What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-23 · 316 added, 300 removed, 1450 unchanged (30% of the section changed)

4 unchanged sentences

We have audited the accompanying consolidated statements of financial condition of OceanFirst Financial Corp.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows, for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

21 unchanged sentences

The adjusted loss rate is calculated for an eight-quarter forecast period then reverts to the historical loss rate on a straight-line basis over four quarters.

The Company considers qualitative adjustments to expected credit loss estimates for information not already captured in the loss estimation process.

Company considers qualitative adjustments to expected credit loss estimates for information not already captured in the loss estimation process.

Qualitative factor adjustments may increase or decrease management’s estimate of expected credit losses.

7 unchanged sentences

• We evaluated the appropriateness of the Company’s accounting policies and methodologies, involved in determining the ACL.

• We involved credit specialists to assist us in evaluating the Company’s development of the CECL model, including the reasonableness of the models and the selection of and calibration to economic factors.

• We involved credit specialists to assist us in evaluating the Company’s CECL model, including the reasonableness of the models and the selection of and calibration to economic factors.

• We assessed the reasonableness of the Company’s qualitative methodology, tested key calculations utilized within the qualitative estimate and agreed underlying data within the calculation to source documents.

5 unchanged sentences

The Company did not identify any triggering events between the annual assessment date and December 31, 2024.

The Company estimated the fair value of its single reporting unit using a combination of an income approach and a market approach.

The income approach utilized a discounted cash flow (“DCF”) analysis.

A DCF analysis requires significant judgment to model financial forecasts, which includes loan and deposit growth, funding mix, income on securities, credit performance, forward interest rates, future returns driven by net interest margin, fee generation and expense incurrence, industry and economic trends, and other relevant considerations.

For periods beyond those forecasted, a terminal value was estimated based on an assumed long-term growth rate, which was derived using the Gordon Growth Model.

The discount rate applied to the forecasted cash flows was calculated using a build-up approach, which starts with the risk-free interest rate and then calibrated for market and company specific risk premiums, including a beta, equity risk, size, and company-specific risk premiums to reflect risks and uncertainties in the financial market and in the Company’s business projections.

The market approach utilizes observable market data from comparable public companies, including price-to-tangible book value ratios, to estimate the Company’s fair value.

The market approach also incorporates a control premium to represent the Company’s expectation of a hypothetical acquisition.

Management uses judgment in the selection of comparable companies and includes those with similar business activities, and related operating environments.

Auditing the fair value of the Company involves a high degree of subjectivity, including the need to involve our fair value specialists, as it relates to evaluating whether management's judgments in determining whether the financial forecasts, selection of terminal value growth rates and the weighted-average cost of capital used to determine the discount rates were appropriate.

We also needed to evaluate whether management's judgement in selection of comparable companies within the market approach is appropriate.

The Company estimated the fair value of its single reporting unit using the market capitalization method, which is a form of a market approach.

Under the market capitalization method, the Company estimated the fair value of the Company by utilizing observable market data to calculate the aggregate market value of the Company based on the total number of outstanding shares of common and preferred stock and the market prices of the shares as of the assessment date as well as consideration of initiatives unknown by the market and the evaluation of an implied control premium.

The implied control premium was supported using a discounted cash flow method and evaluating the present value of market participant cost savings and synergies.

Auditing the estimated fair value of the Company involves a high degree of subjectivity, including the need to involve our fair value specialists, as it relates to evaluating whether management's judgments in determining whether the implied control premium was reasonable.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the judgements made by management included the following, among others:

• We evaluated the reasonableness of the Company’s valuation methodologies as well as the weightings assigned to each analysis.

• We tested the design and operating effectiveness of controls over goodwill, including financial forecasts, the selection of the terminal value growth rate, cost of equity used to determine the discount rate, and selection of control premium.

• We evaluated the reasonableness of the Company’s financial forecasts, including forecasted revenue growth rates, by comparing to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases and analyst reports of the Company and companies in its peer group.

• With the assistance of our fair value specialists, we evaluated the discount rate, terminal value growth rate, and control premium used by the Company, including testing the underlying source information and the mathematical accuracy of the calculations by developing a range of independent estimates and comparing to those selected by management.

• We evaluated the reasonableness of the Company’s valuation methodology.

• We tested the design and operating effectiveness of controls over goodwill, including financial forecasts, unknown conditions by the market as of the assessment date, and selection of control premium, including the estimate of market participant cost savings.

• We evaluated the reasonableness of the Company’s financial forecasts by comparing to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in industry growth rate statistics.

• We evaluated the reasonableness of management’s estimate of market participant cost savings by (1) comparing to cost savings announced in recent bank acquisitions and (2) assessing the Company’s existing cost structure for potential cost savings and comparing that to management’s estimate.

• With the assistance of our fair value specialists, we evaluated the significant valuation assumptions including, among others, the control premium used by the Company, which included testing the underlying source information and the mathematical accuracy of the calculations by developing a range of independent estimates and comparing to those selected by management.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

Philadelphia, PA

February 28, 2025

8 unchanged sentences

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

13 unchanged sentences

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

February 23, 2024

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

OceanFirst Financial Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows of OceanFirst Financial Corp.

and subsidiaries (the Company) for the year ended December 31, 2021, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 1989 to 2022.

Short Hills, New Jersey

Philadelphia, PA

February 28, 2025

14 unchanged sentences

Interest and dividends receivable 45,914 51,874

Other real estate owned 1,811 —

Premises and equipment, net 115,256 121,372

2 unchanged sentences

Goodwill 523,308 506,146

Core deposit intangible 9,513 13,497

Intangibles 12,680 9,513

Other assets 185,702 179,661

40 unchanged sentences

Net interest income 334,035 369,731 377,477

Provision for credit losses (benefit) 17,678 7,768 ( 11,832 )

Net interest income after provision for credit losses (benefit) 352,053 369,709 317,170

Provision for credit losses 7,689 17,678 7,768

Net interest income after provision for credit losses 326,346 352,053 369,709

Other income:

3 unchanged sentences

Net gain on sales of loans 2,358 428 358

Net (loss) gain on equity investments ( 3,732 ) 9,685 7,145

Net gain (loss) from other real estate operations — 48 ( 15 )

Net gain (loss) on equity investments 4,225 ( 3,732 ) 9,685

Net (loss) gain from other real estate operations ( 20 ) — 48

Income from bank owned life insurance 7,905 5,280 6,578

11 unchanged sentences

Professional fees 9,483 18,297 12,993

Amortization of core deposit intangible 3,984 4,718 5,453

Amortization of intangibles 3,333 3,984 4,718

Branch consolidation expense, net — 70 713

22 unchanged sentences

Other comprehensive income (loss):

Unrealized gain (loss) on debt securities (net of tax expense of $ 4,560 in 2023, and tax benefit of $ 10,629 and $ 1,142 in 2022 and 2021, respectively)

Unrealized gain (loss) on debt securities (net of tax expense of $ 1,561 and $ 4,560 in 2024 and 2023, respectively, and tax benefit of $ 10,629 in 2022)

4,698 14,312 ( 33,402 )

2 unchanged sentences

( 956 ) ( 808 ) ( 25 )

Reclassification adjustment for loss (gains) included in net income (net of tax expense of $ 423 in 2023 and tax benefit of $ 26 in 2022, respectively)

Reclassification adjustment for loss (gains) included in net income (net of tax expense of $ 326 and $ 423 in 2024 and 2023, respectively, and net of tax benefit of $ 26 in 2022)

1,023 1,326 ( 82 )

23 unchanged sentences

Stock compensation — — 6,638 — — — — — 6,638

Acquisition of common

stock by ESOP — — — — — ( 3,200 ) ( 3,200 )

Allocation of ESOP stock — — 82 — — 2,424 — — 2,506

5 unchanged sentences

Preferred stock dividend — — — ( 4,016 ) — — — — ( 4,016 )

Acquisition of Trident Abstract Title Agency, LLC (“Trident”) — — — — — — — 836 836

Distribution to non-controlling interest — — — 6 — — — ( 788 ) ( 782 )

Balance at December 31, 2022 1 612 1,154,821 540,507 ( 35,982 ) ( 6,191 ) ( 69,106 ) 802 1,585,464

Net income — — — 104,029 — — — 36 104,065

Other comprehensive loss, net

Other comprehensive income, net

of tax — — — — 15,120 — — — 15,120

4 unchanged sentences

Exercise of stock options — 1 1,421 ( 720 ) — — — — 702

Repurchase 373,223 shares of

— — — — — — ( 7,396 ) — ( 7,396 )

Preferred stock dividend — — — ( 4,016 ) — — — — ( 4,016 )

Acquisition of Trident Abstract Title Agency, LLC (“Trident”) — — — — — — — 836 836

Distribution to non-controlling interest — — — — — — — ( 55 ) ( 55 )

8 unchanged sentences

Exercise of stock options — — 571 — — — — — 571

Repurchase 1,383,238 shares of

— — 35 — — — ( 21,511 ) — ( 21,476 )

Preferred stock dividend — — — ( 4,016 ) — — — — ( 4,016 )

Distribution to non-controlling interest — — — — — — — ( 55 ) ( 55 )

