What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-23 · 227 added, 194 removed, 633 unchanged (40% of the section changed)

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The Company is subject to regulation by the Board of Governors of the Federal Reserve System (the “FRB”) and the Securities and Exchange Commission (the “SEC”).

The Bank is primarily subject to regulation and supervision by the Office of the Comptroller of the Currency (the “OCC”) and the Consumer Financial Protection Bureau (the “CFPB”).

Currently, the Company transacts the vast majority of its business through the Bank, its subsidiary.

The Company has been the holding company for the Bank since the Company’s initial public offering.

Effective January 31, 2018, the Bank converted to a national bank charter and the Company became a bank holding company.

The Bank is primarily subject to regulation and supervision by the Office of the Comptroller of the Currency (the “OCC”), as well as the Consumer Financial Protection Bureau (the “CFPB”) due to the Bank having in excess of $10 billion in assets.

The Bank is also subject to regulation and supervision by the Federal Deposit Insurance Corporation (the “FDIC”), as the deposit insurer.

Currently, the Company transacts the vast majority of its business through the Bank, its wholly owned subsidiary.

The Bank’s principal business is originating loans, consisting of commercial real estate and other commercial loans, which have become a key focus of the Bank, and single-family, owner-occupied residential mortgage loans.

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The Bank’s revenues are derived principally from interest on its loans, and to a lesser extent, interest on its debt and equity securities.

The Bank also receives income from other products and services it offers including bankcard services, trust and asset management products and services, deposit account services, and commercial loan swap income.

The Bank also receives income from other products and services it offers including bankcard services, trust and fiduciary services, deposit account services, mortgage banking activity, and commercial loan swap income.

The Bank’s primary sources of funds are deposits, principal and interest payments on loans and investments, Federal Home Loan Bank (“FHLB”) advances, and other borrowings.

While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment sales are greatly influenced by changes in market interest rates, competition, general economic conditions, including levels of unemployment and real estate values, and inflation.

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 .

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Forward-Looking Statements

In addition to historical information, this Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company.

In addition to historical information, this Form 10-K may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company.

These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence.

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Risk Factors herein and the following:

changes in interest rates, inflation, general economic conditions, potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S.

changes in interest rates and inflation that reduce our margins and yields, the fair value of financial instruments, the level of loan originations or prepayments on loans we have made and make, the level of loan sales and the cost we pay to retain and attract deposits and secure other types of funding;

general economic conditions, including potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S.

Government including policies of the U.S.

Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, changes in liquidity, including the size and composition of the Company’s deposit portfolio, including the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the effect of the Company’s rating under the Community Reinvestment Act, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations.

Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio, and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, our ability to enter new markets successfully and capitalize on growth opportunities;

our ability to

successfully expand our franchise, including acquisitions or establishing new offices at favorable prices;

our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we have acquired or may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto, competition, demand for loans and financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

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Market Area and Competition

The Bank is a regional community bank offering a wide variety of financial accounts and services to meet the needs of customers in the communities it serves.

At December 31, 2023, the Bank primarily operated its business through its headquarters located in Toms River, New Jersey, and its administrative office located in Red Bank, New Jersey.

The Bank also conducts its business at 39 branch offices and various deposit production facilities located throughout central and southern New Jersey and the greater 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, Baltimore, and Boston.

The Bank is a regional community bank offering a wide variety of financial products and services to meet the needs of customers in the communities it serves.

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.

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.

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The area is home to commuters working in and around New York City and Philadelphia and also includes a significant number of vacation and second homes in the communities along the New Jersey shore.

In addition, the Bank provides banking services through teams located in the major metropolitan markets of Philadelphia, New York, Baltimore, and Boston.

In addition, the Bank provides banking services through teams located in the major metropolitan markets between Massachusetts and Virginia.

The Bank’s future growth opportunities will be influenced by the growth and stability of its geographic marketplace and the competitive environment.

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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.

The state of New Jersey, New York City, Philadelphia, Baltimore, and Boston are also attractive markets to many financial institu tions.

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.

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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.

In 2023, the WaveMakers spent nearly 7,000 hours volunteering their time and talents to help neighbors in need and the second annual Bank-wide volunteering event was held in September 2023 with more than 730 employees completing 95 projects for non-profit organization partners in the five states served by the Bank.

In 2024, the WaveMakers spent nearly 6,000 hours volunteering their time and talents to help neighbors in need and the second annual Bank-wide volunteering event was held in September 2024 with more than 700 employees completing over 70 projects for non-profit organization partners in the five states served by the Bank.

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.

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Loan Portfolio Composition .

At December 31, 2023, the Bank had total loans outstanding of $10.20 billion, of which $6.30 billion, or 61.8% of total loans, were commercial real estate, multi-family, and land loans (collectively, “commercial real estate”).

The remainder of the portfolio consisted of $666.5 million of commercial and industrial loans, or 6.5% of total loans;

At December 31, 2024, the Bank had total loans outstanding of $10.14 billion, of which $5.29 billion, or 52.2% of total loans, were investor owned commercial real estate, multi-family, construction (including residential development loans), (collectively, “commercial real estate - investor”).

The remainder of the portfolio consisted of $902.2 million of commercial real estate - owner occupied, or 8.9% of total loans;

$647.9 million of commercial and industrial loans, or 6.4% of total loans;

$3.07 billion of residential real estate loans, or 30.3% of total loans;

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(dollars in thousands)

Commercial real estate $ 6,297,865 61.75 % $ 6,169,319 62.20 % $ 5,433,126 63.01 %

Commercial real estate - investor $ 5,287,683 52.2 % $ 5,353,974 52.5 % $ 5,171,952 52.1 %

Commercial real estate - owner occupied 902,219 8.9 943,891 9.3 997,367 10.1

Commercial and industrial 647,945 6.4 666,532 6.5 622,372 6.3

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At December 31, 2024

Commercial Real Estate Commercial

Commercial Real Estate - Investor Commercial Real Estate - Owner Occupied Commercial

Industrial Residential

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(in thousands)

Commercial real estate $ 2,409,071 $ 3,191,387 $ 5,600,458

Commercial real estate - investor $ 1,755,785 $ 2,309,336 $ 4,065,121

Commercial real estate - owner occupied 370,304 447,356 817,660

Commercial and industrial 250,581 261,782 512,363

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Total loans receivable $ 5,250,784 $ 3,417,395 $ 8,668,179

Commercial Real Estate .

