OCEANFIRST FINANCIAL CORP 10-Q

Item 4. Controls and Procedures (a) Disclosure Controls and Procedures The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. Disclosure controls and procedures are the controls and other procedures that are designed to ensure that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. (b) Changes in Internal Control Over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 18 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands, except per share amounts) June 30, December 31, 2025 2024 (Unaudited) Assets Cash and due from banks $ 170,599 $ 123,615 Debt securities available-for-sale, at estimated fair value 735,561 827,500 Debt securities held-to-maturity, net of allowance for securities credit losses of $ 809 at June 30, 2025 and $ 967 at December 31, 2024 (estimated fair value of $ 896,090 at June 30, 2025 and $ 952,917 at December 31, 2024) 968,969 1,045,875 Equity investments 87,808 84,104 Restricted equity investments, at cost 106,538 108,634 Loans receivable, net of allowance for loan credit losses of $ 79,266 at June 30, 2025 and $ 73,607 at December 31, 2024 10,119,781 10,055,429 Loans held-for-sale 15,744 21,211 Interest and dividends receivable 44,032 45,914 Other real estate owned 7,680 1,811 Premises and equipment, net 113,474 115,256 Bank owned life insurance 271,184 270,208 Goodwill 523,308 523,308 Intangibles 10,834 12,680 Other assets 152,335 185,702 Total assets $ 13,327,847 $ 13,421,247 Liabilities and Stockholders’ Equity Deposits $ 10,232,442 $ 10,066,342 Federal Home Loan Bank (“FHLB”) advances 938,687 1,072,611 Securities sold under agreements to repurchase with customers 61,490 60,567 Other borrowings 198,019 197,546 Advances by borrowers for taxes and insurance 18,759 23,031 Other liabilities 234,770 298,393 Total liabilities 11,684,167 11,718,490 Stockholders’ equity: Preferred stock, $ 0.01 par value, $ 1,000 liquidation preference, 5,000,000 shares authorized, 0 and 57,370 shares issued at June 30, 2025 and December 31, 2024, respectively. — 1 Common stock, $ 0.01 par value, 150,000,000 shares authorized, 62,904,241 and 62,182,767 shares issued at June 30, 2025 and December 31, 2024, respectively; and 57,383,975 and 58,554,871 shares outstanding at June 30, 2025 and December 31, 2024, respectively 625 613 Additional paid-in capital 1,115,441 1,168,321 Retained earnings 655,095 641,727 Accumulated other comprehensive loss ( 11,437 ) ( 15,853 ) Less: Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") ( 1,922 ) ( 2,542 ) Treasury stock, 5,520,266 and 4,118,321 shares at June 30, 2025 and December 31, 2024, respectively ( 114,956 ) ( 90,617 ) OceanFirst Financial Corp. stockholders’ equity 1,642,846 1,701,650 Non-controlling interest 834 1,107 Total stockholders’ equity 1,643,680 1,702,757 Total liabilities and stockholders’ equity $ 13,327,847 $ 13,421,247 See accompanying Notes to Unaudited Consolidated Financial Statements. 19 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 (Unaudited) (Unaudited) Interest income: Loans $ 135,478 $ 136,049 $ 268,497 $ 273,170 Debt securities 15,950 19,039 33,220 38,900 Equity investments and other 3,397 4,338 6,811 8,958 Total interest income 154,825 159,426 308,528 321,028 Interest expense: Deposits 52,273 60,071 103,319 119,926 Borrowed funds 14,916 17,092 30,921 32,615 Total interest expense 67,189 77,163 134,240 152,541 Net interest income 87,636 82,263 174,288 168,487 Provision for credit losses 3,039 3,114 8,379 3,705 Net interest income after provision for credit losses 84,597 79,149 165,909 164,782 Other income (loss): Bankcard services revenue 1,619 1,571 3,082 2,987 Trust and asset management revenue 374 419 780 945 Fees and service charges 4,969 5,015 9,681 9,488 Net gain on sales of loans 1,177 420 2,035 777 Net gain on equity investments 488 887 693 2,810 Net loss from other real estate operations ( 260 ) — ( 276 ) — Income from bank owned life insurance 1,786 1,726 3,638 3,588 Commercial loan swap income 207 241 827 379 Other 1,373 706 2,526 2,297 Total other income 11,733 10,985 22,986 23,271 Operating expenses: Compensation and employee benefits 40,242 33,136 76,982 65,895 Occupancy 5,454 5,175 10,951 10,374 Equipment 869 1,068 1,790 2,198 Marketing 1,541 1,175 2,649 2,165 Federal deposit insurance and regulatory assessments 2,898 2,685 5,881 5,820 Data processing 6,808 6,018 13,455 11,974 Check card processing 1,156 1,075 2,326 2,125 Professional fees 4,336 2,161 6,761 4,893 Amortization of intangibles 906 810 1,846 1,654 Other operating expenses 7,264 5,317 13,127 10,194 Total operating expenses 71,474 58,620 135,768 117,292 Income before provision for income taxes 24,856 31,514 53,127 70,761 Provision for income taxes 5,771 7,082 12,579 17,719 Net income 19,085 24,432 40,548 53,042 Net income (loss) attributable to non-controlling interest 39 59 ( 7 ) 2 Net income attributable to OceanFirst Financial Corp. 19,046 24,373 40,555 53,040 Dividends on preferred shares 1,004 1,004 2,008 2,008 Loss on redemption of preferred stock 1,842 — 1,842 — Net income available to common stockholders $ 16,200 $ 23,369 $ 36,705 $ 51,032 Basic earnings per share $ 0.28 $ 0.40 $ 0.63 $ 0.87 Diluted earnings per share $ 0.28 $ 0.40 $ 0.63 $ 0.87 Average basic shares outstanding 57,738 58,356 57,889 58,489 Average diluted shares outstanding 57,740 58,357 57,891 58,490 See accompanying Notes to Unaudited Consolidated Financial Statements. 20 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 (Unaudited) (Unaudited) Net income $ 19,085 $ 24,432 $ 40,548 $ 53,042 Other comprehensive income: Net unrealized gain on debt securities (net of tax expense of $ 542 and $ 1,330 in 2025 and $ 710 and $ 1,344 in 2024, respectively) 1,693 2,226 4,166 4,219 Accretion of unrealized loss on debt securities reclassified to held-to-maturity (net of tax expense of $ 74 and $ 118 in 2025 and $ 40 and $ 82 in 2024, respectively) 109 57 173 118 Unrealized loss on derivative hedges (net of tax benefit of $ 31 and $ 30 in 2025 and $ 98 and $ 400 in 2024, respectively) ( 93 ) ( 306 ) ( 93 ) ( 1,255 ) Reclassification adjustment for losses included in net income (net of tax expense of $ 35 and $ 55 in 2025 and $ 81 and $ 190 in 2024, respectively) 106 253 170 595 Total other comprehensive income, net of tax 1,815 2,230 4,416 3,677 Total comprehensive income 20,900 26,662 44,964 56,719 Less: comprehensive income (loss) attributable to non-controlling interest 39 59 ( 7 ) 2 Comprehensive income attributable to OceanFirst Financial Corp. 20,861 26,603 44,971 56,717 Less: dividends on preferred shares 1,004 1,004 2,008 2,008 Less: loss on redemption of preferred stock 1,842 — 1,842 — Total comprehensive income available to common stockholders $ 18,015 $ 25,599 $ 41,121 $ 54,709 See accompanying Notes to Unaudited Consolidated Financial Statements. 