards is important.
Policies are also shared with the management Risk Committee to provide a second line review in alignment with Enterprise Risk functions. All Information Security activity is led by the Chief Information Security Officer, which includes developing and implementing the information security program and reporting on cybersecurity matters to the Board.
All Information Security activities are led by the Chief Information Security Officer, which includes developing and implementing the information security program and reporting on cybersecurity matters to the Company’s leadership team and the Board.
Cybersecurity metrics are reported quarterly to both committees and key risk indicators are reported to the Risk Committee.
Board Committees receive regular reports informing on the effectiveness of the overall cybersecurity program and the detection, response, and recovery from significant cyber incidents. Cybersecurity metrics are reported quarterly to both committees and key risk indicators are reported to the Risk Committee.
Cybersecurity knowledge is expanded across all areas of Information Technology and is foundational in the approach from planning to execution. The committee focuses on strategic and tactical delivery, policy oversight, and the assessment and management of material risks from cybersecurity threats.
The structure enables a focus on strategic and tactical delivery, policy oversight, and the assessment and management of risks from cybersecurity threats. Policies are also shared with the Company’s Management Risk Committee to provide a second line review in alignment with Enterprise Risk functions.
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Accordingly, the Company engages third-party consultants and independent auditors to conduct penetration tests, cybersecurity risk assessments, external audits, and program development and enhancement where applicable.
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These functional areas, which collaborate on a daily basis, are led by qualified financial service technology professionals, with extensive experience in their subject matter. Cybersecurity knowledge is integrated across Information Technology, Business Units, and Operating Functions and is a key consideration in the approach from planning to execution, including when third parties are involved.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company also conducts its business at 39 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia. The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, and Boston.
Biggest changeThe Company also conducts its business at 41 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia. The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, Boston and Northern Virginia.
Item 2. Properties At December 31, 2024, the Company primarily conducted its business through its headquarters located in Toms River, New Jersey, and its administrative office located in Red Bank, New Jersey.
Item 2. Properties At December 31, 2025, the Company primarily conducted its business through its headquarters located in Toms River, New Jersey, and its administrative office located in Red Bank, New Jersey.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn June 25, 2021, the Company announced the authorization to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2024. At December 31, 2024, there were 1,551,200 shares available for repurchase.
Biggest changeOn June 25, 2021, the Company announced the authorization to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. Further, on July 16, 2025, the Company announced its Board authorized a 2025 Stock Repurchase Program to repurchase up to an additional 3.0 million shares.
Stock Performance Graph The following graph shows a comparison of total stockholder return on OceanFirst Financial Corp.’s common stock, based on the market price of the Company’s common stock with the cumulative total return of companies in the NASDAQ Composite Index and the KBW Regional Banking Index for the period from December 31, 2019 through December 31, 2024.
Stock Performance Graph The following graph shows a comparison of total stockholder return on OceanFirst Financial Corp.’s common stock, based on the market price of the Company’s common stock with the cumulative total return of companies in the NASDAQ Composite Index and the KBW Regional Banking Index for the period from December 31, 2020 through December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock OceanFirst Financial Corp.’s common stock is traded on the NASDAQ Global Select Market under the symbol OCFC. As of February 21, 2025, there were 2,588 common stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock OceanFirst Financial Corp.’s common stock is traded on the NASDAQ Global Select Market under the symbol OCFC. As of February 19, 2026, there were 2,464 common stockholders of record.
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 OceanFirst Financial Corp. $100.00 $75.89 $93.45 $92.65 $79.47 $86.95 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 KBW Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90 For both years ended December 31, 2024 and 2023, the Company paid an annual cash dividend of $0.80 per share.
Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 OceanFirst Financial Corp. $ 100.00 $ 123.13 $ 122.08 $ 104.71 $ 114.57 $ 119.00 NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 KBW Regional Banking Index 100.00 136.64 127.17 126.67 143.39 152.71 For both years ended December 31, 2025 and 2024, the Company paid an annual cash dividend of $0.80 per share.
Added
The stock repurchase plans have no scheduled expiration date and the Board of Directors has the right to suspend or discontinue the plans at any time. The Company did not repurchase any shares of its common stock through the stock repurchase programs during the quarter ended December 31, 2025.
Added
At December 31, 2025, there were 3,226,284 shares available for repurchase under the Company’s stock repurchase programs. 52 For the three months ended December 31, 2025, 29,284 shares were repurchased outside of the Company’s stock repurchase program at an average share price of $19.05. The Company repurchased these shares from employees that elected to exercise vested stock options.
Added
These shares were repurchased pursuant to the terms of the applicable plan and not under the Company’s share repurchase program.
Added
Period Total Number of Shares Purchased Average Price Paid per Share October 1, 2025 through October 31, 2025 1,319 $ 19.23 November 1, 2025 through November 30, 2025 2,385 17.81 December 1, 2025 through December 31, 2025 25,580 19.15 Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

111 edited+36 added−38 removed32 unchanged
Biggest changeAt December 31, 2024 2023 2022 (dollars in thousands) Selected Financial Condition Data: Total assets $ 13,421,247 $ 13,538,253 $ 13,103,896 Debt securities available-for-sale, at estimated fair value 827,500 753,892 457,648 Debt securities held-to-maturity, net of allowance for securities credit losses 1,045,875 1,159,735 1,221,138 Equity investments 84,104 100,163 102,037 Restricted equity investments, at cost 108,634 93,766 109,278 Loans receivable, net of allowance for loan credit losses 10,055,429 10,136,721 9,868,718 Deposits 10,066,342 10,434,949 9,675,206 Federal Home Loan Bank ("FHLB") advances 1,072,611 848,636 1,211,166 Securities sold under agreements to repurchase and other borrowings 258,113 269,604 264,500 Total stockholders’ equity 1,702,757 1,661,945 1,585,464 For the Year Ended December 31, 2024 2023 2022 (dollars in thousands, except per share amounts) Selected Operating Data: Interest income $ 642,173 $ 607,974 $ 431,175 Interest expense 308,138 238,243 53,698 Net interest income 334,035 369,731 377,477 Provision for credit losses 6,263 17,678 7,768 Spring Garden opening provision for credit losses 1,426 — — Net interest income after provision for credit losses 326,346 352,053 369,709 Other income (excluding activity related to debt and equity investments and sale of trust business) 43,362 38,053 49,409 Net gain on equity investments 4,225 876 9,685 Net gain on sale of trust business 2,600 — — Net loss on sale of investments — (5,305) — Operating expenses (excluding Federal Deposit Insurance Corporation (“FDIC”) special assessment, merger related and net branch consolidation expense) 243,680 247,157 231,433 FDIC special assessment 418 1,663 — Branch consolidation expense, net — 70 713 Merger related expenses 1,779 22 2,735 Income before provision for income taxes 130,656 136,765 193,922 Provision for income taxes 30,266 32,700 46,565 Net income $ 100,390 $ 104,065 $ 147,357 Net income attributable to non-controlling interest 325 36 754 Net income attributable to OceanFirst Financial Corp. $ 100,065 $ 104,029 $ 146,603 Net income available to common stockholders $ 96,049 $ 100,013 $ 142,587 Basic earnings per share $ 1.65 $ 1.70 $ 2.43 Diluted earnings per share $ 1.65 $ 1.70 $ 2.42 44 (continued) At or for the Year Ended December 31, 2024 2023 2022 Selected Financial Ratios and Other Data (1) : Performance Ratios: Return on average assets (2)(3) 0.71 % 0.74 % 1.15 % Return on average stockholders’ equity (2)(3) 5.70 6.13 9.24 Stockholders’ equity to total assets 12.69 12.28 12.10 Net interest rate spread (4) 2.13 2.51 3.20 Net interest margin (5) 2.72 3.02 3.37 Operating expenses to average assets (2) 1.82 1.85 1.90 Efficiency ratio (2)(6) 63.99 61.71 53.80 Loans-to-deposits ratio (7) 100.50 97.70 102.50 Asset Quality Ratios (8) : Non-performing loans as a percent of total loans receivable (7)(9) 0.35 0.29 0.23 Non-performing assets as a percent of total assets (9) 0.28 0.22 0.18 Allowance for loan credit losses as a percent of total loans receivable (7)(10) 0.73 0.66 0.57 Allowance for loan credit losses as a percent of total non-performing loans (9)(10) 207.19 227.21 244.25 Wealth Management (dollars in thousands): Wealth assets under administration and management (“AUA/M”) (11) $ 147,956 $ 335,769 $ 324,066 Nest Egg AUA/M 431,434 401,420 403,538 Per Share Data: Cash dividends per common share $ 0.80 $ 0.80 $ 0.74 Dividend payout ratio per common share 48.48 % 47.06 % 30.58 % Stockholders’ equity per common share at end of period $ 29.08 $ 27.96 $ 26.81 Number of full-service customer facilities: 39 39 38 (1) With the exception of end of year ratios, all ratios are based on average daily balances.