At December 31, 2023, the Bank’s total commercial real estate loans outstanding were $6.30 billion, or 62% of total loans, as compared to $6.17 billion, or 62% of total loans at December 31, 2022.

Th e Bank originates commercial real estate loans that are secured by properties, or properties under construction, that are generally used for busin ess purposes such as office, industrial, multi-family or retail facilities.

Commercial real estate loans are provided on owner-occupied properties and on investor-owned properties.

Of the total commercial real estate portfolio, $5.35 billion or 85.0% is considered investor-owned and $943.9 million or 15.0% is considered owner-occupied.

A substantial majority of the Bank’s commercial real estate loans are located in its primary market area.

The following tables present total commercial real estate loans by industry and geography (generally based on location of collateral) as of December 31, 2023:

Investor Owned Owner Occupied Total

(dollars in thousands) Amount Percent of Total Amount Percent of Total Amount Percent of Total

Commercial Real Estate - Investor Owned .

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.

Th e Bank originates investor owned commercial real estate loans that are secured by properties, or properties under construction, that are generally used for busin ess purposes such as office, industrial, multi-family, or retail facilities.

A substantial majority of the Bank’s investor owned commercial real estate loans are located in its primary market area.

The following tables present total commercial real estate - investor loans by industry and geography (generally based on location of collateral) as of December 31, 2024:

Investor Owned

(dollars in thousands) Amount Percent of Total

Office $ 1,056,252 23 %

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Hospitality 176,894 4

758,617 16 430,462 46 1,189,079 21

Total $ 4,538,577 100 %

Construction 749,106

Total commercial real estate $ 5,353,974 $ 6,297,865

(1) Includes co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.

Investor Owned Owner Occupied Total

(dollars in thousands) Amount Percent of Total Amount Percent of Total Amount Percent of Total

Total CRE investor owned and construction $ 5,287,683

(1) Includes underlying co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.

Investor Owned

(dollars in thousands) Amount Percent of Total

New Jersey $ 1,170,596 26 %

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Construction 749,106

Total commercial real estate $ 5,353,974 $ 6,297,865

The Bank originates commercial real estate loans with adjustable rates and with fixed interest rates for a period that generally does not exceed ten years, and generally have an amortization schedule up to 25 years and up to 30 years for multi-family properties.

Total CRE investor owned and construction $ 5,287,683

The Bank originates investor owned commercial real estate loans with adjustable rates and with fixed interest rates for a period that generally does not exceed ten years, and generally have an amortization schedule up to 25 years and up to 30 years for multi-family properties.

As a result, the typical amortization schedule will result in a substantial principal payment upon maturity.

The Bank generally underwrites investor commercial real estate loans to a maximum of 65% to 80% advance, and owner occupied real estate loans to a maximum of 70% 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 requires minimum debt service coverage of 1.20x to 1.50x for investor real estate and 1.25x to 1.40x for owner occupied real estate, depending on the asset class.

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 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 typically lends in its primary markets to experienced owners or developers who have knowledge and expertise in the commercial real estate market.

The Bank performs extensive due diligence in underwriting commercial real estate loans due to the larger loan amounts and the riskier nature of such loans.

The Bank performs extensive due diligence in underwriting investor owned commercial real estate loans due to the larger loan amounts and the riskier nature of such loans.

The Bank assesses and mitigates the risk in several ways, including inspection of all such properties and the review of the overall financial condition of the borrower and guarantors, which include, for example, the review of the rent rolls and applicable leases/lease terms and conditions and the verification of income.

A tenant analysis and market analysis are part of the underwriting.

Financial statements are also required annually for review.

With respect to investor commercial real estate loans, rent rolls are also required annually in addition to financial statements.

Generally, commercial real estate loans are supported by full or partial personal guarantees by the principals.

Generally, for commercial real estate loans secured in excess of $750,000 and for all other commercial real estate loans where it is deemed appropriate, 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.

Depending on the size of the relationship, financial statements are also required annually for review.

For investor owned commercial real estate loans, rent rolls are also required annually in addition to financial statements.

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.

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 uses an independent third party to review all applicable property appraisals to ensure compliance with regulations.

The Bank also originates multi-family family mortgage loans and, to a lesser extent, land loans The underwriting standards and procedures that are used to underwrite 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 has an amortization period of up to 30 years may be used.

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 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.

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.

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As of December 31, 2024, these back-to-back swaps had a notional amount of $1.47 billion.

The commercial real estate portfolio also includes loans for the construction of commercial properties.

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 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 Bank requires a higher projected debt-service coverage on construction loans (for projects that end up being income producing) and underwrites accordingly.

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 Bank may commit to provide permanent mortgage financing on its construction loans on income-producing property.

Construction loans may have greater credit risk due to the dependence on completion of construction and other real estate improvements, as well as the sale or rental of the improved property.

The Bank generally mitigates these risks with (i) requiring an independent appraisal, which includes information on market rents and/or comparable sales for competing projects;

(ii) advances on construction loans are made in accordance with a schedule reflecting the cost of the improvements and performing site inspections to determine if the work has been completed prior to the advance of funds for the project;

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).

During the construction phase, a number of factors can result in delays and cost overruns.

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 generally mitigates these risks by (i) requiring an independent appraisal, which includes information on market rents and/or comparable sales for competing projects;

(ii) making advances on construction loans in accordance with a schedule reflecting the cost of the improvements and performing site inspections to determine if the work has been completed prior to the advancement of funds for the project;

and (iii) pre-sale or pre-leasing requirements and phasing of construction.

Commercial real estate loans are among the largest of the Bank’s loans, and may have higher credit risk and lending spreads.

For investor-owned properties, because repayment is often dependent on the successful management of the properties, repayment of commercial real estate loans may be affected by adverse conditions in the real estate market or the economy, the Bank is particularly vigilant of this portfolio.

Investor owned commercial real estate loans are among the largest of the Bank’s loans and may have higher credit risk and lending spreads.

Because repayment is often dependent on the successful management of the properties, repayment of commercial real estate loans may be affected by adverse conditions in the real estate market or the economy, as a result, the Bank is particularly vigilant of this portfolio.

The Bank believes this portfolio is highly diversified with loans secured by a variety of property types and the portfolio exhibits stable credit quality.