21 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (dollars in thousands, except per share amounts) (Unaudited) For the Three Months Ended June 30, 2025 and 2024 Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Employee Stock Ownership Plan Treasury Stock Non-Controlling Interest Total Balance at March 31, 2024 $ 1 $ 613 $ 1,163,282 $ 608,355 $ ( 19,415 ) $ ( 3,470 ) $ ( 84,254 ) $ 725 $ 1,665,837 Net income — — — 24,373 — — — 59 24,432 Other comprehensive income, net of tax — — — — 2,230 — — — 2,230 Stock compensation — — 1,591 — — — — — 1,591 Allocation of ESOP stock — — ( 60 ) — — 309 — — 249 Cash dividend - $ 0.20 per share — — — ( 11,703 ) — — — — ( 11,703 ) Repurchase 338,087 shares of common stock — — — — — — ( 4,963 ) — ( 4,963 ) Preferred stock dividend — — — ( 1,004 ) — — — — ( 1,004 ) Balance at June 30, 2024 $ 1 $ 613 $ 1,164,813 $ 620,021 $ ( 17,185 ) $ ( 3,161 ) $ ( 89,217 ) $ 784 $ 1,676,669 Balance at March 31, 2025 $ 1 $ 625 $ 1,170,179 $ 650,546 $ ( 13,252 ) $ ( 2,232 ) $ ( 97,545 ) $ 795 $ 1,709,117 Net income — — — 19,046 — — — 39 19,085 Other comprehensive income, net of tax — — — — 1,815 — — — 1,815 Stock compensation — — 808 — — — — — 808 Allocation of ESOP stock — — ( 36 ) — — 310 — — 274 Cash dividend - $ 0.20 per share — — — ( 11,651 ) — — — — ( 11,651 ) Exercise of stock options — — 17 — — — — — 17 Repurchase of 1,003,550 shares of common stock — — — — — — ( 17,411 ) — ( 17,411 ) Preferred stock dividend — — — ( 1,004 ) — — — — ( 1,004 ) Redemption of preferred stock ( 1 ) — ( 55,527 ) ( 1,842 ) — — — — ( 57,370 ) Balance at June 30, 2025 $ — $ 625 $ 1,115,441 $ 655,095 $ ( 11,437 ) $ ( 1,922 ) $ ( 114,956 ) $ 834 $ 1,643,680 22 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (dollars in thousands, except per share amounts) (Unaudited) For the Six Months Ended June 30, 2025 and 2024 Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Employee Stock Ownership Plan Treasury Stock Non-Controlling Interest Total Balance at December 31, 2023 $ 1 $ 613 $ 1,161,755 $ 592,542 $ ( 20,862 ) $ ( 3,780 ) $ ( 69,106 ) $ 782 $ 1,661,945 Net income — — — 53,040 — — — 2 53,042 Other comprehensive income, net of tax — — — — 3,677 — — — 3,677 Stock compensation — — 3,132 — — — — — 3,132 Allocation of ESOP stock — — ( 103 ) — — 619 — — 516 Cash dividend - $ 0.40 per share — — — ( 23,553 ) — — — — ( 23,553 ) Repurchase 1,295,914 shares of common stock — — 29 — — — ( 20,111 ) — ( 20,082 ) Preferred stock dividend — — — ( 2,008 ) — — — — ( 2,008 ) Balance at June 30, 2024 $ 1 $ 613 $ 1,164,813 $ 620,021 $ ( 17,185 ) $ ( 3,161 ) $ ( 89,217 ) $ 784 $ 1,676,669 Balance at December 31, 2024 $ 1 $ 613 $ 1,168,321 $ 641,727 $ ( 15,853 ) $ ( 2,542 ) $ ( 90,617 ) $ 1,107 $ 1,702,757 Net income (loss) — — — 40,555 — — — ( 7 ) 40,548 Other comprehensive income, net of tax — — — — 4,416 — — — 4,416 Stock compensation — 12 2,534 — — — — — 2,546 Allocation of ESOP stock — — ( 54 ) — — 620 — — 566 Cash dividend - $ 0.40 per share — — — ( 23,337 ) — — — — ( 23,337 ) Exercise of stock options — — 136 — — — — — 136 Repurchase 1,401,945 shares of common stock — — 31 — — — ( 24,339 ) — ( 24,308 ) Preferred stock dividend — — — ( 2,008 ) — — — — ( 2,008 ) Redemption of preferred stock ( 1 ) — ( 55,527 ) ( 1,842 ) — — — — ( 57,370 ) Distributions to non-controlling interest — — — — — — — ( 266 ) ( 266 ) Balance at June 30, 2025 $ — $ 625 $ 1,115,441 $ 655,095 $ ( 11,437 ) $ ( 1,922 ) $ ( 114,956 ) $ 834 $ 1,643,680 See accompanying Notes to Unaudited Consolidated Financial Statements. 23 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) For the Six Months Ended June 30, 2025 2024 (Unaudited) Cash flows from operating activities: Net income $ 40,548 $ 53,042 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment 5,083 5,696 Allocation of ESOP stock 566 516 Stock compensation 2,546 3,132 Net excess tax expense on stock compensation 195 365 Amortization of servicing asset 163 120 Net premium amortization in excess of discount accretion on securities 82 349 Net amortization of deferred costs on borrowings 239 309 Amortization of intangibles 1,846 1,654 Net accretion of purchase accounting adjustments ( 691 ) ( 2,056 ) Net amortization of deferred fees/costs and premiums/discounts on loans ( 4,668 ) ( 1,103 ) Provision for credit losses 8,379 3,705 Net loss on sale of other real estate owned 22 — Net loss (gain) on sale of fixed assets 2 ( 168 ) Net loss on sales of available-for-sale securities 56 106 Net gain on equity investments ( 693 ) ( 2,810 ) Net gain on sales of loans ( 2,035 ) ( 777 ) Proceeds from sales of residential loans held for sale 249,458 75,786 Residential loans originated for sale ( 241,956 ) ( 71,905 ) Write down of other real estate owned 194 — Increase in value of bank owned life insurance ( 3,638 ) ( 4,181 ) Decrease in interest and dividends receivable 1,882 898 Deferred tax (benefit) provision ( 39 ) 920 Decrease (increase) in other assets 33,053 ( 23,414 ) (Decrease) increase in other liabilities ( 63,797 ) 29,644 Total adjustments ( 13,751 ) 16,786 Net cash provided by operating activities 26,797 69,828 Cash flows from investing activities: Net (increase) decrease in loans receivable ( 56,273 ) 174,954 Proceeds from sales of non-performing loans 6,361 — Purchase of loan pools ( 26,859 ) — Discounts received on purchased loan pool 2,562 — Purchase of debt securities available-for-sale ( 51,661 ) ( 14,280 ) Purchase of debt securities held-to-maturity — ( 6,069 ) Purchase of equity investments ( 3,220 ) ( 1,495 ) Proceeds from maturities and calls of debt securities available-for-sale 3,250 15,410 Proceeds from maturities and calls of debt securities held-to-maturity 27,004 11,490 Proceeds from sales of debt securities available-for-sale 5,444 2,394 Principal repayments on debt securities available-for-sale 139,898 34,496 Principal repayments on debt securities held-to-maturity 51,515 49,286 Proceeds from bank owned life insurance 2,662 2,812 Proceeds from the redemption of restricted equity investments 127,306 55,020 Purchases of restricted equity investments ( 125,210 ) ( 53,933 ) Proceeds from sale of other real estate owned 402 — Purchases of premises and equipment ( 3,249 ) ( 4,862 ) Proceeds from disposal of premises and equipment — 3,369 Net cash provided by investing activities 99,932 268,592 24 Table of Contents OceanFirst Financial Corp. CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) (dollars in thousands) For the Six Months Ended June 30, 2025 2024 (Unaudited) Cash flows from financing activities: Increase (decrease) in deposits $ 166,102 $ ( 440,854 ) Increase in short-term borrowings 885 6,807 Net repayment of FHLB advances ( 133,924 ) ( 59,299 ) Net proceeds from other borrowings — 227,495 (Decrease) increase in advances by borrowers for taxes and insurance ( 4,272 ) 2,761 Exercise of stock options 136 — Payment of employee taxes withheld from stock awards and phantom stock units ( 1,383 ) ( 2,207 ) Purchase of treasury stock ( 24,308 ) ( 20,082 ) Dividends paid ( 25,345 ) ( 25,561 ) Redemption of preferred stock ( 57,370 ) — Distributions to non-controlling interest ( 266 ) — Net cash used in provided by financing activities ( 79,745 ) ( 310,940 ) Net increase in cash and due from banks and restricted cash 46,984 27,480 Cash and due from banks and restricted cash at beginning of period 123,615 153,718 Cash and due from banks and restricted cash at end of period $ 170,599 $ 181,198 Supplemental Disclosure of Cash Flow Information: Cash and due from banks at beginning of period $ 123,615 $ 153,718 Restricted cash at beginning of period — — Cash and due from banks and restricted cash at beginning of period $ 123,615 $ 153,718 Cash and due from banks at end of period $ 170,599 $ 181,198 Restricted cash at end of period — — Cash and due from banks and restricted cash at end of period $ 170,599 $ 181,198 Cash paid during the period for: Interest $ 133,527 $ 145,401 Income taxes 12,957 19,704 Non-cash activities: Accretion of unrealized loss on securities reclassified to held-to-maturity 291 200 Net loan charge-offs 2,854 1,801 Transfer of securities from held-to-maturity to available-for-sale — 500 Transfer of loans receivable to other real estate owned 6,487 — Transfer of loans receivable to loans held-for-sale 6,361 — See accompanying Notes to Unaudited Consolidated Financial Statements. 