Biggest changeAt December 31, 2025 2024 2023 (dollars in thousands) Selected Financial Condition Data: Total assets $ 14,564,317 $ 13,421,247 $ 13,538,253 Debt securities available-for-sale, at estimated fair value 1,231,827 827,500 753,892 Debt securities held-to-maturity, net of allowance for securities credit losses 881,568 1,045,875 1,159,735 Equity investments 91,882 84,104 100,163 Restricted equity investments, at cost 129,329 108,634 93,766 Loans receivable, net of allowance for loan credit losses 10,970,666 10,055,429 10,136,721 Deposits 10,964,405 10,066,342 10,434,949 FHLB advances 1,397,179 1,072,611 848,636 Securities sold under agreements to repurchase and other borrowings 309,667 258,113 269,604 Total stockholders’ equity 1,662,550 1,702,757 1,661,945 For the Year Ended December 31, 2025 2024 2023 (dollars in thousands, except per share amounts) Selected Operating Data: Interest income $ 642,454 $ 642,173 $ 607,974 Interest expense 282,231 308,138 238,243 Net interest income 360,223 334,035 369,731 Provision for credit losses 16,171 7,689 17,678 Net interest income after provision for credit losses 344,052 326,346 352,053 Other income 44,701 50,187 33,624 Operating expenses 296,237 245,877 248,912 Income before provision for income taxes 92,516 130,656 136,765 Provision for income taxes 21,489 30,266 32,700 Net income $ 71,027 $ 100,390 $ 104,065 Net income attributable to non-controlling interest 49 325 36 Net income attributable to OceanFirst Financial Corp. $ 70,978 $ 100,065 $ 104,029 Net income available to common stockholders $ 67,128 $ 96,049 $ 100,013 Basic earnings per share $ 1.17 $ 1.65 $ 1.70 Diluted earnings per share $ 1.17 $ 1.65 $ 1.70 56 (continued) At or for the Year Ended December 31, 2025 2024 2023 Selected Financial Ratios and Other Data (1) : Performance Ratios: Return on average assets (2)(3) 0.49 % 0.71 % 0.74 % Return on average stockholders’ equity (2)(3) 4.00 5.70 6.13 Stockholders’ equity to total assets 11.42 12.69 12.28 Net interest rate spread (4) 2.36 2.13 2.51 Net interest margin (5) 2.90 2.72 3.02 Operating expenses to average assets (2) 2.18 1.82 1.85 Efficiency ratio (2)(6) 73.16 63.99 61.71 Loans-to-deposits ratio (7) 100.60 100.50 97.70 Asset Quality Ratios (8) : Non-performing loans as a percent of total loans receivable (7)(9) 0.25 0.35 0.29 Non-performing assets as a percent of total assets (9) 0.26 0.28 0.22 Allowance for loan credit losses as a percent of total loans receivable (7)(10) 0.76 0.73 0.66 Allowance for loan credit losses as a percent of total non-performing loans (9)(10) 301.27 207.19 227.21 Wealth Management (dollars in thousands): AUA/M (11) $ 142,030 $ 147,956 $ 335,769 Nest Egg AUA/M 485,606 431,434 401,420 Per Share Data: Cash dividends per common share $ 0.80 $ 0.80 $ 0.80 Dividend payout ratio per common share 68.38 % 48.48 % 47.06 % Stockholders’ equity per common share at end of period $ 28.97 $ 29.08 $ 27.96 Number of full-service customer facilities: 41 39 39 (1) With the exception of end of year ratios, all ratios are based on average daily balances.
Expanding the Company’s geographies and diversifying the loan book provides a hedge on risks deriving from a concentration in a single market.
Expanding the Company’s geographies and diversifying the loan book provides a hedge on risks deriving from concentration in a single market.
Additionally, regulations of the Federal Reserve may prevent the Company from either paying or increasing the cash dividend to common stockholders. These regulatory policies may affect the ability of the Parent Company to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.
Additionally, regulations of the Federal Reserve may prevent the Parent Company from either paying or increasing the cash dividend to common stockholders. These regulatory policies may affect the ability of the Parent Company to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.
The policy includes internal limits, monitoring of key indicators, sources and availability, intercompany transactions, forecasts and stress testing, and other qualitative and quantitative metrics. Additionally, management performs multiple capital stress test scenarios on a quarterly basis, varying loan growth, earnings, access to the capital markets, credit losses, and mark-to-market losses in the investment portfolio, including both available-for-sale and held-to-maturity.
The policy includes internal limits, monitoring of key indicators, sources and availability, intercompany transactions, forecasts and stress testing, and other qualitative and quantitative metrics. Management performs multiple capital stress test scenarios on a quarterly basis, varying loan growth, earnings, access to the capital markets, credit losses, and mark-to-market losses in the investment portfolio, including both available-for-sale and held-to-maturity.
Capital Management The Company manages its capital sources, uses, and expected future needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses capital and management monitors the adherence to policy limits to satisfy current and future capital needs.
Capital Management The Company manages its capital sources, uses, and expected future needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses capital and management monitors the adherence to policy limits 64 to satisfy current and future capital needs.
Allowance for Credit Losses (“ACL”) The Company’s methodology to measure the ACL incorporates both quantitative and qualitative information to assess lifetime expected credit losses at the portfolio segment level.
Allowance for Credit Losses The Company’s methodology to measure the ACL incorporates both quantitative and qualitative information to assess lifetime expected credit losses at the portfolio segment level.
The results of the quantitative assessment indicated that the fair value of the Company’s reporting unit exceeded its carrying amount, which resulted in no impairment loss at August 31, 2024. Management continued to carefully assess and evaluate all available information for potential triggering events after the August 31 annual testing date and through December 31, 2024.
The results of the quantitative assessment indicated that the fair value of the Company’s reporting unit exceeded its carrying amount, which resulted in no impairment loss at August 31, 2025. Management continued to carefully assess and evaluate all available information for potential triggering events after the August 31 annual testing date and through December 31, 2025.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. 67
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The Company conducts business primarily through its ownership of the Bank, which, at December 31, 2024, primarily operated out of its headquarters located in Toms River, New Jersey and its administrative office located in Red Bank, New Jersey.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The Company conducts business primarily through its ownership of the Bank, which, at December 31, 2025, primarily operated out of its headquarters located in Toms River, New Jersey and its administrative office located in Red Bank, New Jersey.