Balance at December 31, 2024 $ 1 $ 613 $ 1,168,321 $ 641,727 $ ( 15,853 ) $ ( 2,542 ) $ ( 90,617 ) $ 1,107 $ 1,702,757

12 unchanged sentences

Net excess tax expense on stock compensation 365 243 216

Amortization of core deposit intangible 3,984 4,718 5,453

Amortization of intangibles 3,333 3,984 4,718

Net accretion of purchase accounting adjustments ( 2,865 ) ( 5,848 ) ( 9,752 )

3 unchanged sentences

Net amortization of deferred fees/costs and premiums/discounts on loans ( 3,055 ) ( 1,094 ) 1,129

Provision for credit losses (benefit) 17,678 7,768 ( 11,832 )

Deferred tax provision 3,151 1,777 3,608

Provision for credit losses 7,689 17,678 7,768

Net gain on sale of other real estate owned — — ( 54 )

1 unchanged sentence

Net gain on sale of fixed assets ( 131 ) ( 26 ) ( 38 )

Net loss (gain) on equity investments 3,732 ( 9,685 ) ( 7,145 )

Net (gain) loss on equity investments ( 4,225 ) 3,732 ( 9,685 )

Net gain on sales of loans ( 2,358 ) ( 428 ) ( 358 )

3 unchanged sentences

Increase in value of bank owned life insurance ( 6,566 ) ( 5,280 ) ( 6,578 )

Net loss (gain) on sale of assets held for sale 233 ( 1,959 ) ( 318 )

(Increase) decrease in interest and dividends receivable ( 7,170 ) ( 12,098 ) 2,663

Decrease (increase) in other assets 34,504 ( 80,233 ) 33,093

Net (gain) loss on sale of assets held for sale ( 855 ) 233 ( 1,959 )

Decrease (increase) in interest and dividends receivable 5,960 ( 7,170 ) ( 12,098 )

Deferred tax (benefit) provision ( 337 ) 3,151 1,777

(Increase) decrease in other assets ( 3,364 ) 34,504 ( 80,233 )

(Decrease) increase in other liabilities ( 8,062 ) ( 44,663 ) 178,684

2 unchanged sentences

Cash flows from investing activities:

Net increase in loans receivable ( 243,545 ) ( 1,126,997 ) ( 556,449 )

Net decrease (increase) in loans receivable 199,094 ( 243,545 ) ( 1,126,997 )

Purchases of loan pools ( 84,464 ) ( 35,904 ) ( 171,623 )

Premiums paid on purchased loan pools ( 1,210 ) ( 866 ) ( 8,874 )

Discounts received (premiums paid) on purchased loan pools 8,397 ( 1,210 ) ( 866 )

Proceeds from sale of loans — — 13,388

20 unchanged sentences

Purchases of premises and equipment ( 7,567 ) ( 7,708 ) ( 16,107 )

Proceeds from disposal of premises and equipment 3,380 — —

Purchases of operating lease equipment — — ( 4,789 )

Net cash consideration received for acquisition — 38,609 —

Net cash used in investing activities ( 487,997 ) ( 1,321,008 ) ( 1,477,842 )

Net cash consideration (paid) received for acquisition ( 68,932 ) — 38,609

Net cash provided by (used in) investing activities 106,400 ( 487,997 ) ( 1,321,008 )

Cash flows from financing activities:

Net increase (decrease) in deposits 760,023 ( 56,963 ) 407,569

Net payment for sale of branches — — ( 86,282 )

Increase (decrease) in short-term borrowings 3,950 ( 49,672 ) ( 9,685 )

Net (repayment) proceeds from FHLB advances ( 362,530 ) 1,211,166 —

Net (decrease) increase in deposits ( 366,502 ) 760,023 ( 56,963 )

(Decrease) increase in short-term borrowings ( 12,667 ) 3,950 ( 49,672 )

Net proceeds (repayment) from FHLB advances 223,975 ( 362,530 ) 1,211,166

Repayments of other borrowings — — ( 35,104 )

3 unchanged sentences

Purchase of treasury stock ( 21,476 ) — ( 7,396 )

Acquisition of common stock by ESOP — — ( 3,200 )

Dividends paid ( 50,880 ) ( 51,274 ) ( 47,511 )

Distributions to non-controlling interest — ( 55 ) ( 782 )

Net cash provided by financing activities 349,468 1,013,760 223,993

Net cash (used in) provided by financing activities ( 228,746 ) 349,468 1,013,760

Net decrease in cash and due from banks and restricted cash ( 30,103 ) ( 14,268 ) ( 56,798 )

15 unchanged sentences

Transfer of premises and equipment to assets held-for-sale — 1,302 2,776

Transfer of debt securities from available-for-sale to held-to-maturity — — 12,721

Transfer of securities from held-to-maturity to available-for-sale 500 — —

Transfer of loans receivable to loans held-for-sale — — 13,178

Settlement of preexisting loan receivable from Spring Garden 96,979 — —

OceanFirst Financial Corp.

5 unchanged sentences

Non-cash assets acquired:

Loans $ 140,062 $ — $ —

Other current assets — — 238

1 unchanged sentence

Right of use ("ROU") asset — — 779

Other real estate owned 1,666 — —

Other assets 1,122 — 81

Goodwill and other intangible assets, net 23,662 — 5,827

Total non-cash assets acquired $ 166,669 $ — $ 6,943

2 unchanged sentences

Other liabilities 4,033 — 43,937

Total lease and other liabilities $ 4,033 $ — $ 44,716

Total liabilities assumed $ 4,033 $ — $ 44,716

3 unchanged sentences

Principles of Consolidation

The consolidated financial statements include the accounts of OceanFirst Financial Corp.

(the “Company”) and its wholly-owned subsidiaries, OceanFirst Bank N.A.

The consolidated financial statements include the accounts of:

OceanFirst Financial Corp.

(the “Company”);

its wholly-owned subsidiaries, OceanFirst Bank N.A.

(the “Bank”) and OceanFirst Risk Management, Inc.;

the Bank’s direct and indirect wholly-owned subsidiaries, OceanFirst REIT Holdings, Inc., OceanFirst Management Corp., OceanFirst Realty Corp., Casaba Real Estate Holdings Corporation, and Country Property Holdings, Inc.;

and a majority controlling interest in Trident Abstract Title Agency, LLC.

Spring Garden Capital Group, LLC (and it’s subsidiaries) (“Spring Garden”), and a majority controlling interest in Trident Abstract Title Agency, LLC (“Trident”).

All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain amounts previously reported have been reclassified to conform to the current year’s presentation.

The Bank provides a range of regional community banking services to retail and commercial customers through a network of branches and offices throughout New Jersey and in the major metropolitan areas of Philadelphia, New York, Baltimore, and Boston.

The Bank is subject to competition from other financial institutions and certain technology companies.

16 unchanged sentences

Debt securities include U.S.

government and agency obligations, state, municipal and sovereign debt obligations, corporate debt securities, asset-backed securities, and mortgage-backed securities (“MBS”).

government and agency obligations, state and municipal debt obligations, corporate debt securities, asset-backed securities, and mortgage-backed securities (“MBS”).

Mortgage-backed securities include:

35 unchanged sentences

The Company will record a loan charge-off to reduce a loan to the estimated fair value of the underlying collateral, less cost to sell, if it is determined that it is probable that recovery will come primarily from the sale of the collateral.

Loans Held for Sale

Loans Held for Sale and Mortgage Servicing Rights

Loans held for sale are carried at the lower of unpaid principal balance, net, or estimated fair value on an aggregate basis.

Estimated fair value is generally determined based on bid quotations from secondary markets.

Any reduction in loans held for sale are recorded through net gain on sales of loans.

Gains or losses recognized on sales to the secondary market are also recorded in net gain on sale of loans.

For certain mortgage loan sales, the Company will retain the contractual right to service those loans for a fee, and as such a mortgage servicing rights asset is recorded with a corresponding gain on sale.

Mortgage servicing rights represent the fair value assigned to the rights in the contracts that obligate the Company to service the loans sold in exchange for a servicing fee.

The assets are subsequently accounted for under the amortization method and are amortized over the estimated economic life of the related mortgage in proportion to the estimated expected future net servicing revenue generated from servicing the loan and are periodically evaluated for impairment.

Servicing income and the related amortization of servicing rights are recorded in fees and other charges within non-interest income on the Consolidated Statement of Income.

Mortgage servicing assets are included within other assets on the Consolidated Statements of Financial Condition.

Allowance for Credit Losses (“ACL”)

27 unchanged sentences

Collateral Dependent Financial Assets

For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable and where the borrower is experiencing financial difficulty, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date.

the collateral and the amortized cost basis of the asset as of the measurement date.

Fair value is generally calculated based on the value of the underlying collateral less an appraisal discount and the estimated cost to sell.

3 unchanged sentences

and (2) the Company, for economic or legal reasons related to a borrower’s financial condition or difficulties, modifies the loan in the form of a reduction in interest rate, an extension in term, principal forgiveness, other than insignificant payment delay, or a combination thereof.

Troubled Debt Restructured Loans

Prior to the adoption of ASU 2022-02, the Company classified certain loans as TDR loans when credit terms to a borrower in financial difficulty were modified in accordance with ASC 310-40.