25 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements Note 1. Basis of Presentation 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, Country Property Holdings, Inc., OFB Acquisition LLC; Spring Garden Capital Group, LLC (and its subsidiaries), and a majority controlling interest in Trident Abstract Title Agency, LLC (“Trident”). All significant intercompany accounts and transactions have been eliminated in consolidation. The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations that may be expected for the full year 2025 or any other period. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and the results of operations for the periods presented. Actual results could differ from these estimates. The Company reclassified loans secured by owner-occupied commercial real estate to commercial and industrial - real estate to reflect the variation in the management and underlying risk profile of such loans as compared with non-owner-occupied (“investor”) commercial real estate loans. Similarly, the Company also reclassified commercial and industrial loans that were not secured by real estate to commercial and industrial - non-real estate. Collectively, these two loan portfolios are referred to as ‘Commercial and industrial’ loans. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Segment Reporting The Company’s operations are solely in the financial services industry and provide 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 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. 26 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Note 2. Earnings per Share The following reconciles shares outstanding for basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Weighted average shares outstanding 58,030 58,667 58,284 58,937 Less: Unallocated ESOP shares ( 107 ) ( 173 ) ( 115 ) ( 181 ) Unallocated incentive award shares ( 185 ) ( 138 ) ( 280 ) ( 267 ) Average basic shares outstanding 57,738 58,356 57,889 58,489 Add: Effect of dilutive securities: Incentive awards 2 1 2 1 Average diluted shares outstanding 57,740 58,357 57,891 58,490 For the three and six months ended June 30, 2025, antidilutive stock options of 1,532,000 and 1,561,000 , respectively, were excluded from the earnings per share calculation. For the three and six months ended June 30, 2024, antidilutive stock options of 1,680,000 for both periods were excluded from the earnings per share calculation. 27 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Note 3. Securities The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities available-for-sale and held-to-maturity at June 30, 2025 and December 31, 2024 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Allowance for Securities Credit Losses At June 30, 2025 Debt securities available-for-sale: U.S. government and agency obligations $ 59,254 $ 4 $ ( 3,516 ) $ 55,742 $ — Corporate debt securities 22,071 295 ( 278 ) 22,088 — Asset-backed securities 140,653 136 ( 50 ) 140,739 — Mortgage-backed securities (“MBS”): Agency residential 419,213 902 ( 753 ) 419,362 — Agency commercial 108,591 — ( 10,961 ) 97,630 — Total mortgage-backed securities 527,804 902 ( 11,714 ) 516,992 — Total debt securities available-for-sale $ 749,782 $ 1,337 $ ( 15,558 ) $ 735,561 $ — Debt securities held-to-maturity: State and municipal debt obligations $ 183,589 $ 150 $ ( 12,958 ) $ 170,781 $ ( 27 ) Corporate debt securities 55,677 252 ( 625 ) 55,304 ( 588 ) Mortgage-backed securities: Agency residential 633,637 1,065 ( 55,702 ) 579,000 — Agency commercial 79,035 6 ( 5,487 ) 73,554 — Non-agency commercial 17,840 — ( 389 ) 17,451 ( 194 ) Total mortgage-backed securities 730,512 1,071 ( 61,578 ) 670,005 ( 194 ) Total debt securities held-to-maturity $ 969,778 $ 1,473 $ ( 75,161 ) $ 896,090 $ ( 809 ) Total debt securities $ 1,719,560 $ 2,810 $ ( 90,719 ) $ 1,631,651 $ ( 809 ) At December 31, 2024 Debt securities available-for-sale: U.S. government and agency obligations $ 62,396 $ 11 $ ( 5,022 ) $ 57,385 $ — Corporate debt securities 14,042 43 ( 762 ) 13,323 — Asset-backed securities 197,116 235 ( 84 ) 197,267 — Mortgage-backed securities: Agency residential 465,108 1,256 ( 801 ) 465,563 — Agency commercial 108,610 — ( 14,648 ) 93,962 — Total mortgage-backed securities 573,718 1,256 ( 15,449 ) 559,525 — Total debt securities available-for-sale $ 847,272 $ 1,545 $ ( 21,317 ) $ 827,500 $ — Debt securities held-to-maturity: State and municipal debt obligations $ 201,369 $ 199 $ ( 13,665 ) $ 187,903 $ ( 31 ) Corporate debt securities 65,350 775 ( 1,416 ) 64,709 ( 734 ) Mortgage-backed securities: Agency residential 680,052 44 ( 73,110 ) 606,986 — Agency commercial 79,925 1 ( 5,878 ) 74,048 — Non-agency commercial 20,146 — ( 875 ) 19,271 ( 202 ) Total mortgage-backed securities 780,123 45 ( 79,863 ) 700,305 ( 202 ) Total debt securities held-to-maturity $ 1,046,842 $ 1,019 $ ( 94,944 ) $ 952,917 $ ( 967 ) Total debt securities $ 1,894,114 $ 2,564 $ ( 116,261 ) $ 1,780,417 $ ( 967 ) 28 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the three and six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Allowance for securities credit losses Beginning balance $ ( 898 ) $ ( 1,058 ) $ ( 967 ) $ ( 1,133 ) Benefit for credit losses 89 100 158 175 Total ending allowance balance $ ( 809 ) $ ( 958 ) $ ( 809 ) $ ( 958 ) The Company monitors the credit quality of debt securities held-to-maturity on a quarterly basis through the use of internal credit analysis supplemented by external credit ratings. Credit ratings of BBB- or Baa3 or higher are considered investment grade. Where multiple ratings are available, the Company considers the lowest rating when determining the allowance for securities credit losses. Under this approach, the amortized cost of debt securities held-to-maturity at June 30, 2025, aggregated by credit quality indicator, are as follows (in thousands): Investment Grade Non-Investment Grade/Non-rated Total As of June 30, 2025 State and municipal debt obligations $ 183,589 $ — $ 183,589 Corporate debt securities 42,723 12,954 55,677 Non-agency commercial MBS 17,840 — 17,840 Total debt securities held-to-maturity $ 244,152 $ 12,954 $ 257,106 There were $ 56,000 of realized losses on sale of