Commercial real estate - investor-owned portfolio composition as of December 31, 2023 is as follows:

The commercial real estate - investor-owned portfolio composition as of December 31, 2024 is as follows:

At December 31, 2024

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Credit Tenant (3)

259,019 6 65 1.5

Total Office (4)

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(2) Represents the weighted average of net operating income on the property before debt service divided by the loan’s respective annual debt service based on the most recent credit review of the borrower.

(3) Central business district (“CBD”) exposure represents $123 million, or 11.3%, of the total office loan balanc e.

Office CBD loans had a weighted average LTV of 66% and weighted average debt service coverage ratio of 1.7x.

$82 million, or 75%, of the total office CBD exposure are to credit tenants, life sciences and medical borrowers.

New York City office CBD loans represent 0.12% of the Company’s total assets.

(4) New York City rent-regulated multi-family loans, where the property has more than 50% of its units rent-regulated, represent 0.27% of the Company’s total assets.

(5) Other includes co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.

During 2023 a repricing analysis was performed on the vast majority of the commercial real estate – investor owned and construction portfolio, stressing interest rates at 7% while keeping underwritten rents constant, and the results indicated the portfolio continues to service debt without unusual stress at a weighted average of 1.21x.

Commercial and Industrial .

At December 31, 2023, commercial and industrial (“C&I”) loans totale d $666.5 million, or 6.5% of the Bank’s total loans outstanding.

The Bank originates C&I loans and lines of credit (including for working capital, fixed asset purchases, and acquisition, receivable, and inventory financing) primarily in the Bank’s market are a.

(3) Represents tenants which were awarded an investment grade rating based on size and financial strength.

Investment grade is defined as a credit rating of BBB- or higher by Standard & Poor’s or Baa3 or higher by Moody’s.

(4) Central business district (“CBD”) exposure represented $118 million, or 11.2%, of the total office loan balance at December 31, 2024.

Office CBD loans had a weighted average LTV of 54% and weighted average debt service coverage ratio of 1.9x at December 31, 2024.

$85 million, or 72%, of the total office CBD exposure are to credit tenants, life sciences and medical borrowers 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, 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.

(6) Other includes underlying co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.

Commercial and Industrial (“C&I”) and Commercial Real Estate - Owner Occupied .

At December 31, 2024, C&I loans totaled $647.9 million, or 6.4% of the Bank’s total loans outstanding, compared to $666.5 million, or 6.5% of total loans at December 31, 2023.

The Bank originates C&I loans and lines of credit (including for working capital, fixed asset purchases, and acquisition, receivable, and inventory financing) primarily in the Bank’s market area.

In certain instances, the Bank also purchases commercial and industrial loans through existing third-party channels.

In underwriting C&I loans and credit lines, the Bank reviews and analyzes the financial history and capacity of the borrower, collateral value, financial strength and character of the principal borrowers, and general payment history of the principal borrowers in coming to a credit decision.

The Bank generally originates C&I loans secured by the assets of the business including accounts receivable, inventory, and fixtures.

The Bank generally originates C&I loans secured by the assets of the business including accounts receivable, inventory, equipment, and fixtures.

The Bank generally requires the personal guarantee of the principal borrowers for all C&I loans.

Risk of loss on a C&I business loan is dependent largely on the borrower’s ability to remain financially able to repay the loan from the ongoing operations of the business.

The risk of loss on a C&I business loan is dependent largely on the borrower’s ability to repay the loan from the ongoing operations of the business.

In addition, any collateral securing such loans may depreciate over time, may be difficult to appraise, and may fluctuate in value.

Typically, financial covenants are included in the loan structure which may include balance sheet leverage, cash flow leverage, liquidity requirements;

debt service coverage, and/ or fixed charge coverage.

Requirements may differ based on loan size, industry, facility types, capital stack, and years in business.

As of December 31, 2024, commercial real estate - owner occupied loans totaled $902.2 million or 8.9% of the total loans, as compared to $943.9 million, or 9.3% of total loans at December 31, 2023.

A substantial majority of the Bank’s owner occupied commercial real estate loans are located in its primary market area.

The following tables present total commercial real estate - owner occupied loans by industry and geography (based on location of collateral) as of December 31, 2024:

Owner Occupied

(dollars in thousands) Amount Percent of Total

Office $ 130,282 14 %

Retail 139,541 15

Industrial/warehouse 227,418 25

Hospitality 60,398 7

Total $ 902,219 100 %

(1) Includes underlying single purpose, mixed use, and other.

Owner Occupied

(dollars in thousands) Amount Percent of Total

New Jersey $ 412,924 46 %

New York 135,401 15

Pennsylvania and Delaware 236,432 26

Other 117,462 13

Total $ 902,219 100 %

An owner occupied property is defined as real estate used by a business for its operations.

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.

Given that the repayment is generally dependent on the ongoing operations of the underlying business with similar risk of a C&I loan, the Bank reviews and analyzes the financial history and capacity of the operating business in addition to the real estate collateral value.

The bank generally requires the corporate guarantee of the operating business, if not a direct borrower.

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 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.

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.

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.

Generally, depending on the size of the loan and relationship, financial statements are also required annually for review of C&I and owner occupied commercial real estate loans.

Residential Real Estate .

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The majority of such loans are secured by property located in the Bank’s primary market area.

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, and the Bank’s existing or past customers.

Additionally, for the year ended December 31, 2023, the Bank purchased $31.9 million of residential real estate loan pools originated by others, related to Community Reinvestment Act (“CRA”) initiatives.

At December 31, 2024, $3.07 billion, or 30.3% of total loans, were residential real estate loans, primarily single family and owner occupied.

To a lesser extent, and included in this activity, are residential mortgage loans secured by seasonal second homes, non-owner occupied investment properties and construction loans.

The average size of the Bank’s residential real estate loans, excluding purchased loan pools, was approximately $324,000 at December 31, 2023.

The average size of the Bank’s residential real estate loans was approximately $350,000 at December 31, 2024.

The Bank currently offers several ARM loan programs with interest rates that adjust between annually to ten years, as well as loans that operate as fixed-rate loans at their onset and later convert to an ARM for the remainder of the term.

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 margin.

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.

Adjustments are generally based on a margin between 2.75% and 3.25%.

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.

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The Bank’s fixed-rate mortgage loans are currently made for terms from ten to 30 years.

The Bank either holds its residential loans for its portfolio or sells a portion of its fixed-rate and SOFR ARM loans to either government sponsored enterprises, FHLB, Freddie Mac or Fannie Mae, or to a third party aggregator.