Since adoption of this ASU, the Company has ceased to recognize or measure for new TDRs but those existing at December 31, 2022 remain until settled.

A loan that had been modified or renewed was considered a TDR when two conditions were met:

(1) the borrower is experiencing financial difficulty and (2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics.

So long as they share similar risk characteristics, TDRs may be collectively evaluated and included in the Company’s existing portfolio segments to measure the ACL, unless the TDR is collateral dependent or has been individually evaluated.

For TDRs individually evaluated that have been modified and the interest rate is the primary concession, the ACL is measured using a discounted cash flow method.

Loan Commitments and Allowance for Loan Credit Losses on Off-Balance Sheet Credit Exposures

11 unchanged sentences

(1) non-accrual status;

(2) legacy troubled debt restructured designation;

(2) modifications to borrowers experiencing financial difficulty;

(3) risk ratings of special mention, substandard or doubtful;

9 unchanged sentences

The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Other Real Estate Owned (“OREO”)

Other real estate owned is carried at the lower of cost or estimated fair value, less estimated costs to sell.

When a property is acquired, the excess of the loan balance over estimated fair value is charged to the allowance for credit losses for loans.

Operating results from other real estate owned, including rental income, operating expenses, gains and losses realized from the sales of other real estate owned, and subsequent write-downs are recorded as incurred.

Premises and Equipment

Land is carried at cost and premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization or, in the case of acquired premises, the estimated fair value on the acquisition date.

Land is carried at cost and premises and equipment, including land improvements and leasehold improvements, are stated at cost less accumulated depreciation and amortization or, in the case of acquired premises, the estimated fair value on the acquisition date.

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or leases.

2 unchanged sentences

furniture, fixtures and other electronic equipment:

building and leasehold improvements:

and buildings:

building improvements:

leasehold improvements:

the shorter of 10 years or lease term;

interactive teller machines (“ITM”):

solar power system:

and land improvements:

the shorter of 15 years or term of lease (if applicable).

Depreciable assets are placed in service when they are in a condition for use and available for their designated function.

15 unchanged sentences

Increases in cash surrender value are included in other non-interest income, while proceeds from death benefits are generally recorded as a reduction to the carrying value.

When incurred, death benefits in excess of carrying value are recognized in other non-interest income.

Intangible Assets

Intangible assets resulting from acquisitions, under the acquisition method of accounting, consists of goodwill and core deposit intangibles.

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions.

Intangible assets resulting from acquisitions, under the acquisition method of accounting, consists of goodwill, customer relationship intangible, and core deposit inta ngibles.

Customer relationship intangible asset represents the value associated with the business relationships which was acquired through Spring Garden acquisition.

The core deposit intangible asset represents the future economic benefit, including the present value of future tax benefits, of the potential cost saving from acquiring the core deposits as part of an acquisition compared to the cost of alternative funding sources.

Both intangibles are recognized over is its estimated useful life and are included within amortization of intangibles within non-interest expense.

Goodwill represents the excess of the purchase pric e over the estimated fair value of identifiable net assets acquired through purchase acquisitions.

Goodwill with an indefinite useful life is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates.

1 unchanged sentence

The factors considered in the qualitative assessment include macroeconomic conditions, industry and market conditions and overall financial performance of the Company, among other factors.

Under a quantitative assessment, the Company will estimate the fair value of the Company by assigning weightings to the discounted cash flow method and guideline public company method.

Under a quantitative assessment, the Company will estimate the fair value of the Company through a combination of income and market approach valuation methodologies.

The Company completes its annual goodwill impairment test as of August 31 and evaluates triggering events during interim periods, as applicable.

The Company completed its annual goodwill impairment test as of August 31, 2024.

For the annual test, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test based on the stock price at measurement date and economic uncertainty and market volatility impacting the banking sector.

To perform the quantitative test, a combination of an income valuation methodology, comprising a discounted cash flow analysis, and a market valuation methodology, comprising the guideline public company method, was employed.

Management then assigned weightings to the two approaches to conclude on the estimated fair value.

The weightings took into consideration recent market volatility and the suppressed stock prices of the Company and the banking industry.

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 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.

Management further supported the conclusions by assessing a combination of an income valuation methodology, comprising a discounted cash flow analysis and market valuation methodologies, comprising the guideline public company and guideline merged and acquired company methods.

The market capitalization method calculated the aggregate market value of the Company based on the total number of outstanding shares of common and preferred stock and the market prices of the shares as of the assessment date.

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.

The discounted cash flow (“DCF”) estimated the present value of future cash flows.

A DCF analysis requires significant judgment to model financial forecasts, which included loan and deposit growth, funding mix, income on securities, credit performance, forward interest rates, future returns driven by net interest margin, fee generation and expense incurrence, industry and economic trends, and other relevant considerations.

For periods beyond those forecasted, a terminal value was

estimated based on an assumed long-term growth rate, which was derived using the Gordon Growth Model.

A DCF analysis requires significant judgment to model financial forecasts, which included loan and deposit growth, income on securities, forward interest rates, fee generation and expense incurrence, industry and economic trends, and other relevant considerations.

For periods beyond those forecasted, a terminal value was estimated based on an assumed long-term growth rate, which was derived using the Gordon Growth Model.

The discount rate applied to the forecasted cash flows was calculated using a build-up approach, which starts with the risk-free interest rate, which was then calibrated for market and company specific risk premiums, including a beta, equity risk, size, and company-specific risk premiums to reflect risks and uncertainties in the financial market and in the Company’s business projections.

The market approach utilizes observable market data from comparable public companies, including price-to-tangible book value ratios, to estimate the Company’s fair value.

The market approach also incorporates a control premium to represent the Company’s expectation of a hypothetical acquisition.

Management uses judgment in the selection of comparable companies and includes those with similar business activities, and related operating environments.

The results of the quantitative assessment indicated that the fair value of the Company’s reporting unit exceeded its carrying amount as of the measurement date, which resulted in no impairment loss at August 31, 2023.

The market approach for guideline public company method utilizes observable market data from comparable public companies, including price-to-tangible book value ratios, to estimate the Company’s fair value.

This approach also incorporates a control premium to represent the Company’s expectation of a hypothetical acquisition.

The market approach for guideline merged and acquired company method utilizes observable transactions of actual prices paid for target companies that operated in comparable industries or markets facing similar risks.

Both methods of the market approach require judgment in the selection of comparable companies or comparable transactions and includes those with similar business activities, and related operating environments.

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.

The Company did not identify any triggering events between the annual assessment date and December 31, 2024.

Segment Reporting

The Company’s operations are solely in the financial services industry and include providing traditional banking and other financial services to its customers.

The Company operates throughout New Jersey and in the major metropolitan markets of Philadelphia, New York, Baltimore, and Boston .

Management makes operating decisions and assesses performance based on an ongoing review of the Company’s consolidated financial results.

Therefore, management concluded the Company has a single operating segment for financial reporting purposes.

The Company’s operations are solely in the financial services industry and provides a range of regional community banking services to retail and commercial customers.

The Company operates throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia.

Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker (“CODM”).

The Company’s CODM is the Chairman and Chief Executive Officer.

The CODM makes operating decisions and manages the activities of the business on a consolidated basis.

Therefore, management concluded the Company has a single operating segment, and therefore one reportable segment.

Further, the CODM allocates resources and assesses performance based on an ongoing review of the Company’s consolidated financial results.

Specifically, the CODM reviews net income, reported within the consolidated statements of income, along with information in consolidated statement of financial condition to decide whether to reinvest profits into the Company or other strategic investments.

Refer to the Consolidated Statements of Financial Condition and Consolidated Statements of Income for net income and all significant expenses regularly provided to and reviewed by the CODM.

Earnings Per Share

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Stock-Based Compensation

The Company recognizes compensation expense related to stock options and awards over the requisite service period, generally based on the instruments’ grant-date fair value, reduced by actual and estimated forfeitures.

The Company recognizes compensation expense related to stock options and awards, including market-based performance awards, over the requisite service period, generally based on the instruments’ grant-date fair value, reduced by actual and estimated forfeitures.

Certain performance-based stock awards and the associated compensation expense fluctuates based on the estimated probability of achievement of the Company-defined performance goals.

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For derivatives designated as hedging instruments, the accounting treatment is dependent upon the type of hedge.

For the year ended December 31, 2023 , the Company only had a cash flow hedge.

The Company only has a cash flow hedge.

Cash flow hedges are used to mitigate the variability in the cash flows of a specific pool of assets, or of forecasted transactions, caused by interest rate fluctuations.

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Accounting Pronouncements Adopted in 2024

In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-01 “Derivatives and Hedging (Topic 815):

Fair Value Hedging – Portfolio Layer Method”, which made targeted improvements to the optional hedge accounting model with the objective of improving hedge accounting to better portray the economic results of an entity’s risk management activities in its financial statements.

This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2022.

Early adoption is permitted for any entity that has adopted the amendments in ASU 2017-12 for the corresponding period.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements, as the Company currently does not have any fair value hedges.

In March 2022, FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures”.