debt securities available-for-sale for both the three and six months ended June 30, 2025, as compared to $ 4,000 of realized gains and $ 106,000 of realized losses for the corresponding prior year periods. These realized gains/losses on debt securities are presented within Other and included within Total other income on the Consolidated Statements of Income. The amortized cost and estimated fair value of debt securities at June 30, 2025 by contractual maturity are shown below (in thousands): June 30, 2025 Amortized Cost Estimated Fair Value Less than one year $ 27,939 $ 27,749 Due after one year through five years 182,411 175,331 Due after five years through ten years 166,697 164,505 Due after ten years 84,197 77,069 $ 461,244 $ 444,654 Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2025, corporate debt securities, state and municipal obligations, and asset-backed securities with an amortized cost of $ 77.2 million, $ 49.6 million, and $ 140.7 million, respectively, and an estimated fair value of $ 76.8 million, $ 48.3 million, and $ 140.7 million, respectively, were callable prior to the maturity date. Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments. 29 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at June 30, 2025 and December 31, 2024, segregated by the duration of the unrealized losses, are as follows (in thousands): Less than 12 months 12 months or longer Total Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses At June 30, 2025 Debt securities available-for-sale: U.S. government and agency obligations $ 2,429 $ ( 1 ) $ 51,067 $ ( 3,515 ) $ 53,496 $ ( 3,516 ) Corporate debt securities 4,000 — 4,722 ( 278 ) 8,722 ( 278 ) Asset-backed securities 42,333 ( 36 ) 5,986 ( 14 ) 48,319 ( 50 ) MBS: Agency residential 231,636 ( 753 ) — — 231,636 ( 753 ) Agency commercial 493 ( 2 ) 97,137 ( 10,959 ) 97,630 ( 10,961 ) Total MBS 232,129 ( 755 ) 97,137 ( 10,959 ) 329,266 ( 11,714 ) Total debt securities available-for-sale 280,891 ( 792 ) 158,912 ( 14,766 ) 439,803 ( 15,558 ) Debt securities held-to-maturity: State and municipal debt obligations 7,985 ( 31 ) 151,858 ( 12,927 ) 159,843 ( 12,958 ) Corporate debt securities 2,220 ( 30 ) 23,710 ( 595 ) 25,930 ( 625 ) MBS: Agency residential 34,872 ( 552 ) 457,112 ( 55,150 ) 491,984 ( 55,702 ) Agency commercial 1,727 ( 6 ) 71,004 ( 5,481 ) 72,731 ( 5,487 ) Non-agency commercial — — 17,451 ( 389 ) 17,451 ( 389 ) Total MBS 36,599 ( 558 ) 545,567 ( 61,020 ) 582,166 ( 61,578 ) Total debt securities held-to-maturity 46,804 ( 619 ) 721,135 ( 74,542 ) 767,939 ( 75,161 ) Total debt securities $ 327,695 $ ( 1,411 ) $ 880,047 $ ( 89,308 ) $ 1,207,742 $ ( 90,719 ) At December 31, 2024 Debt securities available-for-sale: U.S. government and agency obligations $ 3,221 $ — $ 49,538 $ ( 5,022 ) $ 52,759 $ ( 5,022 ) Corporate debt securities 4,793 ( 55 ) 6,029 ( 707 ) 10,822 ( 762 ) Asset-backed securities 31,588 ( 21 ) 59,148 ( 63 ) 90,736 ( 84 ) MBS: Agency residential 202,961 ( 801 ) — — 202,961 ( 801 ) Agency commercial — — 93,962 ( 14,648 ) 93,962 ( 14,648 ) Total MBS 202,961 ( 801 ) 93,962 ( 14,648 ) 296,923 ( 15,449 ) Total debt securities available-for-sale 242,563 ( 877 ) 208,677 ( 20,440 ) 451,240 ( 21,317 ) Debt securities held-to-maturity: State and municipal debt obligations 7,098 ( 176 ) 169,434 ( 13,489 ) 176,532 ( 13,665 ) Corporate debt securities 1,247 ( 219 ) 25,518 ( 1,197 ) 26,765 ( 1,416 ) MBS: Agency residential 114,557 ( 1,647 ) 479,847 ( 71,463 ) 594,404 ( 73,110 ) Agency commercial 3,894 ( 20 ) 69,912 ( 5,858 ) 73,806 ( 5,878 ) Non-agency commercial — — 19,271 ( 875 ) 19,271 ( 875 ) Total MBS 118,451 ( 1,667 ) 569,030 ( 78,196 ) 687,481 ( 79,863 ) Total debt securities held-to-maturity 126,796 ( 2,062 ) 763,982 ( 92,882 ) 890,778 ( 94,944 ) Total debt securities $ 369,359 $ ( 2,939 ) $ 972,659 $ ( 113,322 ) $ 1,342,018 $ ( 116,261 ) The Company concluded that no debt securities were impaired at June 30, 2025 based on consideration of several factors. The Company noted that each issuer made all contractually due payments when required. 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 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. 30 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Equity Investments At June 30, 2025 and December 31, 2024, the Company held equity investments of $ 87.8 million and $ 84.1 million, respectively. The equity investments are primarily comprised of select financial services institutions’ preferred stocks, investments in other financial institutions and funds. The realized and unrealized gains or losses on equity securities for the three and six months ended June 30, 2025 and 2024 are shown in the table below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net gain on equity investments $ 488 $ 887 $ 693 $ 2,810 Less: Net gains recognized on equity investments sold — — — — Unrealized gains recognized on equity investments still held $ 488 $ 887 $ 693 $ 2,810 Note 4. Loans Receivable, Net Loans receivable, net at June 30, 2025 and December 31, 2024 consisted of the following (in thousands): June 30, December 31, 2025 2024 Commercial: Commercial real estate – investor $ 5,068,125 $ 5,287,683 Commercial and industrial: Commercial and industrial – real estate 914,406 902,219 Commercial and industrial – non-real estate 862,504 647,945 Total commercial and industrial 1,776,910 1,550,164 Total commercial 6,845,035 6,837,847 Consumer: Residential real estate 3,119,232 3,049,763 Home equity loans and lines and other consumer (“other consumer”) 220,820 230,462 Total consumer 3,340,052 3,280,225 Total loans receivable 10,185,087 10,118,072 Deferred origination costs, net of fees 13,960 10,964 Allowance for loan credit losses ( 79,266 ) ( 73,607 ) Total loans receivable, net $ 10,119,781 $ 10,055,429 The Company categorizes all loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis. The Company uses the following definitions for risk ratings: Pass : Loans classified as Pass are well protected by the paying capacity and net worth of the borrower. Special Mention : Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard : Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the collection or the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful : Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. 