During 2023, the Company sold $58.1 million of loans.

In certain instances, servicing rights are required to be retained, otherwise servicing rights may be sold as part of the loan sale.

The retention of fixed-rate mortgage loans may increase the level of interest rate risk exposure of the Bank, as the rates on these

loans will not adjust during periods of rising interest rates and the loans can be subject to substantial increases in prepayments during periods of falling interest rates.

The Bank either holds its residential loans for its portfolio or sells a portion of its loans to either government sponsored enterprises such as the FHLB, Freddie Mac or Fannie Mae, or to a third party aggregator.

During 2024, the Company sold $267.8 million of loans with a related gain on

sale of loans for $2.4 million for the year ended December 31, 2024.

The talent acquisition of Garden State Home Loans, Inc.

during 2024, enhanced the Company’s mortgage loan sale activity.

In certain loan sales, the Company will retain servicing rights, otherwise servicing rights may be sold as part of the loan sale.

The retention of fixed-rate mortgage loans may increase the level of interest rate risk exposure of the Bank, as the rates on these loans will not adjust during periods of rising interest rates and the loans can be subject to substantial increases in prepayments during periods of falling interest rates.

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.

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 purchased loan pools, was 59% at December 31, 2023 based on appraisal values at the time of origination.

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.

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Construction lending, by its nature, entails additional risks compared to residential real estate lending, attributable primarily to the fact that funds are advanced based upon a security interest in a project which is not yet complete.

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.

The 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.

During the construction phase, a number of factors can result in delays and cost overruns.

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The Bank addresses these risks through its underwriting policies and procedures and its experienced staff.

Other Consumer:

Home Equity Lines and Loans, Student Loans and Other Consumer .

At December 31, 2023, th e Bank’s other consumer loans totaled $250.7 million, or 2.5% of the Bank’s total loan portfolio.

Home Equity Loans and Lines, Student Loans and Other Consumer .

At December 31, 2024, th e Bank’s consumer loans totaled $230.5 million, or 2.3% of the Bank’s total loan portfolio.

Of the total consumer loan portfolio, home equity loans comprised $106.5 million;

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The Bank charges an early termination fee should a home equity loan or line of credit be closed within two or three years of origination.

A borrower is required to make monthly payments of principal and interest, at a minimum of $50, based upon a 10-, 15- or 20-year amortization period.

A borrower is required to make minimum monthly payments of principal and interest, based upon a 10-, 15- or 20-year amortization period.

Certain home equity lines of credit require the payment of interest-only during the first five years with fully-amortizing payments thereafter.

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The loans have an 18% lifetime cap on interest rate adjustments.

Other consumer loans may entail greater risk than residential real estate loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly.

Consumer loans may entail greater risk than residential real estate loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly.

Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower.

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Furthermore, the application of various federal and state laws, including federal and state bankruptcy, and insolvency laws may limit the amount that can be recovered on such loans.

Beginning in 2022, the Bank began originating lines of credit that are fully secured by the cash surrender value of whole life insurance policies.

Underlying insurance companies must have a Moody’s rating of A1 or higher and/or an S&P Rating of A or higher.

These lines are originated based on the value of the collateral and secured by an assignment of the whole life policy.

Borrowers are subject to minimum credit scores and maximum debt to income ratios, but the guidelines are less stringent than a mortgage or home equity loan/line as the line is fully secured by the underlying insurance policy.

Interest rates charged are set at the time of origination and payments are interest-only based on the amount of the outstanding balance.

Loan to values are limited to 95% of the cash surrender value of the whole life policy.

Each line matures in 36 months and is subject to renewal at current rates and terms.

At December 31, 2023, these loans totaled $31.1 million.

Loan Approval Procedures and Authority .

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Pursuant to applicable regulations, loans to one borrower generally cannot exceed 15% of the Bank’s unimpaired capital.

Due to the Bank’s past acquisitions, significant portions of the acquired loan portfolios were underwritten according to the underwriting standards and guidelines of the acquired banks.

Acquired loans are evaluated under OceanFirst’s credit risk management policies during pre-closing due diligence and during post-closing risk rating reviews.

In addition to internal credit reviews, the Bank has engaged an independent firm specializing in commercial loan reviews to examine a selection of commercial real estate and commercial and industrial loans, and provide management with objective analysis regarding the quality of these loans throughout the year.

The independent firm reviewed over 60% of the outstanding loan balances for the Bank’s commercial real estate and commercial and industrial loans during 2023.

In addition to internal credit reviews, the Bank has engaged independent firms specializing in commercial loan reviews to examine a selection of commercial real estate and commercial and industrial loans and provide management with objective analysis regarding the quality of these loans throughout the year.

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.

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The Bank also services mortgage loans for others.

All of the loans currently being serviced for others are loans which were originated by the Bank.

Generally, loans currently being serviced for others are loans which were originated by the Bank.

At December 31, 2024, the Bank was servicing $191.3 million of loans for others.

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The steps taken by the Bank with respect to delinquencies vary depending on the nature of the loan and period of delinquency.

When a borrower fails to make a required payment on a loan, the Bank takes a number of steps to have the borrower cure the delinquency and restore the loan to current status.

When a borrower fails to make the required payment on a loan, the Bank takes a number of steps to have the borrower cure the delinquency and restore the loan to current status.

The Bank sends the borrower a written notice of non-payment after the loan is first past due.

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If a foreclosure action is instituted and the loan is not brought current, paid in full, or an acceptable workout accommodation is not agreed upon before the foreclosure sale, the real property securing the loan generally is sold at foreclosure.

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 (“ACL Policy”), which considers certain regulatory guidelines and definitions.

As part of this ACL Policy, the Special Asset Group reviews and confirms the criticized and classified commercial loans report on a monthly basis.

At December 31, 2023 and 2022, the Bank had $106.6 million and $50.8 million of assets classified as Substandard, respectively.

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.

As part of the ACL Policy, the Bank’s Special Asset Group reviews and confirms the criticized and classified commercial loan report monthly.

At December 31, 2024, the Bank had $105.3 million of assets, including other real estate owned (“OREO”), classified as Substandard.

At December 31, 2023, the Bank had $106.6 million of assets classified as Substandard.

Assets which do not currently expose the Bank to sufficient risk to warrant classification but possess potential weaknesses, such as past delinquencies, are designated as Special Mention.