The critical accounting policy and its application is reviewed periodically, and at least annually, with the Audit Committee of the Board of Directors.
The critical accounting policy and its application is reviewed periodically, and at least annually, with the Audit Committee of the Board.
The Company continually evaluates its on-balance sheet liquidity, including cash and unpledged securities and funding capacity at the FHLB and FRB Discount Window, and periodically tests each of its lines of credit. As of December 31, 2024, total on-balance sheet liquidity and funding capacity was $3.8 billion.
The Company continually evaluates its on-balance sheet liquidity, including cash and unpledged securities and funding capacity at the FHLB and FRB Discount Window, and periodically tests each of its lines of credit. As of December 31, 2025, total on-balance sheet liquidity and funding capacity was $3.8 billion.
Commercial loan products entail a higher degree of credit risk than residential real estate lending activity. As a result, management continues to employ a well-defined credit policy focusing on quality underwriting and close oversight and Board monitoring.
Commercial loan products entail a higher degree of credit risk than other real estate lending activity. As a result, management continues to employ a well-defined credit policy focusing on quality underwriting and close oversight and Board monitoring.
Goodwill in accordance with ASC 350, Intangibles - Goodwill and Other, was a critical accounting estimate in the preparation of the consolidated financial statements as of and for the period ended December 31, 2024.
Goodwill in accordance with ASC 350, Intangibles - Goodwill and Other, was a critical accounting estimate in the preparation of the consolidated financial statements as of and for the period ended December 31, 2025.
Comparison of Operating Results for the Years Ended December 31, 2023 and December 31, 2022 Refer to the Company’s 2023 Form 10-K on pages 50-51. Liquidity and Capital Resources Liquidity Management The Company manages its liquidity and funding needs through its Treasury function and the Asset Liability Committee.
Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 Refer to the Company’s 2024 Form 10-K on pages 50-51. 62 Liquidity and Capital Resources Liquidity Management The Company manages its liquidity and funding needs through its Treasury function and the Asset Liability Committee.
Time deposits scheduled to mature in one year or less totaled $2.02 billion at December 31, 2024. If these deposits do not remain with the Company, it may need to seek other sources of funds, including other deposit products, advances from the Federal Home Loan Bank of New York and other borrowing sources.
Time deposits scheduled to mature in one year or less totaled $2.43 billion at December 31, 2025. If these deposits do not remain with the Company, it may need to seek other sources of funds, including other deposit products, advances from the Federal Home Loan Bank of New York and other borrowing sources.
Net income available to common stockholders for the year ended December 31, 2024 included an opening provision for credit losses related to the acquisition of Spring Garden of $1.4 million, net gain on equity investments of $4.2 million, net gain on sale of trust business of $2.6 million, merger related expenses of $1.8 million, and a special assessment charge of $418,000 related to the FDIC’s final rule to recover the loss on the Deposit Insurance Fund (“DIF”).
Net income available to common stockholders for the year ended December 31, 2024 included an opening provision for credit losses related to the acquisition of Spring Garden of $1.4 million, net gain on equity investments of $4.2 million, net gain on sale of trust business of $2.6 million, merger related expenses of $1.8 million, and a special assessment charge of $418,000 related to the FDIC’s final rule to recover the loss on the DIF.
The Bank also conducts its business at 39 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia. The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, and Boston.
The Bank also conducts its business at 41 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia. The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, Boston and Northern Virginia.
If applicable regulations or regulatory bodies prevent the Bank from paying a dividend to the Company, the Company may not have the liquidity necessary to repurchase shares of common stock or pay a dividend in the future or pay a dividend at the same rate as historically paid or be able to meet current debt obligations.
If applicable regulations or regulators prevent the Bank from paying a dividend to the Parent Company, the Parent Company may not have the liquidity necessary to repurchase shares of common stock or pay a dividend in the future or pay a dividend at the same rate as historically paid or be able to meet current debt obligations.
The Company supports commercial business clients of varying sizes and complexity through the extension of credit and cash management services through its advisory relationship management model. The Company has had success in developing new client relationships in the Company’s focused expansion markets, which include Philadelphia, New York, Boston and Baltimore.
The Company supports commercial business clients of varying sizes and complexity through the extension of credit and cash management services through its advisory relationship management model. The Company has had success in developing new client relationships in the Company’s focused expansion markets, which include Boston, Northern Virginia and Baltimore.
Net income available to common stockholders for the year ended December 31, 2024 included the Spring Garden opening provision for credit losses of $1.4 million, net gain on equity investments of $4.2 million, a net gain on sale of a portion of its trust business of $2.6 million, a special FDIC assessment of $418,000 and merger related expenses of $1.8 million.
Net income for the year ended December 31, 2024 included the Spring Garden opening provision for credit losses of $1.4 million, net gain on equity investments of $4.2 million, a net gain on sale of a portion of its trust business of $2.6 million, a FDIC special assessment fees of $418,000 and merger related expenses of $1.8 million.
The Company’s results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies and actions of regulatory agencies.
The Company’s results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies, including the imposition of tariffs and retaliatory responses, and actions of regulatory agencies.
Strategy The Company operates as a full-service regional community bank delivering comprehensive financial products and services, which includes commercial and consumer financing, deposit services, and wealth management products and services, throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia.
Strategy The Company operates as a full-service regional community bank delivering comprehensive financial products and services, which includes commercial financing, deposit services, and wealth management products and services, throughout New Jersey and in the major metropolitan areas from Massachusetts through Virginia.
As of December 31, 2024, the Company pledged $7.43 billion of loans with the FHLB and FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a municipal letter of credit to collateralize certain municipal deposits.
As of December 31, 2025, the Company pledged $7.92 billion of loans with the FHLB and FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a letter of credit to collateralize certain municipal deposits.
(2) Performance ratios for 2024 included a net benefit related to Spring Garden Capital Group, LLC (“Spring Garden”) opening provision for credit losses, a net gain on equity investments, a net gain on sale of trust business, FDIC special assessment and merger related expenses of $3.2 million, or $2.5 million, net of tax expense.
Performance ratios for 2024 included a net benefit related to Spring Garden opening provision for credit losses, a net gain on equity investments, a net gain on sale of trust business, FDIC special assessment and merger related expenses of $3.2 million, or $2.5 million, net of tax expense.
Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the years ended December 31, 2024, 2023, and 2022, interest income included net loan fees of $3.3 million, $2.9 million, and $3.0 million, respectively.
Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the years ended December 31, 2025, 2024, and 2023, interest income included net loan fees of $5.7 million, $3.3 million, and $2.9 million, respectively.
Although management believes that it uses the best information available to establish the ACL in conformity with generally accepted accounting principles (“GAAP”), future adjustments to the ACL may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.
Although management believes that it uses the best information available to establish the ACL in conformity with GAAP, future adjustments to the ACL may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.
Additionally, management performs multiple liquidity stress test scenarios on a periodic basis. As of December 31, 2024, the Bank and the Parent Company continued to maintain adequate liquidity under all stress scenarios. The Company also has a detailed contingency funding plan and obtains comprehensive reporting of funding trends on a monthly and quarterly basis, which are reviewed by management.
As of December 31, 2025, the Bank and the Parent Company continued to maintain adequate liquidity under all stress scenarios. The Company also has a detailed contingency funding plan and obtains comprehensive reporting of funding trends on a monthly and quarterly basis, which are reviewed by management.
Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023 General Net income available to common stockholders decreased to $96.0 million, or $1.65 per diluted share, as compared to $100.0 million, or $1.70 per diluted share.
Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024 General Net income available to common stockholders decreased to $67.1 million, or $1.17 per diluted share, as compared to $96.0 million, or $1.65 per diluted share.