31 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The following tables summarize total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands): 2025 2024 2023 2022 2021 2020 and prior Revolving lines of credit Total June 30, 2025 Commercial real estate - investor Pass $ 93,258 $ 69,823 $ 138,809 $ 1,169,708 $ 1,256,126 $ 1,607,826 $ 624,692 $ 4,960,242 Special Mention 167 — — 2,958 — 12,053 2,261 17,439 Substandard 15 85 — 24,824 298 47,117 18,105 90,444 Total commercial real estate - investor 93,440 69,908 138,809 1,197,490 1,256,424 1,666,996 645,058 5,068,125 Commercial and industrial: Commercial and industrial - real estate Pass 55,126 77,917 60,393 137,081 82,638 446,477 44,194 903,826 Special Mention — — — — — 777 40 817 Substandard — — — — — 9,750 13 9,763 Total commercial and industrial - real estate 55,126 77,917 60,393 137,081 82,638 457,004 44,247 914,406 Commercial and industrial - non-real estate Pass 127,790 166,644 31,272 32,784 9,847 117,635 356,800 842,772 Special Mention — 188 — — — 193 — 381 Substandard — 268 4,109 899 704 1,912 11,459 19,351 Total commercial and industrial - non-real estate 127,790 167,100 35,381 33,683 10,551 119,740 368,259 862,504 Total commercial and industrial 182,916 245,017 95,774 170,764 93,189 576,744 412,506 1,776,910 Residential real estate (1) Pass 189,278 275,774 254,593 532,835 773,862 1,087,893 — 3,114,235 Special Mention 153 255 121 368 3 1,784 — 2,684 Substandard — 209 62 94 1,017 931 — 2,313 Total residential real estate 189,431 276,238 254,776 533,297 774,882 1,090,608 — 3,119,232 Other consumer (1) Pass 13,252 25,169 24,847 16,028 15,784 106,456 17,368 218,904 Special Mention — — — — — 200 — 200 Substandard — — 191 33 38 1,454 — 1,716 Total other consumer 13,252 25,169 25,038 16,061 15,822 108,110 17,368 220,820 Total loans $ 479,039 $ 616,332 $ 514,397 $ 1,917,612 $ 2,140,317 $ 3,442,458 $ 1,074,932 $ 10,185,087 (1) For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. 32 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) 2024 2023 2022 2021 2020 2019 and prior Revolving lines of credit Total December 31, 2024 Commercial real estate - investor Pass $ 75,225 $ 140,863 $ 1,142,790 $ 1,290,047 $ 510,906 $ 1,264,536 $ 750,607 $ 5,174,974 Special Mention 15 — 21,285 — — 18,225 4,477 44,002 Substandard 95 8 3,784 — 6,111 44,636 14,073 68,707 Total commercial real estate - investor 75,335 140,871 1,167,859 1,290,047 517,017 1,327,397 769,157 5,287,683 Commercial and industrial: Commercial and industrial - real estate Pass 82,104 62,799 140,578 90,720 40,746 442,685 31,776 891,408 Special Mention — — — — — 2,918 — 2,918 Substandard — — — — 256 7,503 134 7,893 Total commercial and industrial - real estate 82,104 62,799 140,578 90,720 41,002 453,106 31,910 902,219 Commercial and industrial - non-real estate Pass 81,867 30,084 35,469 14,276 3,873 180,695 278,217 624,481 Special Mention — 4,735 — — 235 16 96 5,082 Substandard — 4,326 1,019 749 — 256 12,032 18,382 Total commercial and industrial - non-real estate 81,867 39,145 36,488 15,025 4,108 180,967 290,345 647,945 Total commercial and industrial 163,971 101,944 177,066 105,745 45,110 634,073 322,255 1,550,164 Residential real estate (1) Pass 277,009 270,225 547,093 796,790 366,649 783,204 — 3,040,970 Special Mention — 92 224 449 — 1,476 — 2,241 Substandard 215 415 1,583 445 — 3,894 — 6,552 Total residential real estate 277,224 270,732 548,900 797,684 366,649 788,574 — 3,049,763 Other consumer (1) Pass 27,316 27,596 17,029 16,511 10,694 107,045 21,991 228,182 Special Mention — — — 62 — 219 — 281 Substandard — 97 18 343 — 1,541 — 1,999 Total other consumer 27,316 27,693 17,047 16,916 10,694 108,805 21,991 230,462 Total loans $ 543,846 $ 541,240 $ 1,910,872 $ 2,210,392 $ 939,470 $ 2,858,849 $ 1,113,403 $ 10,118,072 (1) For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. 33 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) An analysis of the allowance for credit losses on loans for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands): Commercial and Industrial Commercial Real Estate – Investor Commercial and Industrial - Real Estate Commercial and Industrial - Non-Real Estate Residential Real Estate Other Consumer Total For the three months ended June 30, 2025 Allowance for credit losses on loans Balance at beginning of period $ 33,947 $ 4,102 $ 12,837 $ 26,810 $ 1,102 $ 78,798 Provision (benefit) for credit losses 690 ( 179 ) 1,951 108 116 2,686 Charge-offs ( 1,791 ) — — ( 370 ) ( 254 ) ( 2,415 ) Recoveries 80 11 34 22 50 197 Balance at end of period $ 32,926 $ 3,934 $ 14,822 $ 26,570 $ 1,014 $ 79,266 For the three months ended June 30, 2024 Allowance for credit losses on loans Balance at beginning of period $ 26,990 $ 4,251 $ 7,641 $ 27,104 $ 1,187 $ 67,173 Provision (benefit) for credit losses 2,462 ( 341 ) 272 642 83 3,118 Charge-offs ( 1,600 ) — — — — ( 1,600 ) Recoveries 1 21 2 87 37 148 Balance at end of period $ 27,853 $ 3,931 $ 7,915 $ 27,833 $ 1,307 $ 68,839 For the six months ended June 30, 2025 Allowance for credit losses on loans Balance at beginning of period $ 30,780 $ 3,817 $ 10,471 $ 27,587 $ 952 $ 73,607 Provision (benefit) for credit losses 3,837 103 4,315 51 207 8,513 Charge-offs ( 1,846 ) — — ( 1,092 ) ( 275 ) ( 3,213 ) Recoveries 155 14 36 24 130 359 Balance at end of period $ 32,926 $ 3,934 $ 14,822 $ 26,570 $ 1,014 $ 79,266 For the six months ended June 30, 2024 Allowance for credit losses on loans Balance at beginning of period $ 27,899 $ 4,354 $ 6,867 $ 27,029 $ 988 $ 67,137 Provision (benefit) for credit losses 1,597 ( 448 ) 1,041 651 662 3,503 Charge-offs ( 1,646 ) — — — ( 395 ) ( 2,041 ) Recoveries 3 25 7 153 52 240 Balance at end of period $ 27,853 $ 3,931 $ 7,915 $ 27,833 $ 1,307 $ 68,839 The following tables summarize gross charge-offs by vintage (in thousands): 2024 2023 2022 2021 2020 and prior Total For the three months ended June 30, 2025 Commercial real estate – investor $ ( 180 ) $ ( 1,564 ) $ — $ — $ ( 47 ) $ ( 1,791 ) Residential real estate — — ( 145 ) ( 52 ) ( 173 ) ( 370 ) Other consumer — — — — ( 254 ) ( 254 ) Total charge-offs $ ( 180 ) $ ( 1,564 ) $ ( 145 ) $ ( 52 ) $ ( 474 ) $ ( 2,415 ) For the six months ended June 30, 2025 Commercial real estate – investor $ ( 180 ) $ ( 1,564 ) $ ( 30 ) $ ( 24 ) $ ( 48 ) $ ( 1,846 ) Residential real estate ( 68 ) ( 55 ) ( 255 ) ( 344 ) ( 370 ) ( 1,092 ) Other consumer — — — — ( 275 ) ( 275 ) Total charge-offs $ ( 248 ) $ ( 1,619 ) $ ( 285 ) $ ( 368 ) $ ( 693 ) $ ( 3,213 ) 34 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) 2021 2019 and prior Total For the three months ended June 30, 2024 Commercial real estate – investor $ — $ ( 1,600 ) $ ( 1,600 ) Other consumer — — — Total charge-offs $ — $ ( 1,600 ) $ ( 1,600 ) For the six months ended June 30, 2024 Commercial real estate – investor $ ( 46 ) $ ( 1,600 ) $ ( 1,646 ) Other consumer — ( 395 ) ( 395 ) Total charge-offs $ ( 46 ) $ ( 1,995 ) $ ( 2,041 ) 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 June 30, 2025 and December 31, 2024, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $ 15.4 million and $ 11.8 million, respectively, commercial and industrial - real estate of $ 4.4 million and $ 4.8 million, respectively, and commercial and industrial - non-real estate of $ 286,000 and $ 32,000 , respectively. In addition, the Company had collateral dependent residential and consumer loans with an amortized cost balance of $ 4.0 million and $ 8.6 million at June 30, 2025 and December 31, 2024, respectively. The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of June 30, 2025 and December 31, 2024 (in thousands): June 30, December 31, 2025 2024 Commercial real estate – investor $ 20,457 $ 17,000 Commercial and industrial: Commercial and industrial - real estate 4,499 4,787 Commercial and industrial - non-real estate 311 32 Total commercial and industrial 4,810 4,819 Residential real estate (1) 5,318 10,644 Other consumer (1) 2,926 3,064 Total non-performing loans $ 33,511 $ 35,527 (1) The six months ended June 30, 2025 included the sale of non-performing residential and consumer loans of $ 7.3 million. At June 30, 2025 and December 31, 2024, 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 June 30, 2025 and December 31, 2024, there were no loans greater than 90 days past due that were accruing interest. 