The amendments in this ASU were issued to (1) eliminate accounting guidance for TDRs by creditors, while enhancing disclosure requirements for loan refinancings and restructurings when a borrower is experiencing financial difficulty;

(2) require disclosures of current period gross write-offs by year of origination for financing receivables and net investments in leases.

For entities that have adopted the amendments in ASU 2016-13, Measurement of Credit Losses on Financial Instruments, this update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2022.

In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

In addition, this update introduces new disclosure requirements to provide information about the contractual sales restriction including the nature and remaining duration of the restriction.

This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023.

The Company adopted this standard in 2024.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In March 2023, FASB issued ASU 2023-02, “Investments - Equity Method and Joint Venture (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”.

The amendments in this ASU permit reporting entities to account for the tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method.

This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023.

The Company adopted this standard in 2024.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In November 2023, FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”.

The amendments in this ASU require improved reportable segment information on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses.

This update will be effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments in this ASU should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where there is an option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption.

The Company adopted this guidance prospectively, and the adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In December 2022, FASB issued ASU 2022-06, “Deferral of the Sunset Date of Topic 848”, which was effective upon issuance.

The amendments in this ASU defer the sunset date of Topic 848 (Reference Rate Reform) from December 31, 2022 to December 31, 2024.

Topic 848, originally issued in 2020 and later amended in 2021, provides optional accounting expedients and exceptions for certain loan agreements, derivatives and other transactions affected by the transition away from London Inter-Bank Offered Rate (“LIBOR”) towards alternative reference rates.

As of December 31, 2021, the Company adopted certain of these practical expedients in Topic 848 and will continue to apply prospectively until December 31, 2024.

The Company adopted this standard in 2024.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Transition from LIBOR

As of December 31, 2021, the Company ceased issuing LIBOR-based products and transitioned to Alternative Rates.

For the tenors of U.S.

dollar LIBOR utilized by the Company, the administrator of LIBOR extended publication until June 30, 2023, which was the cessation date.

The Company has transitioned all of its previously existing LIBOR-based products.

For products which were not expected to mature or settle prior to the cessation date, the Company reviewed and updated contract language as necessary to automatically convert to an Alternative Rate at their next rate reset date with no action required.

Regulatory Matters

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

The Company and the Bank are required by applicable regulations to maintain minimum levels of regulatory capital.

Under the regulations in effect at December 31, 2024, the Company and the Bank were required to maintain a minimum ratio of Tier 1 capital to total average assets of 4.0 %;

a minimum ratio of common equity Tier 1 capital to risk-weighted assets of 7.0 %;

minimum ratio of common equity Tier 1 capital to risk-weighted assets of 7.0 %;

a minimum ratio of Tier 1 capital to risk-weighted assets of 8.5 %;

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Business Combinations

Trident Acquisition

On April 1, 2022, the Company completed its acquisition of a majority controlling interest of 60 % in Trident.

Trident provides commercial and residential title services throughout New Jersey, and through strategic alliances can also service clients’ title insurance needs outside of New Jersey.

The acquisition is complimentary to the Company’s existing consumer and commercial lending business.

Total consideration paid was $ 7.1 million and goodwill from the transaction amounted to $ 5.8 million.

The Company consolidated Trident’s assets, liabilities and components of comprehensive income within its consolidated results.

Thus, the consolidated results include amounts attributable to the Company and the non-controlling interest.

Amounts attributable to the non-controlling interest are presented separately as a single line on the Consolidated Statements of Income (net income attributable to non-controlling interest) and the Consolidated Statements of Financial Condition (non-controlling interest in stockholders’ equity).

Amounts attributed to the non-controlling interest are based upon the ownership interest in Trident that the Company does not own.

For further discussion on the accounting for this arrangement refer to Note 18 Variable Interest Entity, of this Form 10-K.

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed by the Company at the date of the acquisition for Trident, net of total consideration paid (in thousands):

At April 1, 2022

Total purchase price:

Assets acquired:

Cash and cash equivalents $ 45,693

Other current and non-current assets 1,116

Total assets acquired 46,809

Liabilities assumed:

Lease liability 779

Other liabilities 43,937

Total liabilities assumed $ 44,716

Net assets acquired $ 2,093

Net assets attributable to non-controlling interest $ 836

Goodwill recorded $ 5,827

The calculation of goodwill was subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties became available, and was finalized as of December 31, 2022.

Merger Related Expenses

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Professional fees 1,506 12 1,936

Employee severance payments — 7 663

Other/miscellaneous fees 273 — 9

Merger related expenses $ 1,779 $ 22 $ 2,735

Merger related expenses for 2024 primarily include expenses related to the acquisition of Spring Garden, which was completed on October 1, 2024.

Merger related expenses for 2022 included expenses related to the terminated merger agreement with Partners Bancorp.

Merger related expenses for 2021 included expenses related to acquisitions of Two River and Country Bank, which were both completed on January 1, 2020.

Core Deposit Intangibles

The estimated future amortization expense for the core deposit intangibles over the next five years and thereafter is as follows (in thousands):

Spring Garden Acquisition

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

The acquisition is complimentary to the Company’s existing products and will expand the Company’s specialty finance offerings.

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

The acquisition was accounted for under the acquisition method of accounting.

Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values.

The excess of consideration paid over the estimated fair value of the net assets acquired has been recorded as goodwill.

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed by the Company at the date of the acquisition for Spring Garden, net of total consideration paid (in thousands):

At October 1, 2024

Total consideration paid (1)

Assets acquired:

Cash and cash equivalents $ 68

Loans 140,062

Other real estate owned 1,666

Premises and equipment 157

Other assets 1,122

Customer relationship intangible 6,500

Total assets acquired 149,575

Liabilities assumed:

Other liabilities 4,033

Total liabilities assumed 4,033

Net assets acquired $ 145,542

Goodwill recorded $ 17,162

(1) Cash consideration paid was $ 68 million.

The difference between the cash and total consideration paid includes adjustments for the settlement of pre-existing relationships.

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available.

While the calculation of goodwill is subject to change, the Company finalized its review of the acquired assets and liabilities and will not be recording any further adjustments to the carrying value.

Fair Value Measurement of Assets Acquired and Liabilities Assumed

The methods used to determine the fair value of the assets acquired and liabilities assumed in the Spring Garden acquisition were as follows.

Refer to Note 15 Fair Value Measurements, for a discussion of the fair value hierarchy.

The acquired loan portfolio was valued utilizing Level 3 inputs and included the use of present value techniques employing cash flow estimates and incorporated assumptions that marketplace participants would use in estimating fair values.

In instances where reliable market information was not available, the Company used its own assumptions in an effort to determine reasonable fair value.

Specifically, the Company utilized three separate fair value analyses which a market participant would employ in estimating the total fair value adjustment.

The three separate fair valuation methodologies used were:

(1) interest rate loan fair value analysis;

(2) general credit fair value adjustment;

and (3) specific credit fair value adjustment.

To prepare the interest rate fair value analysis, market rates for similar loans were obtained from various external data sources and reviewed by the Company’s management for reasonableness.

The weighted average of these rates was used as the fair value interest rate a market participant would utilize.

A present value approach was utilized to calculate the interest rate fair value adjustment.

The general credit fair value adjustment was calculated using expected lifetime losses and estimated fair value adjustments for qualitative factors.

The expected lifetime losses were calculated using an average of historical losses of the loan portfolio amongst peer groups were deemed appropriate.

The adjustment related to qualitative factors, if any, was impacted by general economic conditions.

To calculate the specific credit fair value adjustment, the Company identified loans that experienced more-than-insignificant deterioration in credit quality since origination.

Loans meeting this criteria were reviewed by comparing the contractual cash flows to expected collectible cash flows.

The aggregate expected cash flows less the acquisition date fair value resulted in an accretable yield amount which will be recognized over the life of the loans.

Customer Relationship Intangible

The customer relationship intangible asset represents the value associated with the commercial construction business that was acquired, which was valued using the multi-period excess earnings method under the income approach.

The customer relationship intangible totaled $ 6.5 million, and is being amortized over its estimated useful life of approximately 7 years.

The estimated future amortization expense for core deposit intangible and customer relationship intangible over the next five years and thereafter are as follows (in thousands):

For the Year Ending December 31, Amortization Expense

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Asset-backed securities 295,796 — ( 4,252 ) 291,544 —

Agency commercial MBS 110,606 — ( 18,017 ) 92,589 —

Mortgage-backed securities:

Agency residential 298,107 183 ( 97 ) 298,193 —

Agency commercial 109,590 — ( 15,255 ) 94,335 —

Total mortgage-backed securities 407,697 183 ( 15,352 ) 392,528 —

Total debt securities available-for-sale $ 780,079 $ 194 $ ( 26,381 ) $ 753,892 $ —

Debt securities held-to-maturity:

State, municipal and sovereign debt obligations $ 260,249 $ 46 $ ( 24,940 ) $ 235,355 $ ( 60 )

State and municipal debt obligations $ 222,009 $ 251 $ ( 14,550 ) $ 207,710 $ ( 39 )

Corporate debt securities 69,809 391 ( 3,941 ) 66,259 ( 987 )

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Total debt securities $ 1,940,947 $ 1,747 $ ( 120,364 ) $ 1,822,330 $ ( 1,133 )

(1) The amortized cost for held-to-maturity securities included net unrealized losses of $ 1.8 million and $ 2.3 million, at December 31, 2023 and 2022, respectively, related to securities transferred from available-for-sale to held-to-maturity in prior years.