Allowance for credit losses in accordance with Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), was a critical accounting policy in the preparation of the consolidated financial statements as of and for the period ended December 31, 2024.
Allowance for credit losses in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), was a critical accounting policy in the preparation of the consolidated financial statements as of and for the period ended December 31, 2025.
Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill.
First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill.
The following table sets forth certain information relating to the Company for each of the years ended December 31, 2024, 2023 and 2022. The yields and costs are derived by dividing the income or expense by the average balance of assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances.
The following table sets forth certain information relating to the Company for each of the years ended December 31, 2025, 2024 and 2023. The yields and costs, which are annualized, are derived by dividing the income or expense by the average balance of the related assets or liabilities, respectively, for the periods shown except where noted otherwise.
The Company assumes a reasonable and supportable forecast period of eight quarters and a reversion period of four quarters based on the analysis of historical U.S. business cycles. Prepayment and forward interest rate projections are also assumptions used in the quantitative model subject to estimation.
The Company assumes a reasonable and supportable forecast period of eight quarters and a reversion period of four quarters based on the analysis of historical U.S. business cycles. 65 Prepayment and forward interest rate projections are also assumptions used in the quantitative model subject to estimation. Changes in these assumptions have varying implications to the ACL measurement.
Performance ratios for 2022 included a net benefit related to merger related expenses, net branch consolidation expense, and gain on equity investments of $6.2 million, or $4.6 million, net of tax expense. (3) Ratios for each period are based on net income available to common stockholders.
Performance ratios for 2023 included a net expense related to merger related expenses, net branch consolidation expense, FDIC special assessment, net loss on sale of investments and net gain on equity investments of $6.2 million, or $4.7 million, net of tax benefit. (3) Ratios for each period are based on net income available to common stockholders.
To accomplish these objectives, the Company has sought to: (1) diversify and strengthen its deposit base through product offerings appealing to a broadened customer base; (2) grow the commercial banking business, with a particular focus on strengthening commercial and industrial banking; (3) expand the residential lending business, focusing on the secondary market and saleable loan business; and (4) improve operating efficiency through the ongoing investment in information technology.
To accomplish these objectives, the Company has sought to: (1) diversify and strengthen its deposit base through product offerings appealing to a broadened customer base; (2) grow the commercial banking business, with a particular focus on strengthening commercial and industrial banking; and (3) improve operating efficiency through the ongoing investment in information technology and infrastructure.
Subjective factors incorporate external factors, personnel, and controls, as well as portfolio composition and performances. Subjective factors also include: local competition; portfolio nature, volume and concentration; credit trends; lending policy, procedure and loan review; lending management and staff; regulatory changes and forecast uncertainty.
Management considers subjective, objective, and unique qualitative factors at each estimation date. Subjective factors incorporate external factors, personnel, and controls, as well as portfolio composition and performances. Subjective factors also include: local competition; portfolio nature, volume and concentration; credit trends; lending policy, procedure and loan review; lending management and staff; regulatory changes and forecast uncertainty.
Additionally, the Company remains well-capitalized with a stockholders’ equity to total assets ratio of 12.69% at December 31, 2024. 46 Analysis of Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.
Additionally, the Company remains well-capitalized with a stockholders’ equity to total assets ratio of 11.42% at December 31, 2025. 58 Analysis of Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.
The Company competes with larger, out-of-market financial service providers through its local and digital focus and the delivery of superior service. The Company also competes with smaller in-market financial service providers by offering a broad array of products and services as well as the ability to extend larger credits.
The Company competes with larger, out-of-market financial service providers through its entrenched presence in local markets, digital delivery channels, and agility to provide superior service at speed. The Company also competes with smaller in-market financial service providers by offering a broad array of products and services as well as the ability to extend larger credits.
If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the Company that is greater than the carrying amount, then no impairment charge is recorded.
If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the Company that is greater than the carrying amount, then no impairment charge is recorded. 66 The Company completed its annual goodwill impairment test as of August 31, 2025.
The net unamortized credit and purchased with credit deterioration (“PCD”) marks on these loans, not reflected in the allowance for loan credit losses, was $6.0 million, $7.5 million, and $11.4 million at December 31, 2024, 2023, and 2022, respectively.
The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $4.0 million, $6.0 million, and $7.5 million at December 31, 2025, 2024, and 2023, respectively.
The effective tax rate was 23.2%, as compared to 23.9%. The current year’s effective tax rate was adversely impacted by a non-recurring write-off of a deferred tax asset of $1.2 million net of other state effects and credits as compared to the prior year period.
The prior year’s effective tax rate was adversely impacted by a non-recurring write-off of a deferred tax asset of $1.2 million net of other state effects and credits.
(11) During 2024, the Company sold a portion of its trust business resulting in gain on sale of $2.6 million. 45 Summary Highlights of the Company’s financial results for the year ended December 31, 2024 as compared to December 31, 2023 were as follows: Total assets decreased by $117.0 million to $13.42 billion, from $13.54 billion, primarily due to decreases in loans and securities.
(11) During 2024, the Company sold a portion of its trust business resulting in gain on sale of $2.6 million. 57 Summary Highlights of the Company’s financial results for the year ended December 31, 2025 as compared to December 31, 2024 were as follows: Total assets increased by $1.14 billion to $14.56 billion, from $13.42 billion, primarily due to increases in loans and securities.
The Company’s stockholders’ equity to assets ratio was 12.69%, as compared to 12.28% and book value per common share increased to $29.08, as compared to $27.96.
The Company’s stockholders’ equity to assets ratio was 11.42%, as compared to 12.69% and book value per common share decreased to $28.97, as compared to $29.08.
Other income for the year ended December 31, 2024 was favorably impacted by net gains on equity investments of $4.2 million and a net gain on sale of a portion of its trust business of $2.6 million.
The prior year was favorably impacted by net gains on equity investments of $4.2 million and a net gain on sale of a portion of its trust business of $2.6 million.
Refer to ‘Liquidity and Capital Resources’ for further discussion. Diversify and Strengthen Deposit Base The Company continues to focus on deposit growth through a series of initiatives intended to both grow deposits and diversify sources of liquidity. The Company seeks to increase deposits in its primary market area by improving market penetration and expanding deposit gathering initiatives and hires.
Diversify and Strengthen Deposit Base The Company continues to focus on deposit growth through a series of initiatives intended to both grow deposits and diversify sources of liquidity. The Company seeks to increase deposits in its primary market area by improving market penetration, expanding deposit gathering initiatives and investing in deposit focused talent acquisition.
Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company’s exposure to credit risk is represented by the contractual amount of the instruments.
Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company’s exposure to credit risk is represented by the contractual amount of the instruments. These commitments are further discussed in Note 13 Commitments, Contingencies and Concentrations of Credit Risk, to the Consolidated Financial Statements.
At December 31, 2024, commercial loans (which includes multi-family and commercial real estate loans, commercial construction loans, and commercial and industrial loans) represented 67.4% of the Company’s total loans, as compared to 68.5% at December 31, 2022, of which commercial and industrial loans represented 6.4% of total loans as compared to 6.3% at December 31, 2022.
At December 31, 2025, commercial loans (which includes multi-family and commercial real estate loans, commercial construction loans, and commercial and industrial loans) represented 69.2% of the Company’s total loans, as compared to 67.4% at December 31, 2024, of which commercial and industrial loans represented 20.1% of total loans as compared to 15.3% at December 31, 2024.
The yields and costs include certain fees and costs which are considered adjustments to yields.
Average balances are derived from average daily balances. The yields and costs include certain fees and costs which are considered adjustments to yields.