35 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The following table presents the aging of the recorded investment in past due loans as of June 30, 2025 and December 31, 2024 by loan portfolio segment (in thousands): 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Loans Not Past Due Total June 30, 2025 Commercial real estate – investor $ 4,830 $ 3,184 $ 14,351 $ 22,365 $ 5,045,760 $ 5,068,125 Commercial and industrial: Commercial and industrial - real estate — 1,625 287 1,912 912,494 914,406 Commercial and industrial - non-real estate 619 188 307 1,114 861,390 862,504 Total commercial and industrial 619 1,813 594 3,026 1,773,884 1,776,910 Residential real estate 848 2,441 2,313 5,602 3,113,630 3,119,232 Other consumer 906 99 1,716 2,721 218,099 220,820 Total loans $ 7,203 $ 7,537 $ 18,974 $ 33,714 $ 10,151,373 $ 10,185,087 December 31, 2024 Commercial real estate – investor $ 4,624 $ 8,880 $ 10,877 $ 24,381 $ 5,263,302 $ 5,287,683 Commercial and industrial: Commercial and industrial - real estate 941 — 1,392 2,333 899,886 902,219 Commercial and industrial - non-real estate 3 — 16 19 647,926 647,945 Total commercial and industrial 944 — 1,408 2,352 1,547,812 1,550,164 Residential real estate 18,518 2,242 6,551 27,311 3,022,452 3,049,763 Other consumer 1,060 282 1,999 3,341 227,121 230,462 Total loans $ 25,146 $ 11,404 $ 20,835 $ 57,385 $ 10,060,687 $ 10,118,072 Loan Modifications to Borrowers Experiencing Financial Difficulty In accordance with Accounting Standards Update (“ASU”) 2022-02, 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. 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 June 30, 2025 and December 31, 2024, loans with modifications to borrowers experiencing financial difficulty totaled $ 40.1 million and $ 30.9 million, respectively. There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of June 30, 2025 or December 31, 2024. The following table presents loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 and 2024 (in thousands): Term Extension Combination of Term Extension and Other Than Insignificant Payment Delay Total % of Total by Loan Portfolio Segment For the three months ended June 30, 2025 Commercial real estate – investor $ — $ 4,449 $ 4,449 0.09 % $ — $ 4,449 $ 4,449 0.04 % For the six months ended June 30, 2025 Commercial real estate – investor $ 5,067 $ 4,449 $ 9,516 0.19 % $ 5,067 $ 4,449 $ 9,516 0.09 % 36 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Term Extension Interest Rate Reduction Combination of Term Extension and Interest Rate Reduction Other Than Insignificant Payment Delay Total % of Total by Loan Portfolio Segment For the three months ended June 30, 2024 Commercial real estate – investor $ — $ 4,878 $ 7,000 $ — $ 11,878 0.22 % $ — $ 4,878 $ 7,000 $ — $ 11,878 0.12 % For the six months ended June 30, 2024 Commercial real estate – investor $ — $ 4,878 $ 7,000 $ — $ 11,878 0.22 % Commercial and industrial - real estate — — — 2,994 2,994 0.35 Residential real estate 129 — — — 129 — Other consumer — — 148 — 148 0.06 $ 129 $ 4,878 $ 7,148 $ 2,994 $ 15,149 0.15 % 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 June 30, 2025 and 2024 (in thousands): Current 60 - 89 Days past due 90 Days or Greater past due Total June 30, 2025 Commercial real estate – investor $ 16,805 $ — $ — $ 16,805 $ 16,805 $ — $ — $ 16,805 June 30, 2024 Commercial real estate – investor $ 19,651 $ — $ — $ 19,651 Commercial and industrial - real estate 2,945 — — 2,945 Residential real estate 205 — — 205 Other consumer 170 147 — 317 $ 22,971 $ 147 $ — $ 23,118 Note 5. Deposits The major types of deposits at June 30, 2025 and December 31, 2024 were as follows (in thousands): Type of Account June 30, December 31, 2025 2024 Non-interest-bearing $ 1,686,627 $ 1,617,182 Interest-bearing checking 3,845,602 4,000,553 Money market deposit 1,377,999 1,301,197 Savings 1,022,918 1,066,438 Time deposits 2,299,296 2,080,972 Total deposits $ 10,232,442 $ 10,066,342 Included in time deposits at June 30, 2025 and December 31, 2024 was $ 419.9 million and $ 457.2 million, respectively, of deposits of $250,000 or more. Time deposits also include brokered deposits of $ 522.8 million and $ 74.7 million at June 30, 2025 and December 31, 2024, respectively. 37 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Note 6. Borrowed Funds Borrowed funds at June 30, 2025 and December 31, 2024 were as follows (in thousands): June 30, December 31, 2025 2024 FHLB advances $ 938,687 $ 1,072,611 Securities sold under agreements to repurchase with customers 61,490 60,567 Other borrowings 198,019 197,546 Total borrowed funds $ 1,198,196 $ 1,330,724 At June 30, 2025, there were $ 801.7 million of term advances and $ 137.0 million of overnight borrowings from the FHLB, as compared to $ 1.07 billion and none at December 31, 2024, respectively. Pledged assets The following table presents the assets pledged to secure borrowings, borrowing capacity, repurchase agreements, letters of credit, and for other purposes required by law at carrying value (in thousands): Loans Debt securities Total June 30, 2025 FHLB and FRB $ 7,324,626 $ 918,897 $ 8,243,523 Repurchase agreements — 64,720 64,720 Total pledged assets $ 7,324,626 $ 983,617 $ 8,308,243 December 31, 2024 FHLB and FRB $ 7,427,247 $ 984,515 $ 8,411,762 Repurchase agreements — 85,529 85,529 Total pledged assets $ 7,427,247 $ 1,070,044 $ 8,497,291 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. Note 7. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The Company uses valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability and developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability and developed based on the best information available in the circumstances. In that regard, a fair value hierarchy has been established for valuation inputs that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: 38 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlations or other means. Level 3 Inputs – Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. Assets and Liabilities Measured at Fair Value A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis, that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Debt Securities Available-for-Sale Debt securities classified as available-for-sale are reported at fair value. Fair value of U.S. Treasuries are determined using quoted prices in active markets (Level 1). The majority of the other debt securities are determined using inputs other than quoted prices that are based on market observable information (Level 2). Level 2 debt securities are priced through third-party pricing services or security industry sources that actively participate in the buying and selling of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing is a mathematical technique used principally to value certain debt securities without relying exclusively on quoted prices for the specific securities, but comparing the debt securities to benchmark or comparable debt securities. Equity Investments Equity investments with readily determinable fair value are reported at fair value. Fair value for these investments is primarily determined using a quoted price in an active market or exchange (Level 1) or using inputs other than quoted prices that are based on market observable information (Level 2). 