Special Mention assets totaled $54.5 million at December 31, 2024, as compared to $40.4 million at December 31, 2023.

The increase in substandard loans was primarily due new downgrades during the year ended December 31, 2023, and to a lesser extent, migrations from special mention, partly offset by payoffs, paydowns and upgrades.

New downgrades of $50.2 million were primarily comprised of five commercial relationships and migrations from special mention of $26.4 million were primarily comprised of two commercial relationships.

The decrease in special mention was primarily due to migrations to substandard noted above, as well as payoffs, paydowns, upgrades and a partial charge-off, which outpaced new downgrades of $32.8 million.

The increase in special mention loans was primarily due to new downgrades totaling $49.5 million, partly offset by upgrades, payoffs and migrations to substandard during the year ended December 31, 2024.

Non-Performing Loans and OREO.

The following table sets forth information regarding non-accrual loans (“non-performing loans”) and OREO, including loans p urchased with credit deterioration (“PCD”) loans.

The Bank’s PCD loans relate to loans acquired from prior bank 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.

The following table sets forth information regarding non-accrual loans (“non-performing loans”), including loans p urchased with credit deterioration (“PCD”), and OREO .

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.

It is the policy of the Bank to cease accruing interest on loans 90 days or more past due or in the process of foreclosure.

During 2022, the Company sold its remaining OREO and there was no OREO as of December 31, 2023 and 2022.

At December 31,

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$ 35,527 $ 29,548 $ 23,265

Non-performing assets (1)

OREO 1,811 — —

Non-performing loans and assets (1)

$ 37,338 $ 29,548 $ 23,265

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(1) Non-performing loans consist of all loans 90 days or more past due and other loans in the process of foreclosure.

Non-performing assets consist of non-performing loans and OREO.

(2) Loans acquired from prior bank acquisitions were recorded at fair value.

(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.

Non-performing loans totaled $29.5 million at December 31, 2023, an increase of $6.3 million as compared to December 31, 2022, primarily due to the addition of a single commercial real estate credit relationship, which was partially charged-off during 2023 and has a remaining exposure of $8.8 million, partly offset by loans that were paid off or returned to accrual status.

Non-performing loans totaled $35.5 million at December 31, 2024, an increase of $6.0 million as compared to December 31, 2023, primarily due to acquired PCD loans from Spring Garden Capital Group, LLC (“Spring Garden”).

The Company has OREO assets of $1.8 million and $0 at December 31, 2024, and 2023, respectively.

The increase in OREO assets related to the acquisition of Spring Garden.

Allowance for Credit Losses (“ACL”):

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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 percent of total non-performing loans was 227.21% at December 31, 2023, a decrease from 244.25% in the prior year.

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 Bank will continue to monitor its allowance for loan credit losses as conditions dictate.

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Balance at beginning of year $ 67,137 $ 56,824 $ 48,850

Commercial real estate (1)

Commercial real estate - investor (1)

1,659 8,350 8

Commercial real estate - owner occupied — 6 62

Commercial and industrial — 129 60

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Net charge-offs (recoveries) 1,555 8,382 (340)

Provision (benefit) for credit losses 18,695 7,634 (12,346)

Initial allowance on acquired loans from Spring Garden 2,547 — —

Provision for credit losses 5,478 18,695 7,634

Balance at end of year $ 73,607 $ 67,137 $ 56,824

(1) Commercial real estate charge-offs for the year ended December 31, 2023 of $8.4 million, primarily related to one relationship, which had a partial charge-off of $8.4 million to its estimated realizable value of $8.8 million.

(1) Commercial real estate - investor charge-offs during the year ended December 31, 2024 and 2023 of $1.7 million and $8.4 million, respectively, primarily related to a single commercial relationship which had partial charge-offs.

This was resolved via sale of collateral during 2024.

The 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):

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2024 2023 2022

Net Charge-offs (Recoveries) Ratio of Net Charge-offs (Recoveries) to Average Loans Net (Recoveries) Charge-offs Ratio of Net (Recoveries) Charge-offs to Average Loans Net (Recoveries)Charge-offs Ratio of Net (Recoveries) Charge-offs 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 (Recoveries)Charge-offs Ratio of Net (Recoveries) Charge-offs to Average Loans

Net charge-offs (recoveries):

Commercial real estate $ 8,336 0.08 % $ (155) — % $ 205 — %

Commercial real estate - investor $ 1,440 0.02 % $ 8,344 0.08 % $ (47) — %

Commercial real estate - owner occupied (32) — (8) — (108) —

Commercial and industrial (18) — 104 — (95) —

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Average net loans outstanding during the year $ 10,019,531 $ 10,016,859 $ 9,323,619

The net charge-offs for the year ended December 31, 2023 was primarily related to the one commercial real estate relationship noted above.

The net recoveries for the year ended December 31, 2022 and 2021 was primarily due to improved credit quality and successful recovery of previously charged-off balances.

The net charge-offs for the years ended December 31, 2024 and 2023 were primarily related to the one commercial real estate - investor relationship which was resolved via sale of collateral in 2024.

The net recoveries for the year ended December 31, 2022 were primarily due to improved credit quality and successful recovery of previously charged-off balances.

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):

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of Loans to Total

Commercial real estate $ 32,253 48.04 % 61.75 % $ 25,493 44.86 % 62.20 % $ 31,388 64.24 % 63.01 %

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

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The portfolio is also used to provide collateral for qualified deposits and borrowings and to manage interest rate risk.

The investment policy is overseen by the Board of Directors and generally limits investments to government and federal agency obligations, agency and non-agency mortgage-backed securities, municipal, corporate, and asset-backed securities.

The investment policy is overseen by the Board and generally limits investments to government and federal agency obligations, agency and non-agency mortgage-backed securities, and municipal, corporate, and asset-backed securities.

The Company’s investment policy mirrors that of the Bank except that it allows for the purchase of certain other debt, preferred stock, and equity securities in limited amounts.

The Board of Directors has delegated authority to implement the investment policy to the Company and Bank’s Investment Committees under the oversight of the Asset Liability Committee.

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.

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Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Refer to Note 4 Securities, to the Consolidated Financial Statements, for further discussion on contractual maturities and callable securities.

At December 31, 2024

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The Bank has other sources of liquidity if a need for additional funds arises, including various lines of credit at multiple financial institutions, access to the FRB discount window, and the Bank Term Funding Program (“BTFP”).