(2) Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held-for-sale and non-performing loans. 48 Comparison of Financial Condition at December 31, 2024 and December 31, 2023 Total assets decreased by $117.0 million to $13.42 billion, from $13.54 billion, primarily due to decreases in loans and securities.
(2) Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held-for-sale and non-performing loans . 60 Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Total assets increased by $1.14 billion to $14.56 billion, from $13.42 billion, primarily due to increases in loans and, to a lesser extent, securities.
Management concluded no triggering events were identified subsequent to the August 31, 2024 annual test date. Significant negative industry or economic trends, including declines in the market price of the Company’s stock, reduced estimates of future cash flows or business disruptions could result in impairments to goodwill in the future, which would result in recording an impairment loss.
Significant negative industry or economic trends, including declines in the market price of the Company’s stock, reduced estimates of future cash flows or business disruptions could result in impairments to goodwill in the future, which would result in recording an impairment loss.
At December 31, 2024, outstanding commitments to originate loans totaled $306.7 million and outstanding undrawn lines of credit totaled $1.37 billion, of which $1.06 billion were commitments to commercial and commercial construction borrowers and $310.8 million were commitments to consumer and residential construction borrowers.
At December 31, 2025, outstanding commitments to originate loans totaled $474.1 million and outstanding undrawn lines of credit totaled $1.88 billion, of which $1.60 billion were commitments to commercial and commercial construction borrowers and $278.8 million were commitments to consumer and residential construction borrowers.
For the Year Ended December 31, 2024 2023 2022 (dollars in thousands) Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Assets: Interest-earning assets: Interest-earning deposits and short-term investments $ 175,611 $ 9,381 5.34 % $ 327,539 $ 17,084 5.22 % $ 72,913 $ 1,106 1.52 % Securities (1) 2,084,451 87,549 4.20 1,905,413 69,025 3.62 1,792,598 39,683 2.21 Loans receivable, net (2) Commercial 6,836,728 410,978 6.01 6,903,731 400,459 5.80 6,386,755 287,044 4.49 Residential real estate 2,998,732 117,747 3.93 2,911,246 105,796 3.63 2,724,398 91,432 3.36 Home equity loans and line and other consumer (“other consumer”) 243,360 16,518 6.79 255,359 15,610 6.11 256,912 11,910 4.64 Allowance for loan credit losses, net of deferred loan costs and fees (59,289) — — (53,477) — — (44,446) — — Loans receivable, net 10,019,531 545,243 5.44 10,016,859 521,865 5.21 9,323,619 390,386 4.19 Total interest-earning assets 12,279,593 642,173 5.23 12,249,811 607,974 4.96 11,189,130 431,175 3.85 Non-interest-earning assets 1,215,809 1,237,218 1,200,725 Total assets $ 13,495,402 $ 13,487,029 $ 12,389,855 Liabilities and Stockholders’ Equity: Interest-bearing liabilities: Interest-bearing checking $ 3,923,846 86,320 2.20 % $ 3,795,502 52,898 1.39 % $ 4,063,716 11,344 0.28 % Money market 1,214,690 41,948 3.45 794,387 18,656 2.35 764,837 2,234 0.29 Savings 1,169,424 11,422 0.98 1,364,333 9,227 0.68 1,597,648 758 0.05 Time deposits 2,325,638 102,443 4.40 2,440,829 91,237 3.74 1,167,499 16,685 1.43 Total 8,633,598 242,133 2.80 8,395,051 172,018 2.05 7,593,700 31,021 0.41 FHLB advances 742,575 35,686 4.81 944,219 46,000 4.87 389,750 10,365 2.66 Securities sold under agreements to repurchase with customers 73,399 1,893 2.58 75,140 931 1.24 101,377 159 0.16 Other borrowings 484,406 28,426 5.87 307,368 19,294 6.28 203,117 12,153 5.98 Total borrowings 1,300,380 66,005 5.08 1,326,727 66,225 4.99 694,244 22,677 3.27 Total interest-bearing liabilities 9,933,978 308,138 3.10 9,721,778 238,243 2.45 8,287,944 53,698 0.65 Non-interest-bearing deposits 1,630,719 1,869,735 2,319,657 Non-interest-bearing liabilities 245,680 262,883 239,861 Total liabilities 11,810,377 11,854,396 10,847,462 Stockholders’ equity 1,685,025 1,632,633 1,542,393 Total liabilities and equity $ 13,495,402 $ 13,487,029 $ 12,389,855 Net interest income $ 334,035 $ 369,731 $ 377,477 Net interest rate spread (3) 2.13 % 2.51 % 3.20 % Net interest margin (4) 2.72 % 3.02 % 3.37 % Total cost of deposits (including non-interest-bearing deposits) 2.36 % 1.68 % 0.31 % Ratio of interest-earning assets to interest-bearing liabilities 123.61 % 126.00 % 135.00 % 47 (1) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank (“FRB”) stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
For the Year Ended December 31, 2025 2024 2023 (dollars in thousands) Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Assets: Interest-earning assets: Interest-earning deposits and short-term investments $ 100,051 $ 4,176 4.17 % $ 175,611 $ 9,381 5.34 % $ 327,539 $ 17,084 5.22 % Securities (1) 2,063,446 81,384 3.94 2,084,451 87,549 4.20 1,905,413 69,025 3.62 Loans receivable, net (2) Commercial 6,983,023 413,646 5.92 6,836,728 410,978 6.01 6,903,731 400,459 5.80 Residential real estate 3,126,076 129,193 4.13 2,998,732 117,747 3.93 2,911,246 105,796 3.63 Other consumer 220,942 14,055 6.36 243,360 16,518 6.79 255,359 15,610 6.11 Allowance for loan credit losses, net of deferred loan costs and fees (64,796) — — (59,289) — — (53,477) — — Loans receivable, net 10,265,245 556,894 5.43 10,019,531 545,243 5.44 10,016,859 521,865 5.21 Total interest-earning assets 12,428,742 642,454 5.17 12,279,593 642,173 5.23 12,249,811 607,974 4.96 Non-interest-earning assets 1,186,135 1,215,809 1,237,218 Total assets $ 13,614,877 $ 13,495,402 $ 13,487,029 Liabilities and Stockholders’ Equity: Interest-bearing liabilities: Interest-bearing checking $ 4,148,302 88,866 2.14 % $ 3,923,846 86,320 2.20 % $ 3,795,502 52,898 1.39 % Money market 1,434,355 41,077 2.86 1,214,690 41,948 3.45 794,387 18,656 2.35 Savings 1,021,341 6,631 0.65 1,169,424 11,422 0.98 1,364,333 9,227 0.68 Time deposits 2,118,145 79,606 3.76 2,325,638 102,443 4.40 2,440,829 91,237 3.74 Total 8,722,143 216,180 2.48 8,633,598 242,133 2.80 8,395,051 172,018 2.05 FHLB advances 996,798 44,997 4.51 742,575 35,686 4.81 944,219 46,000 4.87 Securities sold under agreements to repurchase with customers 62,420 1,711 2.74 73,399 1,893 2.58 75,140 931 1.24 Other borrowings 273,130 19,343 7.08 484,406 28,426 5.87 307,368 19,294 6.28 Total borrowings 1,332,348 66,051 4.96 1,300,380 66,005 5.08 1,326,727 66,225 4.99 Total interest-bearing liabilities 10,054,491 282,231 2.81 9,933,978 308,138 3.10 9,721,778 238,243 2.45 Non-interest-bearing deposits 1,678,768 1,630,719 1,869,735 Non-interest-bearing liabilities 202,101 245,680 262,883 Total liabilities 11,935,360 11,810,377 11,854,396 Stockholders’ equity 1,679,517 1,685,025 1,632,633 Total liabilities and equity $ 13,614,877 $ 13,495,402 $ 13,487,029 Net interest income $ 360,223 $ 334,035 $ 369,731 Net interest rate spread (3) 2.36 % 2.13 % 2.51 % Net interest margin (4) 2.90 % 2.72 % 3.02 % Total cost of deposits (including non-interest-bearing deposits) 2.08 % 2.36 % 1.68 % Ratio of interest-earning assets to interest-bearing liabilities 123.61 % 123.61 % 126.00 % 59 (1) Amounts represent debt and equity securities, including FHLB and FRB stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
These commitments are further discussed in Note 13 Commitments, Contingencies and Concentrations of Credit Risk, to the Consolidated Financial Statements. 51 At December 31, 2024, the Company also had various contractual obligations, which included debt obligations of $1.33 billion, including finance lease obligations of $1.4 million and an additional $17.1 million in operating lease obligations included in other liabilities, and purchase obligations of $97.2 million Refer to Note 9 Borrowed Funds and Note 17 Leases to the Consolidated Financial Statements for further discussion of debt obligations and lease obligations, respectively.