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 net asset value (“NAV”) per share as a practical expedient, which are excluded from the fair value hierarchy levels in the table below. Interest Rate Derivatives The Company’s interest rate swaps and cap contracts are reported at fair value utilizing discounted cash flow models provided by an independent, third-party and observable market data (Level 2). 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 generally based on independent appraisals (Level 3), which may be adjusted by management for qualitative factors, such as economic factors and estimated liquidation expenses. 39 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The following table summarizes financial assets and financial liabilities measured at fair value as of June 30, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): Fair Value Measurements at Reporting Date Using: Total Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs June 30, 2025 Items measured on a recurring basis: Debt securities available-for-sale $ 735,561 $ 47,403 $ 688,158 $ — Equity investments 42,076 — 42,076 — Interest rate derivative asset 61,103 — 61,103 — Interest rate derivative liability ( 61,213 ) — ( 61,213 ) — Items measured on a non-recurring basis: Equity investments (1) (2) 45,732 — — 40,163 Other real estate owned 7,680 — — 7,680 Loans measured for impairment based on the fair value of the underlying collateral (3) 24,092 — — 24,092 December 31, 2024 Items measured on a recurring basis: Debt securities available-for-sale $ 827,500 $ 49,466 $ 778,034 $ — Equity investments 40,447 — 40,447 — Interest rate derivative asset 91,352 — 91,352 — Interest rate derivative liability ( 91,483 ) — ( 91,483 ) — Items measured on a non-recurring basis: Equity investments (1) (2) 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) 25,148 — — 25,148 (1) As of June 30, 2025 and December 31, 2024, equity investments included $ 40.2 million and $ 39.7 million, respectively, of equity investments measured under the measurement alternative. There were no unrealized gains or losses for the six months ended June 30, 2025 or the year ended December 31, 2024. (2) As of June 30, 2025 and December 31, 2024, equity investments included $ 5.6 million and $ 4.0 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. (3) Primarily consists of commercial loans, which are collateral dependent. The range of fair value adjustments may vary but is generally 0 % to 8 % on the discount for costs to sell and 0 % to 10 % on appraisal adjustments. 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 three and six months ended June 30, 2025 and 2024. 40 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Assets and Liabilities Disclosed at Fair Value A description of the valuation methodologies used for assets and liabilities disclosed at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy is set forth below. Cash and Due from Banks For cash and due from banks, the carrying amount approximates fair value. Debt Securities Held-to-Maturity 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 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. Prices for these instruments are obtained through third-party pricing vendors or security industry sources that actively participate in the buying and selling of debt securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing is a mathematical technique used principally to value certain debt securities without relying exclusively on quoted prices for the specific debt securities, but comparing the debt securities to benchmark or comparable debt securities. Management’s policy is to obtain and review all available documentation from the third-party pricing service relating to their fair value determinations, including their methodology and summary of inputs. 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. Restricted Equity Investments The fair value of these investments, which are primarily Federal Home Loan Bank of New York and Federal Reserve Bank stock, is its carrying value since this is the amount for which it could be redeemed. There is no active market for this stock and the Company is required to maintain a minimum investment as stipulated by the respective entities. Loans Receivable and Loans Held-for-Sale Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential real estate, consumer and commercial. Each loan category is further segmented into fixed and adjustable rate interest terms. Fair value of performing and non-performing loans, which is based on an exit price notion, was estimated by discounting the future cash flows, net of estimated prepayments, at market discount rates that reflect the credit and interest rate risk inherent in the loan. 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. Deposits Other than Time Deposits The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, and interest-bearing checking accounts and money market accounts is, by definition, equal to the amount payable on demand. The related insensitivity of the majority of these deposits to interest rate changes creates a significant inherent value which is not reflected in the fair value reported. Time Deposits The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. FHLB Advances and Other Borrowings Fair value estimates are based on discounting contractual cash flows using rates which approximate the rates offered for borrowings of similar remaining maturities. Securities Sold Under Agreements to Repurchase with Customers Fair value approximates the carrying amount as these borrowings are payable on demand and the interest rate adjusts monthly. 41 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The book value and estimated fair value of the Company’s significant financial instruments not recorded at fair value as of June 30, 2025 and December 31, 2024 are presented in the following tables (in thousands): Fair Value Measurements at Reporting Date Using: Book Value Level 1 Inputs Level 2 Inputs Level 3 Inputs June 30, 2025 Financial Assets: Cash and due from banks $ 170,599 $ 170,599 $ — $ — Debt securities held-to-maturity 968,969 — 896,090 — Restricted equity investments 106,538 — — 106,538 Loans receivable, net and loans held-for-sale 10,135,525 — — 9,676,888 Financial Liabilities: Deposits other than time deposits (1) 7,933,146 — 7,933,146 — Time deposits 2,299,296 — 2,290,436 — FHLB advances and other borrowings 1,136,706 — 1,151,601 — Securities sold under agreements to repurchase with customers 61,490 61,490 — — December 31, 2024 Financial Assets: Cash and due from banks $ 123,615 $ 123,615 $ — $ — Debt securities held-to-maturity 1,045,875 — 952,917 — Restricted equity investments 108,634 — — 108,634 Loans receivable, net and loans held-for-sale 10,076,640 — — 9,551,156 Financial Liabilities: Deposits other than time deposits (1) 7,985,370 — 7,985,370 — Time deposits 2,080,972 — 2,074,698 — FHLB advances and other borrowings 1,270,157 — 1,264,260 — Securities sold under agreements to repurchase with customers 60,567 60,567 — — (1) The estimated fair value of non-maturity deposits does not consider any inherent value and represents the amount payable on demand. However, non-maturity deposits do contain significant inherent value to the Company, particularly when overnight funding costs are greater than the deposit costs. Limitations 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. 