These unrealized losses continue to be reflected within accumulated other comprehensive income, net of subsequent amortization, which is to be recognized over the life of the securities.

There was no allowance for securities credit losses on debt securities available-for-sale at December 31, 2023 and 2022.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the years ended December 31, 2024 and 2023 (in thousands):

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Beginning balance $ ( 1,133 ) $ ( 1,128 )

(Provision) benefit for credit losses ( 5 ) 339

Benefit (provision) for credit losses 166 ( 5 )

Total ending allowance balance $ ( 967 ) $ ( 1,133 )

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Total debt securities held-to-maturity $ 272,204 $ 14,661 $ 286,865

There were $ 697,000 and $ 108,000 of realized losses on sale of debt securities available-for-sale for the years ended December 31, 2023 and December 31, 2022, respectively.

The realized gains/losses on debt securities is presented within Other under Total other income of the Consolidated Statements of Income.

There were $ 156,000 , $ 697,000 and $ 108,000 of realized losses on sale of debt securities available-for-sale for the years ended December 31, 2024, 2023 and 2022 respectively.

The realized losses on debt securities is presented within Other under Total other income of the Consolidated Statements of Income.

The amortized cost and estimated fair value of debt securities at December 31, 2024 by contractual maturity are shown below (in thousands):

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Asset-backed securities — — 291,544 ( 4,252 ) 291,544 ( 4,252 )

Agency commercial MBS 8,782 ( 1,675 ) 83,807 ( 16,342 ) 92,589 ( 18,017 )

Agency residential 169,000 ( 97 ) — — 169,000 ( 97 )

Agency commercial — — 94,335 ( 15,255 ) 94,335 ( 15,255 )

Total MBS 169,000 ( 97 ) 94,335 ( 15,255 ) 263,335 ( 15,352 )

Total debt securities available-for-sale 171,376 ( 264 ) 451,856 ( 26,117 ) 623,232 ( 26,381 )

Debt securities held-to-maturity:

State, municipal and sovereign debt obligations 133,492 ( 11,952 ) 97,135 ( 12,988 ) 230,627 ( 24,940 )

State and municipal debt obligations 6,671 ( 23 ) 191,511 ( 14,527 ) 198,182 ( 14,550 )

Corporate debt securities 3,084 ( 473 ) 58,386 ( 3,468 ) 61,470 ( 3,941 )

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There were no defaults on principal or interest payments, and no interest payments were deferred.

Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security.

Furthermore, the net unrealized losses were primarily due to changes in the general credit and interest rate environment and not credit

Based on management’s analysis of each individual

security, the issuers appear to have the ability to meet debt service requirements over the life of the security.

Furthermore, the net unrealized losses were primarily due to changes in the general credit and interest rate environment and not credit quality.

Additionally, the Company has not utilized securities sales as a source of liquidity and the Company’s liquidity plans include adequate sources of liquidity outside securities sales.

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2024 2023 2022

Net (loss) gain on equity investments $ ( 3,732 ) $ 9,685 $ 7,145

Net gain (loss) on equity investments $ 4,225 $ ( 3,732 ) $ 9,685

Net (losses) gains recognized on equity investments sold ( 49 ) ( 5,462 ) 1,351

Unrealized gains (losses) recognized on equity investments still held $ 1,730 $ 8,334 $ ( 978 )

Unrealized gains recognized on equity investments still held $ 4,274 $ 1,730 $ 8,334

Loans Receivable, Net

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Balance at beginning of year $ 27,899 $ 4,354 $ 6,867 $ 27,029 $ 988 $ 67,137

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

Provision (benefit) for credit losses 1,774 ( 569 ) 3,586 428 259 5,478

Charge-offs ( 1,659 ) — — ( 76 ) ( 485 ) ( 2,220 )

( 8,350 ) ( 6 ) ( 129 ) — ( 208 ) ( 8,693 )

Recoveries 219 32 18 206 190 665

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Balance at beginning of year $ 21,070 $ 4,423 $ 5,695 $ 24,530 $ 1,106 $ 56,824

(Benefit) provision for credit losses ( 4,481 ) ( 1,569 ) 561 13,275 ( 152 ) 7,634

Provision (benefit) for credit losses 15,173 ( 77 ) 1,276 2,456 ( 133 ) 18,695

Charge-offs ( 8,350 ) ( 6 ) ( 129 ) — ( 208 ) ( 8,693 )

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Balance at end of year $ 27,899 $ 4,354 $ 6,867 $ 27,029 $ 988 $ 67,137

(1) Gross charge-offs for the year ended December 31, 2023 of $ 8.7 million, primarily related to one commercial relationship, which was originated in 2019 and had a partial charge-off of $ 8.4 million.

The remainder of the current year gross charge-offs were related to loans that were originated in and prior to 2018.

The following tables summarize gross charge-offs by vintage (in thousands):

2023 2022 2021 2019 and prior Total

For the Year Ended December 31, 2024

Commercial real estate – investor (1)

$ — $ ( 13 ) $ ( 46 ) $ ( 1,600 ) $ ( 1,659 )

Residential real estate ( 33 ) ( 41 ) — ( 2 ) ( 76 )

Other consumer — — — ( 485 ) ( 485 )

Total charge-offs $ ( 33 ) $ ( 54 ) $ ( 46 ) $ ( 2,087 ) $ ( 2,220 )

2019 2018 and prior Total

For the Year Ended December 31, 2023

Commercial real estate – investor (1)

$ ( 8,350 ) $ — $ ( 8,350 )

Commercial real estate – owner occupied — ( 6 ) ( 6 )

Commercial and industrial — ( 129 ) ( 129 )

Other consumer — ( 208 ) ( 208 )

Total charge-offs $ ( 8,350 ) $ ( 343 ) $ ( 8,693 )

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

This was resolved via sale of collateral during 2024.

A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral and, therefore, is classified as non-accruing.

At December 31, 2024 and 2023, the Company had collateral dependent loans with an amortized cost balance as follows:

commercial real estate - investor of $ 15.2 million and $ 4.6 million, respectively, commercial real estate - owner occupied of $ 352,000 and $ 4.0 million, respectively, and commercial and industrial of $ 304,000 and $ 160,000 , respectively.

In addition, the Company had residential and consumer loans collateralized by residential real estate, which are in the process of foreclosure, with an amortized cost balance of $ 2.6 million and $ 858,000 at December 31, 2023 and 2022, respectively.

commercial real estate - investor of $ 11.8 million and $ 15.2 million, respectively, commercial real estate - owner occupied of $ 4.8 million and $ 352,000 , respectively, and commercial and industrial of $ 32,000 and $ 304,000 , respectively.

In addition, the Company had collateral dependent residential and consumer loans with an amortized cost balance of $ 8.6 million and $ 2.6 million at December 31, 2024 and 2023, respectively.

The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of December 31, 2024 and 2023 (in thousands):

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$ 35,527 $ 29,548

(1) At December 31, 2023, non-performing loans included the remaining exposure of $ 8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.

(1) December 31, 2024 includes the addition of $ 4.8 million non-accrual loans related to the acquisition of Spring Garden.

(2) December 31, 2023 includes the exposure of $ 8.4 million of the single commercial real estate relationship resolved during 2024.

At December 31, 2024 and 2023, non-accrual loans were included in the allowance for credit loss calculation and the Company did not recognize or accrue interest income on these loans.

At December 31, 2023, there were no loans that were past due 90 days or greater and still accruing interest.

At December 31, 2022, there was one Paycheck Protection Program (“PPP”) loan for $ 14,000 that was past due 90 days or greater and still accrued interest, which subsequently became current.

Per SBA guidelines, the SBA will pay accrued interest through the deferral period up to a maximum of 120 days past due.

Given these servicing guidelines, PPP loans that are 90 to 120 days past due will be reported as accruing loans.

At December 31, 2024 and 2023, there were no loans that were past due 90 days or greater and still accruing interest.

The following table presents the aging of the recorded investment in past due loans as of December 31, 2024 and 2023 by loan portfolio segment (in thousands):

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Commercial real estate – investor (2)

$ 978 $ 684 $ 15,201 $ 16,863 $ 5,337,111 $ 5,353,974

Commercial real estate – owner occupied 335 352 293 980 942,911 943,891

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$ 17,206 $ 1,996 $ 20,886 $ 40,088 $ 10,154,507 $ 10,194,595

(1) At December 31, 2023, 90 days or greater past due loans included the remaining exposure of $ 8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.

(1) December 31, 2024 includes the addition of $ 7.4 million past due loans related to the acquisition of Spring Garden.

(2) December 31, 2023 includes the exposure of $ 8.4 million of the single commercial real estate relationship resolved during 2024 .

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company adopted ASU 2022-02 on January 1, 2023.

Since adoption, the Company has modified certain loans to borrowers experiencing financial difficulty.

Since adoption, the Company has modified and may modify in the future certain loans to borrowers experiencing financial difficulty.

These modifications may include a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay.