At December 31, 2025, the Company also had various contractual obligations, which included debt obligations of $1.71 billion, including finance lease obligations of $1.1 million and an additional $19.0 million in operating lease obligations included in other liabilities, and purchase obligations of $70.1 million Refer to Note 9 Borrowed Funds and Note 17 Leases to the Consolidated Financial Statements for further discussion of debt obligations and lease obligations, respectively.
Capital Management The Company actively manages its capital position to ensure adequate coverage and improve return on stockholders’ equity. The Company conducts capital stress testing, which includes evaluating the effects of various scenarios on capital, as one means of evaluating capital adequacy. The results of stress testing are considered in the capital planning process and strategy development.
The Company conducts capital stress testing, which includes evaluating the effects of various scenarios on capital, as one means of evaluating capital adequacy. The results of stress testing are considered in the capital planning process and strategy development.
Additionally, the Company continues to improve its treasury management capabilities by enhancing services through expanded product offerings and thoughtfully evaluating opportunities to further bolster talent and technology to better serve the Company’s customers.
The Company anticipates that the acquisition of these customers will continue to help drive quality funding through deeper deposit relationships. Additionally, the Company continues to improve its treasury management capabilities by enhancing services through expanded product offerings and thoughtfully evaluating opportunities to further bolster talent and technology to better serve the Company’s customers.
For example, at December 31, 2024, if the Company had elected a scenario using more favorable credit trends in the qualitative input in its commercial portfolio, the ACL measurement would have been approximately $1.9 million lower. Alternatively, if the Company had elected a more adverse scenario for its macro-economic forecasts, the ACL measurement would have been approximately $4.9 million higher.
For example, at December 31, 2025, if the Company had elected a scenario using one level more favorable credit trends in the qualitative input in its commercial portfolio, the ACL measurement would have been approximately $2.7 million lower.
The Company also analyzes the need to raise additional capital in the future, through issuance of debt or equity, to meet its commitments and business needs. Over the past five years, the Company has implemented or announced two stock 43 repurchase programs.
The Company also analyzes the need to raise additional capital in the future, through issuance of debt or equity, to meet its commitments and business needs.
The Company continues to invest in the overall customer experience with the Company’s customer satisfaction performance and digital capabilities on par with national banks and fintech companies. 42 Commercial Banking The Company continues to distinguish itself from the mega-bank competition with access to responsive, local decision-makers and from the smaller bank competition that are unable to deliver the same depth of products, services, and technology.
Commercial Banking The Company continues to distinguish itself from the mega-bank competition with access to responsive, local decision-makers and from the smaller bank competition that are unable to deliver the same depth of products, services, and technology.
The Company evaluated conditions that were unknown by the market as of the assessment date and how a market participant would evaluate an implied control premium for the Company.
The Company evaluated conditions that were unknown by the market as of the assessment date and how a market participant would evaluate an implied control premium for the Company. The implied control premium was supported using a discounted cash flow analysis that contemplated the present value of assumed market participant cost savings and synergies.
These items increased net income in the current year by $2.5 million, net of tax, and diluted earnings per share by $0.05.
These items decreased net income in the current year by $14.8 million, net of tax. The above items decreased diluted earnings per share by $0.26.
Ongoing product development and design to deepen market penetration will allow the Company to rely on competencies in commercial lending and the retail branch network to drive growth and diversification of deposits.
Ongoing product development and design to deepen market penetration will allow the Company to rely on competencies in commercial lending and the retail branch network to drive growth and diversification of deposits. The Company continues to invest in the overall customer experience with the Company’s customer satisfaction performance and digital capabilities on par with national banks and fintech companies.
The Company also generates non-interest income such as income from bankcard services, trust and fiduciary services, deposit account services, and commercial loan swap income. The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses.
The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses.
This period is intended to represent the credit profile of the current portfolio and capture prior performance in a severe economic recession. These guardrails are updated annually to capture recent behavior that is indicative of the credit profile of the current portfolio. 53 Management considers subjective, objective, and unique qualitative factors at each estimation date.
Historical losses that inform the guardrails for the qualitative adjustments are anchored to 2005 and extended annually. This period is intended to represent the credit profile of the current portfolio and capture prior performance in a severe economic recession. These guardrails are updated annually to capture recent behavior that is indicative of the credit profile of the current portfolio.
The Company has the ability to attract and retain deposits by adjusting the interest rates offered. Liquidity Used in Stock Repurchases and Cash Dividends Under the Company’s stock repurchase program, shares of OceanFirst Financial Corp. common stock may be purchased in the open market and through other privately negotiated transactions, from time-to-time, depending on market conditions.
Depending on market conditions, the Company may be required to pay higher rates on such deposits or borrowings than it currently pays. Liquidity Used in Stock Repurchases and Cash Dividends Under the Company’s stock repurchase program, shares of its common stock may be purchased in the open market and through other privately negotiated transactions, from time-to-time, depending on market conditions.
To perform the quantitative assessment, the Company engaged a third-party service provider to assist management with the determination of the fair value of the Company. The Company estimated fair value of equity using the market capitalization method of the market approach, consideration of initiatives unknown by the market and evaluation of any implied control premium.
The Company estimated the fair value of equity using the market capitalization method of the market approach, consideration of initiatives unknown by the market and evaluation of any implied control premium.
The cash was invested in debt securities, and utilized for the reduction of FHLB advances and loan originations. Off-Balance Sheet Commitments and Contractual Obligations In the normal course of business, the Bank routinely enters into various off-balance-sheet commitments, primarily relating to the origination and funding of loans.
The Company’s cash needs for the year ended December 31, 2024 were primarily satisfied by FHLB advances and principal and interest payments on loans and securities and primarily utilized for the reduction of deposits. 63 Off-Balance Sheet Commitments and Contractual Obligations In the normal course of business, the Bank routinely enters into various off-balance-sheet commitments, primarily relating to the origination and funding of loans.
The Company’s early expansion efforts were dependent on commercial real estate (“CRE”) lending; however, its path forward as a regional bank includes a transition away from CRE dependence and a focus on future growth predominately around the C&I portfolio.
The Company’s early expansion efforts were dependent on CRE lending; however, its path forward as a regional bank includes a transition away from CRE dependence and a focus on future growth predominately around the C&I portfolio. The Company has continued to make significant efforts to recruit new relationship managers that specialize in clients operating in deposit heavy industries.
These items decreased net income for the prior year by $4.7 million, net of tax. Interest Income Interest income increased to $642.2 million, from $608.0 million. The yield on average interest-earning assets increased to 5.23%, from 4.96%, due to the impact of the rate environment.