The Bank has other sources of liquidity if a need for additional funds arises, including lines of credit at multiple financial institutions and access to the FRB discount window.

The Bank offers a variety of deposit accounts with a range of interest rates and terms to retail, government, and business customers.

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however, market interest rates and rates offered by competing financial institutions could significantly affect the Bank’s ability to attract and retain deposits.

Despite the result of several bank failures in early 2023 and the related industry-wide concerns including liquidity, and funding, the Company’s deposits increased $759.7 million to $10.43 billion at December 31, 2023 from $9.68 billion in the prior year.

The Company’s deposits decreased $368.6 million to $10.07 billion at December 31, 2024, from $10.43 billion in the prior year, primarily related to planned runoff of brokered time deposits, which decreased by $556.8 million, partly offset by increases in retail time deposits of $203.5 million.

At December 31, 2024 and 2023, the Bank had $5.75 billion and $5.32 billion, respectively, of total uninsured deposits (in excess of the Federal Deposit Insurance Corporation limit).

At December 31, 2023 and 2022, this total included $2.31 billion and $2.27 billion, respectively, of collateralized government deposits, $1.42 billion and $1.44 billion of intercompany deposits of fully consolidated subsidiaries, leaving estimated adjusted uninsured deposits of $1.60 billion and $1.91 billion, or 15.2% and 19.6% of total deposits.

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, 2024, the Bank had $457.2 million in time deposits in amounts of $250,000 or more maturing as follows:

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The maximum amount that the FHLB will advance to member institutions, including the Bank, fluctuates from time to time in accordance with the policies of the FHLB.

At December 31, 2023, the Bank had $848.6 million of outstanding advances from the FHLB.

At December 31, 2024, the Bank had $1.07 billion of outstanding advances from the FHLB.

The Bank can also borrow from the Federal Reserve Bank of Philadelphia under its primary credit program.

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At December 31, 2024, the Bank had no borrowings outstanding with the Federal Reserve Bank of Philadelphia.

As of December 31, 2023, the Company pledged $7.26 billion of loans with the FHLB and FRB to enhance the Company’s borrowing capacity, and includes collateral pledged to the FHLB to obtain a municipal letter of credit to collateralize certain government municipal deposits.

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.

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 $1.15 billion of securities with FHLB and FRB to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law.

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.

The Bank also borrows funds using securities sold under agreements to repurchase with customers.

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At December 31, 2024, the Bank had borrowed $60.6 million through securities sold under agreements to repurchase with customers.

The Bank has access to the FRB discount window and the BTFP as additional sources of funds.

As of December 31, 2023 the Bank had no borrowings outstanding with either the FRB discount window or the BTFP.

The Bank has access to the FRB discount window as an additional source of funds.

As of December 31, 2024 the Bank had no borrowings outstanding with the FRB discount window.

Recent Acquisitions

The Company’s acquisitions over recent years have enhanced the Bank’s position as the premier community banking franchise in central and southern New Jersey, strengthened its presence in the major metropolitan areas of Philadelphia and New York, grown business lines, expanded its geographic footprint, and improved financial performance.

On April 1, 2022, the Company completed its acquisition of 60% of Trident Abstract Title Agency, LLC (“Trident”), which provides commercial and residential title services.

On October 1, 2024, the Company completed the acquisition of Spring Garden.

Total consideration paid was $162.7 million and goodwill from the transaction amounted to $17.2 million.

Trident’s results of operations are included in the consolidated results for the period beginning on April 1, 2022.

The transaction will be complementary to the Company’s existing products and will expand the Company’s specialty finance offerings.

The Company’s acquisitions over recent years have enhanced the Company’s position as the premier community banking franchise in central and southern New Jersey, strengthened its presence in the major metropolitan areas of Philadelphia and New York, grown business lines, expanded its geographic footprint, and improved financial performance.

The Company will continue to evaluate potential acquisition opportunities to further create stockholder value.

Subsidiary Activities

At December 31, 2023, the Bank owned all or a majority interest in three direct subsidiaries:

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.

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This subsidiary is maintained to take legal possession of certain repossessed collateral for resale to third parties.

• Spring Garden Capital Group, LLC, a Delaware limited liability company, was acquired by the Bank on October 1, 2024 to expand the Bank’s specialty finance offerings.

This subsidiary is the holding company for Spring Garden Lending Group, LLC, a specialty lending company, Spring Garden Capital Advisors, LLC, a real estate consulting company, and Spring Garden Equity, LLC, a mezzanine finance company.

Spring Garden Lending Baltimore, LLC, a specialty lending company, is also a wholly owned subsidiary of Spring Garden Lending Group, LLC.

• OFB Acquisition LLC, a New Jersey limited liability company, was incorporated on August 1, 2024 as a wholly-owned subsidiary.

The subsidiary holds certain assets and liabilities acquired through acquisitions.

In addition to the Bank, the Company holds OceanFirst Risk Management, Inc.

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Human Capital

OceanFirst’s long-term growth and success depends on its ability to attract, develop and retain a high-performing and diverse workforce.

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.

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Of the Bank’s managers, 52% are female as of December 31, 2024.

Additionally, 42% of the employees are either Millennial or Generation Z.

Total rewards

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In addition, the Bank promotes health and wellness by encouraging work-life balance, offering flexible work schedules and sponsoring various programs, focusing on mental, emotional, social, intellectual, and spiritual health.

Talent and Promoting Diversity

A core tenet of the Bank’s talent philosophy is to both develop talent from within and supplement with external hires.

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employee referrals are also encouraged.

The Company is dedicated to recruitment and career development practices that support its employees and promotes diversity in its workforce at all levels of the Company.

The Company is dedicated to recruitment and career development practices that support its employees at all levels of the Company.

The Company is committed to having a workforce that reflects the communities in which it serves.

Partnerships are in place with several sources to assist in attracting diverse talent from a broad population, including African American, Asian American, and Latino chamber affiliations.

In addition, career opportunities are shared with colleges and universities with diverse student bodies.

Social media branding has increased to attract top talent who are seeking careers with employers who are genuinely committed to DEI.

The Internship program and the EDGE program (an entry level development program) also serve as a pipeline of diverse talent for full time employment.

The internship program and the EDGE program (an entry level development program) also serve as a pipeline of early career talent for full time employment.

Other available tools are also utilized to connect with prospective new hires.

As of December 31, 2023, 20% of the Bank’s employees were persons of color.