At December 31, 2023, loans with modifications to borrowers experiencing financial difficulty totaled $ 8.9 million related to term extensions and interest rate reductions, which included one commercial real estate - investor relationship of $ 7.8 million, residential real estate loans of $ 715,000 and other consumer loans of $ 471,000 .

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table provides the performance of loans as of December 31, 2023, which have been modified since adoption (dollars in thousands):

Payment Status

Current 60 - 89 Days Past Due 90 Days or Greater past Due

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is subsequently adjusted by an amount equal to the total loss rate as applied to the reduced amortized cost basis.

As of December 31, 2024 and 2023, loans with modifications to borrowers experiencing financial difficulty totaled $ 30.9 million and $ 8.9 million, respectively.

There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of December 31, 2024 or December 31, 2023.

The following table presents loans modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023 (in thousands):

Term Extension Interest Rate Reduction Combination of Term Extension and Interest Rate Reduction Other Than Insignificant Payment Delay Combination of Term Extension, Interest Rate Reduction and Other Than Insignificant Payment Delay Total % of Total by Loan Portfolio Segment

For the Year Ended December 31, 2024

Commercial real estate – investor $ — $ 4,858 $ 7,000 $ 5,685 $ 1,604 $ 19,147 0.36 %

Commercial real estate – owner occupied — — — 2,822 — 2,822 0.31

Residential real estate 128 — — — — 128 —

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$ 128 $ 4,858 $ 7,146 $ 8,507 $ 1,604 $ 22,243 0.22 %

Prior to the adoption of ASU 2022-02, the Company classified certain loans as TDR loans when credit terms to a borrower in financial difficulty were modified in accordance with ASC 310-40.

Since adoption of this ASU, the Company has ceased to recognize or measure for new TDRs but those existing at December 31, 2022 remain until settled.

At December 31, 2023 and 2022, TDR loans totaled $ 12.8 million and $ 13.9 million, respectively.

At December 31, 2023 and 2022, there were $ 5.7 million and $ 6.4 million, respectively, of TDR loans included in the non-accrual loan totals.

At December 31, 2023 and 2022, the Company had a $ 282,000 and $ 590,000 , respectively, of specific reserve allocated to one loan that was classified as a TDR loan.

Non-accrual loans which become TDR loans are generally returned to accrual status after six months of performance.

In addition to the TDR loans included in non-accrual loans, the Company also has TDR loans classified as accruing loans, which totaled $ 7.1 million and $ 7.5 million at December 31, 2023 and 2022, respectively.

The following table presents information about TDR loans which occurred during the year ended December 31, 2022 (dollars in thousands):

of Loans Pre-modification

Recorded Investment Post-modification

Recorded Investment

For the Year Ended December 31, 2023

Troubled debt restructurings:

Commercial and industrial 1 $ 65 $ 65

Commercial real estate – investor $ — $ — $ 7,759 $ — $ — $ 7,759 0.14 %

Residential real estate 715 — — — — 715 0.02

Other consumer 275 — 196 — — 471 0.19

There were no TDR loans that defaulted during the year ended December 31, 2023, which were modified within the preceding year.

$ 990 $ — $ 7,955 $ — $ — $ 8,945 0.09 %

The modifications during the periods presented had an insignificant financial effect on the Company.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table provides the performance of loans modified to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024 and since adoption of the standard for December 31, 2023 (in thousands):

Current 60 - 89 Days Past Due 90 Days or Greater Past Due Total

December 31, 2024

Commercial real estate – investor $ 19,147 $ — $ — $ 19,147

Commercial real estate – owner occupied 2,822 — — 2,822

Residential real estate — — 128 (1)

Other consumer — — 146 (1)

$ 21,969 $ — $ 274 $ 22,243

December 31, 2023

Commercial real estate – investor $ 7,759 $ — $ — $ 7,759

Residential real estate 419 156 140 (2)

Other consumer 471 — — 471

$ 8,649 $ 156 $ 140 $ 8,945

(1) Represents one residential loan and one other consumer loan that defaulted during the year ended December 31, 2024, which had been modified within the last 12 months.

(2) Represents one residential loan that defaulted during the year ended December 31, 2023, which had been modified since the adoption of the standard.

Interest and Dividends Receivable

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Total premises and equipment, net $ 115,256 $ 121,372

Depreciation and amortization expense amounted to $ 11.5 million for both years ended December 31, 2023 and 2022, while it amounted to $ 9.4 million for the year ended December 31, 2021.

Depreciation and amortization expense amounted to $ 10.9 million for the year ended December 31, 2024 and $ 11.5 million for both years ended December 31, 2023 and 2022.

Depreciation and amortization expense is presented within occupancy, equipment, and data processing expenses of the Consolidated Statements of Income.

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Total borrowed funds $ 1,330,724 4.71 % $ 1,118,240 5.04 %

The Company had no FHLB overnight advances and no borrowings from the FRB Discount Window or Bank Term Funding Program at December 31, 2023 and December 31, 2022.

At December 31, 2024, there were $ 1.07 billion of FHLB term advances as compared to $ 848.6 million at December 31, 2023.

There were no overnight borrowings from the FHLB for both December 31, 2024 and 2023.

FHLB advances and repurchase agreements had contractual maturities at December 31, 2024 as follows (in thousands):

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2027 200,501 —

2027 200,000 —

Total $ 1,072,611 $ 60,567

20 unchanged sentences

(2) All trust preferred debts carry interest rates which adjust to a spread over SOFR.

The 3-month tenor increased 0.26 % related to the conversion from LIBOR to SOFR.

The 3-month tenor increased 0.26 % related to the conversion from London Inter-Bank Offered Rate (“LIBOR”) to SOFR.

All of the trust preferred debt is currently callable.

3 unchanged sentences

FHLB advances $ 35,686 $ 46,000 $ 10,365

Reverse repurchase agreements 931 159 253

Securities sold under agreements to repurchase with customers 1,893 931 159

Other borrowings 28,426 19,294 12,153

11 unchanged sentences

Total pledged assets $ 7,255,671 $ 1,154,974 $ 8,410,645

The securities pledged, which collateralize the repurchase agreements are delivered to the lender, with whom each transaction is executed, or to a third-party custodian.

The lender, who may sell, loan or otherwise dispose of such securities to other parties in the normal course of their operations, agrees to resell to the Company substantially the same securities at the maturity of the repurchase agreements.

The securities that collateralize the repurchase agreements are delivered to the lender, with whom each transaction is executed, to a third-party custodian, or held at the Company.

The lender agrees to resell to the Company substantially the same securities at the maturity of the repurchase agreements.

The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands):

9 unchanged sentences

Included in other comprehensive income was the income tax impact attributable to the unrealized gain/loss on debt securities, accretion of unrealized losses on debt securities reclassified to held-to-maturity, unrealized loss on derivative hedges and the related reclassification adjustments included in net income.

These items resulted in a tax expense of $ 4.9 million for the year ended December 31, 2023 and a tax benefit of $ 10.4 million a nd $ 870,000 for the years ended December 31, 2022 and 2021 , respectively.

These items resulted in a tax expense of $ 1.8 million and $ 4.9 million for the years ended December 31, 2024 and 2023, respectively, and a tax benefit of $ 10.4 million for the year ended December 31, 2022.

The income tax provision reconciled to the income taxes that would have been computed at the statutory federal rate for the years ended December 31, 2024, 2023 and 2022 is as follows (dollars in thousands):

10 unchanged sentences

Stock compensation 391 ( 298 ) 26

Reclassification of certain tax effect from accumulated other comprehensive income ( 94 ) ( 157 ) ( 173 )

Alternative minimum tax write-off 1,196 — —

Research and development and other credits ( 735 ) ( 557 ) ( 471 )

22 unchanged sentences

Investments, discount accretion ( 185 ) ( 73 )

Other, net ( 402 ) —

Total gross deferred tax liabilities ( 12,771 ) ( 12,383 )

1 unchanged sentence

The Company has federal net operating losses from the acquisitions of Colonial American Bank (“Colonial American”) and Sun Bancorp, Inc.

At December 31, 2023 and 2022, the net operating losses from Colonial American were $ 3.6 million and $ 3.9 million, respectively.

At December 31, 2024 and 2023, the net operating losses from Colonial American were $ 3.3 million and $ 3.6 million, respe ctively.

These net operating losses are subject to annual limitation under Code Section 382 of approximately $ 22,000 , and will expire between 2029 and 2034.

2 unchanged sentences

These net operating losses will expire between 2029 and 2036.

At both December 31, 2023 and 2022, the Company had $ 1.2 million and $ 2.3 million, respectively, of Alternative Minimum Tax tax credits that were part of the Sun acquisition.

At December 31, 2024 and 2023, the Compan y had $ 0 and $ 1.2 million, re spectively, of Alternative Minimum Tax credits that were part of the Sun acquisition.

These credits are subject to the same Code Section 382 limitation as indicated above but do not expire.

During 2024, the Company wrote off the remaining tax credits of $ 1.2 million.

At December 31, 2024, 2023 and 2022 , the Company determined that it is not required to establish a valuation reserve for the remaining net deferred tax assets since it is “more likely than not” that the net deferred tax assets will be realized through future reversals of existing taxable temporary differences, future taxable income and tax planning strategies.