These items increased net income for the prior year by $2.5 million, net of tax. 61 Interest Income Interest income remained relatively stable at $642.5 million, from $642.2 million. The yield on average interest-earning assets decreased to 5.17%, from 5.23%, while the average balance of interest-earning assets increased by $149.1 million.
Selected Financial Data The selected consolidated financial and other data of the Company set forth below is derived in part from, and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto presented elsewhere in this Annual Report.
At December 31, 2025, the Company remains authorized to repurchase 3,226,284 shares and will prudently evaluate repurchase opportunities while maintaining existing capital levels. 55 Selected Financial Data The selected consolidated financial and other data of the Company set forth below is derived in part from, and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto presented elsewhere in this Annual Report.
These items decreased net income in the current year by $4.7 million, net of tax, and diluted earnings per share by $0.08. The Company's common equity tier 1 capital ratio increased to 11.17%.
These items increased net income in the prior year by $2.5 million, net of tax, and diluted earnings per share by $0.05. The Company's common equity tier 1 capital ratio was 10.72% at December 31, 2025.
The Company also pledged $1.07 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law. The Company had $1.07 billion of FHLB advances as compared to $848.6 million at December 31, 2023. The Company had no outstanding overnight borrowings from the FHLB as of December 31, 2024 and 2023.
The Company also pledged $1.45 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law.
The Company has an internal policy that addresses liquidity, and management monitors the adherence to policy limits to satisfy current and future cash flow needs.
The Company has an internal policy that addresses liquidity, and management monitors the adherence to policy limits to satisfy current and future cash flow needs. The policy includes internal limits, monitoring of key indicators, deposit concentrations, liquidity sources and availability, stress testing, collateral management, and other qualitative and quantitative metrics.
Operating expenses for the year ended December 31, 2024 were adversely impacted by $1.8 million for merger related expenses and $418,000 for FDIC special assessment in the current year. The prior year was adversely impacted by an FDIC special assessment of $1.7 million, and $92,000 for merger related and net branch consolidation expenses in the prior year.
The prior year was adversely impacted by $1.8 million of merger related expenses and $418,000 of FDIC special assessment fees.
On June 25, 2021, the Company announced the authorization to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. For the year ended December 31, 2024, the Company repurchased 1,383,238 shares of its common stock under this repurchase program to strategically build capital.
On June 25, 2021, the Company announced the authorization to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. On July 16, 2025, the Company announced its Board authorized a 2025 Stock Repurchase Program to repurchase up to an additional 3.0 million shares.
Performance ratios for 2023 included a net expense related to merger related expenses, net branch consolidation expense, FDIC special assessment, net loss on sale of investments and net gain on equity investments of $6.2 million, or $4.7 million, net of tax benefit.
(2) Performance ratios for 2025 included a net expense related to net gain on equity investments, restructuring charges, loss on redemption of preferred stock, credit risk transfer execution expense, FDIC special assessment release and merger related expenses of $15.9 million, or $12.9 million, net of tax benefit.
Year Ended December 31, 2024 Year Ended December 31, 2023 Compared to Compared to Year Ended December 31, 2023 Year Ended December 31, 2022 Increase (Decrease) Due to Increase (Decrease) Due to (in thousands) Volume Rate Net Volume Rate Net Interest-earning assets: Interest-earning deposits and short-term investments $ (8,106) $ 403 $ (7,703) $ 9,408 $ 6,570 $ 15,978 Securities (1) 6,869 11,655 18,524 2,640 26,702 29,342 Loans receivable, net (2) Commercial (3,916) 14,435 10,519 24,706 88,709 113,415 Residential real estate 3,249 8,702 11,951 6,506 7,858 14,364 Other consumer (758) 1,666 908 (72) 3,772 3,700 Loans receivable, net (2) (1,425) 24,803 23,378 31,140 100,339 131,479 Total interest-earning assets (2,662) 36,861 34,199 43,188 133,611 176,799 Interest-bearing liabilities: Interest-bearing checking 1,846 31,576 33,422 (797) 42,351 41,554 Money market 12,329 10,963 23,292 90 16,332 16,422 Savings (1,461) 3,656 2,195 (127) 8,596 8,469 Time deposits (4,466) 15,672 11,206 30,045 44,507 74,552 Total 8,248 61,867 70,115 29,211 111,786 140,997 FHLB advances (9,698) (616) (10,314) 22,486 13,149 35,635 Securities sold under agreements to repurchase with customers (22) 984 962 (51) 823 772 Other borrowings 10,462 (1,330) 9,132 6,517 624 7,141 Total borrowings 742 (962) (220) 28,952 14,596 43,548 Total interest-bearing liabilities 8,990 60,905 69,895 58,163 126,382 184,545 Net change in net interest income $ (11,652) $ (24,044) $ (35,696) $ (14,975) $ 7,229 $ (7,746) (1) Amounts represent debt and equity securities, including FHLB and FRB stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
Year Ended December 31, 2025 Year Ended December 31, 2024 Compared to Compared to Year Ended December 31, 2024 Year Ended December 31, 2023 Increase (Decrease) Due to Increase (Decrease) Due to (in thousands) Volume Rate Net Volume Rate Net Interest-earning assets: Interest-earning deposits and short-term investments $ (3,451) $ (1,754) $ (5,205) $ (8,106) $ 403 $ (7,703) Securities (1) (875) (5,290) (6,165) 6,869 11,655 18,524 Loans receivable, net (2) Commercial 8,718 (6,050) 2,668 (3,916) 14,435 10,519 Residential real estate 5,118 6,328 11,446 3,249 8,702 11,951 Other consumer (1,465) (998) (2,463) (758) 1,666 908 Loans receivable, net (2) 12,371 (720) 11,651 (1,425) 24,803 23,378 Total interest-earning assets 8,045 (7,764) 281 (2,662) 36,861 34,199 Interest-bearing liabilities: Interest-bearing checking 4,849 (2,303) 2,546 1,846 31,576 33,422 Money market 6,920 (7,791) (871) 12,329 10,963 23,292 Savings (1,313) (3,478) (4,791) (1,461) 3,656 2,195 Time deposits (8,633) (14,204) (22,837) (4,466) 15,672 11,206 Total 1,823 (27,776) (25,953) 8,248 61,867 70,115 FHLB advances 11,588 (2,277) 9,311 (9,698) (616) (10,314) Securities sold under agreements to repurchase with customers (296) 114 (182) (22) 984 962 Other borrowings (14,138) 5,055 (9,083) 10,462 (1,330) 9,132 Total borrowings (2,846) 2,892 46 742 (962) (220) Total interest-bearing liabilities (1,023) (24,884) (25,907) 8,990 60,905 69,895 Net change in net interest income $ 9,068 $ 17,120 $ 26,188 $ (11,652) $ (24,044) $ (35,696) (1) Amounts represent debt and equity securities, including FHLB and FRB stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
The Bank and the Parent Company also have detailed contingency capital plans and obtain comprehensive reporting of capital trends on a regular basis, which are reviewed by management and the Board. The Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action Regulations. See Regulation and Supervision—Bank Regulation – Capital Requirements .
As of December 31, 2025, the Bank and Company continued to maintain adequate capital under all stress scenarios. The Bank and the Parent Company also have detailed contingency capital plans and obtain comprehensive reporting of capital trends on a regular basis, which are reviewed by management and the Board.
At December 31, 2024, the Parent Company held $111.5 million in cash and cash equivalents. The Bank’s primary sources of funds are deposits, principal and interest payments on loans and investments, FHLB advances, and other borrowings .