Following a multi-pronged recruiting strategy, which includes sourcing diverse candidate pools, new hires participate in an onboarding program which includes an introduction to the Bank’s culture, policies, and procedures.

Following a multi-pronged recruiting strategy, new hires participate in an onboarding program which includes an introduction to the Bank’s culture, policies, and procedures.

New employees are assigned an ambassador, who extends the integration process beyond the typical orientation experience.

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This approach has yielded loyalty and commitment from employees which in turn grows the business, products, and customers.

This approach has also added new employees and ideas, which support a continuous improvement mindset and the goals of a diverse and inclusive workforce.

The Bank strives to promote inclusion through defined Company values and behaviors.

With the support from the Board of Directors, the Bank continues to explore additional diversity, equity, inclusion, and belonging efforts through multiple approaches to inclusion:

candidates, employees, and the marketplace.

The ongoing diversity and inclusion initiatives support a goal that everyone throughout the Company is engaged in creating an inclusive workplace.

The Bank is focused on sourcing and hiring with fairness and equitable approaches, creating an environment where all employees can develop and thrive.

This approach has also added new employees and ideas, which support a continuous improvement mindset and the goals of a collaborative workforce.

REGULATION AND SUPERVISION

The Company is a bank holding company (“BHC”) under Section 3 of the Bank Holding Company Act of 1956, as amended (the “BHC Act”).

As a bank holding company, the Company is subject to the requirements of the BHC Act, including required approvals for investments in or acquisitions of banking organizations, or entities involved in activities that are deemed closely related to banking, capital adequacy standards, and limitations on nonbanking activities.

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 Federal Deposit Insurance Corporation (“FDIC”).

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 Bank is subject to extensive regulation, examination, and supervision by the OCC, as its primary federal regulator, and the FDIC, as the deposit insurer.

The Bank must file reports with the OCC and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to consummating

certain transactions such as mergers with, or acquisitions of, other insured depository institutions.

As a financial institution with more than $10 billion in assets, the Bank is also subject to examination by the CFPB.

The Bank must file reports with the OCC and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to consummating certain transactions such as mergers with, or acquisitions of, other insured depository institutions.

The OCC conducts periodic examinations to test the Bank’s safety and soundness and compliance with various regulatory requirements.

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.

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.

The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate allowance for credit losses for regulatory purposes.

In addition, the Company elected to become a financial holding company under the Gramm-Leach Bliley Act (the “GLBA”) amendments to the BHC Act.

Financial holding companies, and the nonbank companies under their control, are permitted to engage in activities considered financial in nature or incidental to financial activities and, if the FRB determines that they pose no risk to the safety or soundness of depository institutions or the financial system in general, activities that are considered complementary to financial activities.

Financial holding companies that continue to meet the applicable requirements, and the non-bank companies under their control, are permitted to engage in activities considered financial in nature or incidental to financial activities and, if the FRB determines that they pose no risk to the safety or soundness of depository institutions or the financial system in general, activities that are considered complementary to financial activities.

The banking industry is highly regulated.

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Rules adopted by the FRB to implement these requirements limit interchange fees per debit card transaction collected by banks with assets of $10 billion or mor e.

Under the temporary relief provisions of a joint rule published by the OCC, the FDIC, and the FRB, the Bank received relief from Dodd-Frank limitations on debit card interchange fees collected by banks with assets of $10 billion or more, but was subject to reduced interchange fees beginning in July 2022.

In addition, market forces may result in reduced fees charged by all issuers, regardless of asset size, which may result in reduced revenues for the Bank.

For the year ended December 31, 2023, the Bank’s revenues from interchange fees were $5.0 million, a decrease of $3.3 million from 2022, due to limitation on debit card interchange fees which became effective for the Company on July 1, 2022.

The 2023 average net interchange fee per transaction was fourteen cents ($0.14), as compared to twenty nine cents ($0.29) in the prior year.

The Dodd-Frank Act mandates that institutions with more than $10 billion in assets clear all eligible dealer swaps through a futures commission merchant to a central counterparty clearing house.

The Bank has entered into relationships with a futures commission merchant and two central counterparty clearing houses.

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 .

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Among other things, the EGRRCPA increased the asset threshold for depository institutions and holding companies to perform stress tests required under Dodd Frank from $10 billion to $250 billion in total consolidated assets, and raised the threshold for the requirement that publicly traded holding companies have a risk committee from $10 billion in consolidated assets to $50 billion in consolidated assets.

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.

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 .

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Further, regulatory guidance provides for prior regulatory review of capital distributions in certain circumstances such as where the BHC’s net income for the past four quarters, net of dividends previously paid over that period is insufficient to fully fund the dividend, the proposed dividend exceeds earnings for the period for which it is being paid, or the BHC’s overall rate of earnings retention is inconsistent with the BHC’s capital needs and overall financial condition.

The guidance also provides for prior consultation with supervisory staff for material increases in the amount of a

BHC’s common stock dividend.

The guidance also provides for prior consultation with supervisory staff for material increases in the amount of a BHC’s common stock dividend.

The ability of a BHC to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.

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Acquisition of the Company .

Under the Change in Bank Control Act, no person may acquire control of a BHC, such as the Company, unless the FRB has been given 60 days prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquiror and the competitive effects of the acquisition.

Control, as defined for this purpose, means ownership, control, or power to vote 25% or more of any class of voting stock.

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Alternatively, the financial holding company may elect to limit its activities and the activities of its subsidiaries to those permissible for a BHC that is not a financial holding company.

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.

For additional information, refer to Regulation of Bank Subsidiary – Community Reinvestment Act and Fair Lending Laws.

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.

For additional information, refer to Regulation of Bank Subsidiary – Community Reinvestment Act and Fair Lending Law.

Regulation of Bank Subsidiary

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Assessments for institutions with $10 billion or more of assets are primarily based on a scorecard approach by the FDIC, including factors such as examination ratings and modeling measuring the institution’s ability to withstand asset-related and funding-related stress and potential loss to the DIF should the bank fail.

As a result of the increase in assessment rates, described below, the assessment range (inclusive of possible adjustments specified by the regulations) for institutions with greater than $10 billion of total assets is 2.5 to 42 basis points.

Additionally, on November 29, 2023, the FDIC adopted a final rule, effective on April 1, 2024, to implement a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in the spring of 2023.