7 unchanged sentences

However, such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions.

The Company is currently under examination by the New York State Department of Taxation and Finance in connection with the 2019 to 2021 tax years.

As of December 31, 2023, the Company has not received any notices of proposed adjustments from this audit.

As of December 31, 2024, the Company is not under examination in connection to any tax years.

The tax years that remain subject to examination by the federal government and most state or city tax authorities include the tax years 2021 and forward.

With the enactment of the Tax Reform on December 22, 2017, the federal corporate income tax rate was reduced from 35% to 21% effective January 1, 2018.

Accounting guidance required that the effect of income tax law changes on deferred taxes be recognized as a component of income tax expense related to continuing operations, but also to items initially recognized in other comprehensive income.

As a result of the reduction in the U.S.

federal statutory income tax rate, the Company recognized an additional income tax benefit of $ 1.9 million for the year ended December 31, 2018 and additional income tax expense of $ 3.6 million for the year ended December 31, 2017.

Because accounting guidance requires the effect of income tax law changes on deferred taxes to be recognized as a component of income tax expense related to continuing operations, this additional income tax expense included $ 1.8 million related to items recognized in other comprehensive income.

These amounts will continue to be reported as separate components of accumulated other comprehensive income until such time as the underlying transactions from which such amounts arose are settled through continuing operations.

At such time, the reclassification from accumulated other comprehensive income will be recognized as a net tax benefit.

The Company incurred income tax expense of $ 1.8 million recognized in other comprehensive income related to Tax Reform in 2018.

These amounts have been reported as separate components of accumulated other comprehensive income and reclassified and recognized as a net tax benefit in the periods in which the underlying transactions are settled through continuing operations.

The amount included in accumulated other comprehensive income at December 31, 2024, subject to reclassification, was $ 295,000 .

6 unchanged sentences

Over the years, the ESOP has borrowed from the Company to purchase shares of common stock.

During 2023, the ESOP had two outstanding loan agreements with the Bank (“the 2018 loan” and “the 2021 loan”).

During 2024, the ESOP had one outstanding loan agreement with the Bank (“the 2018 loan”), while during 2023 the ESOP had two outstanding loan agreements with the Bank (“the 2018 loan” and “the 2021 loan”).

The 2018 loan originally allowed the ESOP to borrow an additional $ 8.4 million from the Company at a fixed interest rate of 3.25 %, which matures on December 31, 2026, to purchase 292,592 shares of common stock.

1 unchanged sentence

Both loans are to be repaid from contributions by the Bank to the ESOP trustee.

The Bank is required to make contributions to the ESOP in amounts at least equal to the principal and interest requirement of both debts.

The Bank is required to make contributions to the ESOP in amounts at least equal to the principal and interest requirement of the debt.

The Bank’s obligation to make such contributions is reduce d to the extent of any dividends paid by the Company on unallocated shares and any investment earnings realized on such dividends.

As of December 31, 2023 and 2022, contributions to the ESOP, which were used to fund principal and interest payments on the ESOP loans, both totaled $ 2.7 million .

As of December 31, 2024 and 2023, contributions to the ESOP, which were used to fund principal and interest payments on the ESOP loans, totaled $ 1.5 million and $ 2.7 million, respectively .

During 2024 and 2023, $ 158,000 and $ 254,000 , respectively, of dividends paid on unallocated ESOP shares were used for debt service.

2 unchanged sentences

The unamortized balance of the ESOP is shown as unallocated common stock held by the ESOP and is reflected as a reduction of stockholders’ equity.

For the year ended December 31, 2023, the Bank recorded compensation expense related to the ESOP of $ 2.1 million which included $ 341,000 related to a decrease in compensation expense to reflect the decrease in the average fair value of shares committed to be released and allocated shares below the Bank’s cost.

For the years ended December 31, 2022, and 2021, the Bank recorded compensation expense related to the ESOP of $ 2.5 million and $ 2.2 million, respectively, which included $ 82,000 and $ 179,000 , respectively, of additional compensation expense to reflect the increase in the average fair value of shares committed to be released and allocated shares in excess of the Bank’s cost.

For the year ended December 31, 2024 and 2023, the Bank recorded compensation expense related to the ESOP of $ 1.1 million and $ 2.1 million, respectively, which included $ 124,000 and $ 341,000 related to a decrease in compensation to reflect the decrease in the average fair value of shares committed to be released and allocated shares below the Bank’s cost .

For the year ended December 31, 2022, the Bank recorded compensation expense related to the ESOP of $ 2.5 million, which included $ 82,000 of additional compensation expense to reflect the increase in the average fair value of shares committed to be released and allocated shares in excess of the Bank’s cost.

As of December 31, 2024, 2,885,479 shares had been allocated to participants and 65,916 shares were committed to be released for services rendered in 2024.

2 unchanged sentences

The Company has established these plans to attract and retain qualified personnel in key positions, provide officers, employees, and non-employee directors with a proprietary interest in the Company as an incentive to contribute to the success of the Company, align the interests of management with those of other stockholders and reward employees for outstanding performance.

All officers, other employees, and non-employee directors of the Company and its affiliates are eligible to receive awards under the plans.

Equity awards are discretionary and are targeted to a broad range of employees, including those in leadership roles, revenue generators, key contributors, and high-potential individuals who have contributed to the Company’s long-term strategic objectives.

Overview of Incentive Plans

The OceanFirst Financial Corp.

2011 Stock Incentive Plan, which authorized the granting of stock options or awards of common stock, was approved by stockholders in 2011.

This plan was subsequently amended in 2017 to increase the number of authorized shares available for grant and to update the performance goals under which performance-based awards may be granted.

The OceanFirst Financial Corp.

2020 Stock Incentive Plan, which also authorized the granting of stock options or awards of common stock, was approved by stockholders in 2020.

This plan was subsequently amended in 2021 to increase the number of shares authorized for issuance through equity awards.

The following table presents the amount of the plans’ authorized shares and those that remain available for issuance as of December 31, 2023.

Both plans allowed the Company to authorize shares subject to options or, in lieu of options, shares in the form of stock awards.

The following table presents the amount of the plan’s authorized shares and those that remain available for issuance as of December 31, 2024.

The Plan allowed the Company to authorize shares subject to options or, in lieu of options, shares in the form of stock awards.

Authorized Awards Authorized but Not Issued

1 unchanged sentence

2020 Plan 6,950,000 2,780,000 2,734,577 1,093,830

2011 Plan (1)

4,000,000 1,600,000 248,013 99,205

Total 10,950,000 4,380,000 4,070,746 1,628,298

(1) The 2011 Stock Incentive Plan expired and the Company will not issue any further shares from this plan.

The Company grants time-based and performance-based restricted stock awards.

Time-based awards vest ratably, and generally have a three - to five-year vesting period.

Performance-based stock awards, which are granted to certain senior executives, vest based on the estimated probability of achievement of defined tiered performance goals or include market-based conditions.

Tiered performance goals for each metric are aligned with corresponding tiered vesting values and have been set using financial data from the applicable strategic plan as approved by the Board.

Performance-based stock awards, which are granted to certain senior executives and senior management employees, vest based on the estimated probability of achievement of defined tiered performance goals or include market-based conditions.

Performance-based stock awards have tiered performance goals for each metric and are aligned with corresponding tiered vesting values.

Performance-based stock awards have been set using financial data from the applicable strategic plan as approved by the Board, or based on financial metrics relative to the peer index.

The Company granted performance-based stock awards in 2024, 2023 and 2022.

The 2023 and 2022 performance-based stock awards were issued with a three year cliff vesting schedule and the 2021 performance-based stock awards vest in equal amounts over a four year period.

The 2023 and 2022 performance-based stock awards include a market-based condition.

The 2024 performance-based stock awards were issued with a three year cliff vesting schedule or vest ratably over a four year period.

The 2023 and 2022 performance-based stock awards were issued with a three year cliff vesting schedule.

Certain 2024, 2023 and 2022 performance-based stock awards include a market-based condition.

The fair value of these awards were estimated through the use of the Monte Carlo valuation model at the time of grant, applying the following assumptions:

2024 2023 2022

Risk-free interest rate 4.47 % 4.56 % 1.36 %

Expected performance period 2.8 years 2.9 years

Expected performance period 2.8 years 2.8 years 2.9 years

Expected volatility 34.00 % 35.80 % 41.10 %

31 unchanged sentences

Options exercisable 1,528,067 $ 23.01 1,663,506 $ 22.58 1,645,901 $ 21.57

The following table summarizes information about stock options outstanding at December 31, 2023:

Options Outstanding Options Exercisable

Exercise Prices Number

Options Weighted

Life Weighted

Options Weighted

Life Weighted

$ 12.72 to $ 16.79

12,500 1.2 years $ 14.10 12,500 1.2 years $ 14.10

16.80 to 20.86

1,108,815 3.9 19.27 875,029 3.3 18.95

20.87 to 24.93

30,005 2.2 22.69 30,005 2.2 22.69

24.94 to 29.01

818,119 4.0 26.82 745,972 3.9 26.98

1,969,439 3.9 years $ 22.42 1,663,506 3.5 years $ 22.58

The aggregate intrinsic value for both stock options outstanding and stock options exercisable at December 31, 2024 was $ 253,000 .