The Bank’s primary sources of funds are deposits, principal and interest payments on loans and investments, FHLB advances, other borrowings and proceeds from the sale of loans and investments .
The Company had 1,551,200 shares available for repurchase under the authorized repurchase program at December 31, 2024. Additionally, accumulated other comprehensive loss decreased by $5.0 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.
Additionally, accumulated other comprehensive loss decreased by $13.7 million primarily due to increases in the fair market value of available-for-sale debt securities, net of tax. Noncontrolling interest decreased by $1.1 million due to the disposition of the title business.
The Company considers qualitative adjustments to expected credit loss estimates for information not already captured in the loss estimation process. Qualitative loss factors are grounded in the Company’s long-term credit losses and reflect an assumption that past behavior is a reasonable predictor of future performance.
Qualitative loss factors are grounded in the Company’s long-term credit losses and reflect an assumption that past behavior is a reasonable predictor of future performance. The Company considers the peak two-year net charge off rate to capture maximum potential volatility over the reasonable and supportable forecast period.
As of the annual impairment testing date of August 31, 2024, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test based on the stock price of the Company on the measurement date and economic uncertainty.
For the annual test, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test based on the stock price of the Company on the measurement date and economic uncertainty. To perform the quantitative assessment, the Company engaged a third-party service provider to assist management with the determination of the fair value of the Company.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company performs a variety of EVE and twelve-month net interest income sensitivity scenarios. At both December 31, 2024 and 2023, the Company was in compliance with Board guidelines for each scenario. The following table sets forth sensitivity for a specific range of interest rate scenarios as of December 31, 2024 and 2023.
Biggest changeThe Company’s weighted average age of non-maturity deposit accounts was approximately 15.5 years, and the weighted average cost was 1.52%. 68 The Company performs a variety of EVE and twelve-month net interest income sensitivity scenarios. At both December 31, 2025 and 2024, the Company was in compliance with Board guidelines for each scenario.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Management of Interest Rate Risk (“IRR”) Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the IRR inherent in its lending, investment, deposit-taking, and funding activities. The Company’s profitability is affected by fluctuations in interest rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Management of IRR Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the IRR inherent in its lending, investment, deposit-taking, and funding activities. The Company’s profitability is affected by fluctuations in interest rates.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” Interest rate sensitivity is monitored through the use of an IRR model, which measures the change in the institution’s economic value of equity (“EVE”) and net interest income under various interest rate scenarios.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” Interest rate sensitivity is monitored through the use of an IRR model, which measures the change in the institution’s EVE and net interest income under various interest rate scenarios.
December 31, 2024 December 31, 2023 Change in Interest Rates in Basis Points Economic Value of Equity Net Interest Income Economic Value of Equity Net Interest Income (Rate Shock) % Change % Change % Change % Change 300 (6.2) % (0.8) % (12.8) % (2.2) % 200 (3.6) 0.1 (9.1) (1.3) 100 (1.5) 0.4 (5.2) (0.4) Static — — — — (100) 1.5 (0.5) 7.0 (0.5) (200) 1.8 (1.3) 8.8 (1.9) (300) (0.6) (2.6) 6.8 (4.2) The net interest income sensitivity results at December 31, 2024 was modestly asset sensitive to neutral as compared to the prior year.
December 31, 2025 December 31, 2024 Change in Interest Rates in Basis Points Economic Value of Equity Net Interest Income Economic Value of Equity Net Interest Income (Rate Shock) % Change % Change % Change % Change 300 (6.6) % (2.5) % (6.2) % (0.8) % 200 (4.0) (1.4) (3.6) 0.1 100 (1.7) (0.6) (1.5) 0.4 Static — — — — (100) 1.4 1.2 1.5 (0.5) (200) 0.5 2.2 1.8 (1.3) (300) (4.3) 3.0 (0.6) (2.6) The net interest income sensitivity results at December 31, 2025 was modestly liability sensitive as compared to the prior year.
ALCO meets regularly and reports the Company’s IRR position and trends to the Board on a regular basis. 56 The Company utilizes a number of strategies to manage IRR including, but not limited to: (1) managing the origination, purchase, sale, and retention of various types of loans with differing IRR profiles; (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing stable relationship-based deposits and longer-term deposits; (3) selectively purchasing interest rate swaps and caps converting the rates for customer loans to manage individual loans and the Bank’s overall IRR profile; (4) managing the investment portfolio IRR profile; (5) managing the maturities and rate structures of borrowings and time deposits; and (6) purchasing interest rate swaps to manage overall balance sheet interest rate risk.
The Company utilizes a number of strategies to manage IRR including, but not limited to: (1) managing the origination, purchase, sale, and retention of various types of loans with differing IRR profiles; (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing stable relationship-based deposits and longer-term deposits; (3) selectively purchasing interest rate swaps and caps converting the rates for customer loans to manage individual loans and the Company’s overall IRR profile; (4) managing the investment portfolio IRR profile; (5) managing the maturities and rate structures of borrowings and time deposits; and (6) purchasing interest rate swaps to manage overall balance sheet interest rate risk.
Third, the model does not take into account the Company’s business or strategic plans or any steps it may take to respond to changes in rates. Fourth, prepayment, rate sensitivity, and average life assumptions can have a significant impact on the IRR model results.
Third, the model does not take into account the Company’s business or strategic plans or any steps it may take to respond to changes in rates. Fourth, prepayment, rate sensitivity, and average life assumptions can have a significant impact on the IRR model results. Lastly, the model utilizes data derived from historical performance.
Lastly, the model utilizes data derived from historical performance. 57 Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates.
Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates. 69
However, for non-maturity deposits, the fair value differs for EVE as it also considers the likelihood of deposit and withdrawals and current weighted average rate relative to market rates. The Company’s weighted average age of non-maturity deposit accounts is approximately 11 years, and the weighted average cost is 1.64%.
However, for non-maturity deposits, the fair value differs for EVE as it also considers the likelihood of deposit withdrawals and the current weighted average deposit rate relative to market rates.
The change in sensitivity from prior year was impacted by an increase in floating-rate securities and term borrowings, a deposit mix shift within non-maturity deposits with lower betas as well as a change in loan prepayments, partially offset by an increase in overnight borrowings and a reduction in short-term time deposits.
The change in sensitivity from prior year was impacted by an increase in fixed rate loans, an increase in short-term time deposits and overnight borrowings and non-maturity deposit growth with higher betas, partially offset by an increase in floating rate loans and securities.
The Company’s Board maintains an Asset Liability Committee (“ALCO”) consisting of members of management, responsible for reviewing asset liability policies and the IRR position.
The Company maintains an ALCO consisting of members of management, responsible for reviewing asset liability policies and the IRR position. ALCO meets regularly and reports the Company’s IRR position and trends to the Board on a regular basis.
Overall, the measure of EVE at risk decreased in all rate scenarios from December 31, 2023 to December 31, 2024. This decrease was the result of an increase in floating-rate securities and term borrowings, a deposit mix shift within non-maturity deposits with lower betas and longer average lives, as well as a change in loan prepayments.
Overall, the measure of EVE at risk slightly increased in all rate scenarios from December 31, 2024 to December 31, 2025. This increase was the result of an increase in fixed rate loans, short-term time deposits and overnight borrowings and higher beta non-maturity deposits, offset by an increase in floating rate loans and securities.
Removed
Given the unique nature of the post-pandemic interest rate environment and the speed with which interest rates have been changing, the projections noted above on the Company’s EVE and net interest income can be expected to significantly differ from actual results. 58
Added
The following table sets forth sensitivity for a specific range of interest rate scenarios as of December 31, 2025 and 2024.

Other OCFC 10-K year-over-year comparisons