The FDIC will collect the special assessment at a quarterly rate multiplied by an insured depository institution’s estimated uninsured deposits, reported for the quarter that ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits, over an initial eight quarterly assessment periods and currently projects that the special assessment will be collected for an initial two quarters at a lower rate.

The first of the collection periods was the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with a payment date of June 28, 2024.

The FDIC has authority to increase insurance assessments.

The FDIC adopted a final rule in October 2022 to increase initial base deposit insurance assessment rates by two basis points which began in the first quarterly assessment period of 2023.

Any significant increases would have an adverse effect on the Bank’s operating expenses and results of operations.

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The total deposit insurance assessment expenses incurred in 2024 and 2023 were $9.7 million and $9.9 million, respectively.

The increase in expenses in 2023 was primarily due to the FDIC approval of a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

As a result of this rule, the Bank incurred a special assessment of $1.7 million for the year ended December 31, 2023.

The expenses in 2024 and 2023 were impacted by the FDIC approval of the final rule to implement a special assessment as noted above.

As a result, the Bank incurred a special assessment of $418,000 and $1.7 million for the years ended December 31, 2024 and 2023.

Loans to One Borrower .

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The assessments paid by the Bank totaled $1.3 million and $1.2 million, respectively, for the years ended December 31, 2024 and 2023.

For calendar year 2025, the OCC is increasing the marginal rates in the general assessment fee schedule for assets $40 billion and below by a factor of 2.65% to account for inflation.

Transactions with Related Parties .

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The aggregate amount of “covered transactions” with any individual affiliate is limited to 10% of the capital and surplus of the bank.

The aggregate amount of “covered transactions” with all affiliates is limited to 20% of the bank’s capital

The aggregate amount of “covered transactions” with all affiliates is limited to 20% of the bank’s capital and surplus.

Certain transactions with affiliates are required to be secured by collateral in an amount and of a type described in federal law.

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In addition, banks are prohibited from lending to any affiliate that is engaged in activities that are not permissible for BHCs and no bank may purchase the securities of any affiliate other than a subsidiary.

Community Reinvestment Act and Fair Lending Laws.

Community Reinvestment Act.

All national banks have a responsibility under the CRA and related federal regulations to help meet the credit needs of their communities, including low- and moderate- income neighborhoods.

In connection with its examination of a national bank, the OCC is required to evaluate and rate the bank’s record of compliance with the CRA.

On October 24, 2023, the FDIC, the FRB, and the OCC issued a final rule to strengthen and modernize the CRA regulations.

A national bank’s failure to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on certain of its activities such as branching or mergers.

In 2023, the FDIC, the FRB, and the OCC issued a final rule to strengthen and modernize the CRA regulations.

Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate large banks under four performance tests:

the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.

The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

A national bank’s failure to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on certain of its activities such as branching or mergers.

During 2023, the Bank received a CRA Performance Evaluation from the OCC with a rating of “Needs to Improve” for the evaluation period January 1, 2018 through December 31, 2020.

Based on its performance on the individual components of the CRA tests, the Bank received a rating of “Low Satisfactory” for the Lending, Investment, and Service Tests.

The Bank’s final overall rating, however, was downgraded to “Needs to Improve” because of a Fair Housing Act violation cited by the OCC.

The Bank’s management has taken actions, including adding to its compliance staff, to address the deficiencies and is committed to taking further voluntary corrective actions.

A “Needs to Improve” rating may restrict certain expansionary activities, including certain mergers and acquisitions and the establishment of Bank branches.

The rating also results in a loss of expedited processing of applications to undertake certain activities.

The rating will remain in place until the OCC issues a revised CRA rating following a subsequent CRA examination.

The next CRA examination is expected to commence sometime in 2024 for the CRA examination period 2021 to 2023.

The precise timing of the examination and any results therefrom will not be known until after the completion of the examination.

In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices based on the characteristics specified in those statutes.

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.

On March 29, 2024, a federal court in the Northern District of Texas issued a preliminary injunction of the new CRA regulations, enjoining the federal banking agencies

from enforcing the regulations against the plaintiff bank industry trade groups, and extending the regulations’ implementation dates day-for-day for each day the injunction is in place.

During 2025, the Bank received a CRA Performance Evaluation from the OCC with a rating of “Outstanding” for the evaluation period from 2021 to 2023, for which the examination commenced in 2024.

Fair Lending Law .

The Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices based on the characteristics specified in those statutes.

A national bank’s failure to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on certain of its activities such as branching or mergers.

The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the OCC, as well as other federal regulatory agencies and the Department of Justice.

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.

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.

The Bank also has agreed to invest $400,000 in community partnerships, spend $140,000 per year in targeted marketing, advertising and outreach in the New Brunswick-Lakewood area which includes Middlesex, Monmouth and Ocean counties, and provide financial education workshops designed to expand access to home mortgage credit.

As of December 31, 2024, the Bank believes it is on track to comply with the commitments entered into the settlement agreements.

The Bank also will continue lending and community development initiatives that pre-date the settlement, and which are designed to increase access to residential lending and other financial services in the New Brunswick market and across its footprint.

Since 2020, the Bank has provided over $625 million in loans and investments benefiting thousands of people in the communities it serves.

Federal Home Loan Bank System

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Federal Reserve System

The FRB regulations require depository institutions to maintain reserves against their transaction accounts (primarily interest-bearing checking and regular checking accounts).

Effective March 26, 2020, the FRB reduced reserve requirement ratios to zero, effectively eliminating the requirements.

The FRB indicated that it has no plans to re-impose reserve requirements but could in the future if conditions warrant.

In addition, as a national bank, the Bank is required to hold capital stock of the Federal Reserve Bank of Philadelphia.

As a national bank, the Bank is required to hold capital stock of the Federal Reserve Bank of Philadelphia.

The required shares may be adjusted up or down based on changes to the Bank's common stock and paid-in surplus.

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However, the level of dividends is reduced for financial institutions that exceed a certain asset size.

For 2023, the asset level is $12.12 billion, and

financial institutions whose assets exceed that level receive dividends generally equal to the rate of the 10-year Treasury note, which totaled $1.6 million for the year ended December 31, 2023, as compared to $1.3 million in the prior year.

For 2024, the asset level is $12.52 billion, and financial institutions whose assets exceed that level receive dividends generally equal to the rate of the 10-year Treasury note, which totaled $1.7 million for the year ended December 31, 2024, as compared to $1.6 million in the prior year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business