The weighted average remaining contractual life of stock options outstanding and stock options exercisable at December 31, 2024 was 3.26 years and 3.13 years, respectively.

Phantom Stock Units

33 unchanged sentences

At December 31, 2024, the Company is obligated under noncancelable operating leases and rental agreements for premises and equipment.

Rental and lease expense under these leases were $ 5.7 million, $ 6.3 million, and $ 7.2 million for the years ended

December 31, 2023, 2022 and 2021, respectively.

Rental and lease expense under these leases were $ 5.8 million, $ 5.7 million , and $ 6.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Refer to Note 17 Leases for the projected minimum lease commitments as of December 31, 2024.

The Company grants residential real estate and first mortgage commercial real estate loans to borrowers primarily located throughout New Jersey and the major metropolitan markets of Philadelphia, New York, Baltimore, and Boston.

The Company grants residential real estate and first mortgage commercial real estate loans to borrowers primarily located throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia.

The ability of borrowers to repay their obligations is dependent upon various factors including the borrowers’ income, net worth, cash flows generated by the underlying collateral, value of the underlying collateral, and priority of the Company’s lien on the property.

51 unchanged sentences

Equity investments without readily determinable fair values are carried at cost less impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer (measurement alternative).

Certain equity investments without readily

determinable fair values are measured at NAV per share as a practical expedient, which are excluded from the fair value hierarchy levels in the table below.

Certain equity investments without readily determinable fair values are measured at NAV per share as a practical expedient, which are excluded from the fair value hierarchy levels in the table below.

Interest Rate Derivatives

1 unchanged sentence

When entering into an interest rate swap or cap contract, the Company is exposed to fair value changes due to interest rate movements, and also the potential nonperformance of the contract counterparty.

Other Real Estate Owned and Loans Individually Measured for Impairment

Other real estate owned and loans measured for impairment based on the fair value of the underlying collateral are recorded at estimated fair value, less estimated selling costs.

Fair value is based on independent appraisals (Level 3).

Loans Individually Measured for Impairment

15 unchanged sentences

43,657 — — 39,676

Other real estate owned 1,811 — — 1,811

Loans measured for impairment based on the fair value of the underlying collateral (3)

11 unchanged sentences

18,509 — — 18,509

(1) As of December 31, 2023 and 2022, equity investments of $ 47.0 million and $ 40.1 million, respectively, included $ 43.6 million and $ 37.1 million, respectively, of equity investments measured under the measurement alternative.

This included no unrealized gains or losses for the year ended December 31, 2023 and $ 20.0 million of unrealized gains for the year ended December 31, 2022.

(2) As of December 31, 2023 and 2022, equity investments of $ 47.0 million and $ 40.1 million, respectively, included $ 3.4 million and $ 3.0 million, respectively, of certain equity investment funds measured at NAV per share (or its equivalent) as a practical expedient to fair value and these equity investments have not been classified in the fair value hierarchy levels.

(1) As of December 31, 2024 and 2023, equity investments included $ 39.7 million and $ 43.6 million, respectively, of equity investments measured under the measurement alternative.

There were no unrealized gains or losses for the years ended December 31, 2024 and 2023.

(2) As of December 31, 2024 and 2023, equity investments included $ 4.0 million and $ 3.4 million, respectively, of certain equity investment funds measured at NAV per share (or its equivalent) as a practical expedient to fair value and these equity investments have not been classified in the fair value hierarchy levels.

(3) Primarily consists of commercial loans, which are collateral dependent.

The range may vary but is generally 0 % to 8 % on the discount for costs to sell and 0 % to 10 % on appraisal adjustments.

The following table reconciles the beginning and ending balances for equity investments that are recognized at fair value on a recurring basis, in the Consolidated Statements of Financial Condition, using significant unobservable inputs (in thousands):

For the Year Ended December 31,

December 31, 2022

Beginning balance $ 2,718

Transfers out of Level 3 ( 2,718 )

Ending balance $ —

The Company recognizes transfers between levels of the valuation hierarchy at the end of the applicable reporting periods.

There were no assets in Level 3 that were recognized at fair value on a recurring basis or transfers into or out of Level 3 for the year ended December 31, 2023.

During the year ended December 31, 2022, the Company executed its right to convert $ 2.7 million of preferred stock into common stock, which resulted in a transfer from Level 3 into Level 1.

There were no assets in Level 3 that were recognized at fair value on a recurring basis or transfers into or out of Level 3 for the year ended December 31, 2024 and 2023.

Assets and Liabilities Disclosed at Fair Value

4 unchanged sentences

Debt securities classified as held-to-maturity are carried at amortized cost, as the Company has the positive intent and ability to hold these debt securities to maturity.

The Company determines the fair value of the debt securities utilizing Level 2 and, infrequently, Level 3 inputs.

The Company determines the fair value of the debt securities utilizing Level 2 inputs.

Most of the Company’s debt securities are fixed income instruments that are not quoted on an exchange, but are bought and sold in active markets.

4 unchanged sentences

Management reviews this documentation, makes inquiries of the third-party pricing service and decides as to the level of the valuation inputs.

Based on the Company’s review of the available documentation from the third-party pricing service, management concluded that Level 2 inputs were utilized for all securities except for certain debt securities where management utilized Level 3 inputs, such as broker or dealer quotes with limited levels of activity and price transparency.

Based on the Company’s review of the available documentation from the third-party pricing service, management concluded that Level 2 inputs were utilized for all securities.

Restricted Equity Investments

59 unchanged sentences

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.

These estimates do not reflect any premium or discount that could result from offering for sale at one time

the Company’s entire holdings of a particular financial instrument.

These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument.

Because a limited market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other significant unobservable inputs.

21 unchanged sentences

however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC Topic 820, Fair Value Measurements.

The Company recognized losses of $ 5,000 and gains of $ 49,000 and $ 72,000 in commercial loan swap income resulting from fair value adjustments for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company recognized gains of $ 8,000 , losses of $ 5,000 and gains of $ 49,000 in commercial loan swap income resulting from fair value adjustments for the years ended December 31, 2024, 2023 and 2022, respectively.

Derivatives Designated as Hedging Instruments

During the fourth quarter of 2022, the Company entered into a three-year interest rate swap intended to add stability to its net interest income and to manage its exposure to future interest rate movements associated with a pool of floating rate commercial loans.

During 2022, the Company entered into a three-year interest rate swap intended to add stability to its net interest income and to manage its exposure to future interest rate movements associated with a pool of floating rate commercial loans.

The swap requires the Company to pay variable-rate amounts indexed to one-month term SOFR to the counterparty in exchange for the receipt of fixed-rate amounts at 4.0 % from the counterparty.

5 unchanged sentences

For the Year Ended December 31,

2024 2023 2022

AOCL balance at beginning of period, net of tax $ ( 36 ) $ ( 25 ) $ —

Unrealized losses recognized in OCI ( 956 ) ( 808 ) ( 25 )

Losses reclassified from AOCI into interest income 797 —

Losses reclassified from AOCL into interest income 905 797 —

AOCL balance at end of period, net of tax $ ( 87 ) $ ( 36 ) $ ( 25 )

19 unchanged sentences

This requirement is dependent on certain specified credit measures.

The amount of collateral posted with third parties was $ 0 and $ 40,000 at December 31, 2023 and 2022, respectively.

The amount of collateral posted with third parties was $ 0 at both December 31, 2024 and 2023.

The amount of collateral received from third parties was $ 93.3 million and $ 88.3 million at December 31, 2024 and 2023, respectively.

64 unchanged sentences

In accordance with ASC 810, Consolidation, the Company has consolidated Trident’s assets and liabilities.

For further discussion on the acquisition of Trident refer to Note 3 Business Combinations, to this Form 10-K.

The summarized financial information for the Company’s consolidated VIE consisted of the following (in thousands):

22 unchanged sentences

Other liabilities 4,533 4,576

Total liabilities 200,657 199,347

OceanFirst Financial Corp.

12 unchanged sentences

Interest income – ESOP loan receivable

Net (loss) gain on equity investments ( 3,732 ) 7,973 7,499

Net gain (loss) on equity investments 4,225 ( 3,732 ) 7,973

98,455 98,657 84,160

19 unchanged sentences

Undistributed earnings of subsidiary Bank ( 19,424 ) ( 19,220 ) ( 77,357 )

Net loss (gain) on equity investments 3,732 ( 7,973 ) ( 7,499 )

Net (gain) loss on equity investments ( 4,225 ) 3,732 ( 7,973 )

Net premium amortization in excess of discount accretion on securities 584 981 1,185

6 unchanged sentences

Purchase of equity investments ( 3,082 ) ( 7,661 ) ( 7,207 )

Increase in ESOP loan receivable — — ( 3,200 )

Repayments on ESOP loan receivable 1,370 2,510 2,480

Cash consideration for acquisition, net of cash received — — ( 7,084 )

Net cash (used in) provided by investing activities ( 329 ) ( 5,329 ) 11,169

Net cash provided by (used in) investing activities 21,071 ( 329 ) ( 5,329 )

Cash flows from financing activities:

10 unchanged sentences

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 8. Financial Statements and Supplementary Data