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. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include premises and equipment, bank owned life insurance, and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. 42 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Note 8. Derivatives and Hedging Activities The Company enters into derivative financial instruments which involve, to varying degrees, interest rate and credit risk. The Company manages these risks as part of its asset and liability management process and through credit policies and procedures, seeking to minimize counterparty credit risk by establishing credit limits and collateral agreements. The Company utilizes derivative financial instruments to accommodate the business needs of its customers as well as to economically hedge the exposure that this creates for the Company. Additionally, the Company enters into certain derivative financial instruments to enhance its ability to manage interest rate risk that exists as part of its ongoing business operations. The Company does not use derivative financial instruments for trading purposes. Customer Derivatives – Interest Rate Swaps and Cap Contracts Derivatives Not Designated as Hedging Instruments The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The Company also enters into interest rate cap contracts that enable commercial loan customers to lock in a cap on a variable-rate commercial loan agreement. This feature prevents the loan from repricing to a level that exceeds the cap contract’s specified interest rate, which serves to hedge the risk from rising interest rates. The Company then enters into an offsetting interest rate cap contract with a third party in order to economically hedge its exposure through the customer agreement. These interest rate swaps and cap contracts with both the customers and third parties are not designated as hedges under ASC Topic 815, Derivatives and Hedging, therefore changes in fair value are reported in earnings. As the interest rate swaps and cap contracts are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; 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 $ 9,000 and $ 25,000 in commercial loan swap income resulting from the fair value adjustments for the three and six months ended June 30, 2025, respectively, as compared to losses of $ 2,000 and gains of $ 11,000 for the corresponding prior year periods. Derivatives Designated as Hedging Instruments 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 Secured Overnight Financing Rate (“SOFR”) to the counterparty in exchange for the receipt of fixed-rate amounts at 4.0 % from the counterparty. The swap was designated and qualified as a cash flow hedge under ASC Topic 815, Derivatives and Hedging. The changes in the fair value of cash flow hedges are initially reported in other comprehensive income. Amounts are subsequently reclassified from accumulated other comprehensive income to earnings when the hedged transactions occur, specifically within the same line item as the hedged item (interest income). Therefore, a portion of the balance reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are made or received on the Company’s interest rate swaps. The table below presents the effect on the Company’s accumulated other comprehensive income/loss (“AOCI” or “AOCL”) attributable to the cash flow hedge derivative, net of tax, and the related gains/losses reclassified from AOCI into income (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 AOCL balance at beginning of period, net of tax $ ( 23 ) $ ( 726 ) $ ( 87 ) $ ( 36 ) Unrealized losses recognized in OCI ( 93 ) ( 306 ) ( 93 ) ( 1,255 ) Losses reclassified from AOCI into interest income 64 256 128 515 AOCL balance at end of period, net of tax $ ( 52 ) $ ( 776 ) $ ( 52 ) $ ( 776 ) For the year ending 2025, the Company estimates that an additional $ 68,000 will be reclassified as a reduction to interest income. 43 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The table below presents the notional amount and fair value of derivatives designated and not designated as hedging instruments, as well as their location on the Consolidated Statements of Financial Condition (in thousands): Notional Fair Value Other assets Other liabilities As of June 30, 2025 Derivatives Not Designated as Hedging Instruments Interest rate swaps and cap contracts $ 1,450,992 $ 61,103 $ 61,145 Derivatives Designated as Cash Flow Hedge Interest rate swap contract 100,000 — 68 Total Derivatives $ 1,550,992 $ 61,103 $ 61,213 As of December 31, 2024 Derivatives Not Designated as Hedging Instruments Interest rate swaps and cap contracts $ 1,468,022 $ 91,352 $ 91,368 Derivatives Designated as Cash Flow Hedge Interest rate swap contract 100,000 — 115 Total Derivatives $ 1,568,022 $ 91,352 $ 91,483 Credit Risk-Related Contingent Features The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by being a party to International Swaps and Derivatives Association agreements with third-party broker-dealers that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. There was no collateral posted by the Company with third parties at both June 30, 2025 and December 31, 2024. The amount of collateral received from third parties was $ 54.4 million and $ 93.3 million at June 30, 2025 and December 31, 2024, respectively. The amount of collateral posted with third parties and received from third parties is deemed to be sufficient to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. The aggregate fair value of all derivative financial instruments in a liability position with credit measure contingencies and entered into with third parties was $ 61.2 million and $ 91.5 million at June 30, 2025 and December 31, 2024, respectively. The interest rate derivatives which the Company executes with the commercial borrowers are collateralized by the borrowers’ commercial real estate financed by the Company. 44 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) Note 9. Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2038. The Company has one existing finance lease, which has a lease term through 2029. The following table represents the classification of the Company’s Right of Use (“ROU”) assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands): June 30, December 31, 2025 2024 Lease ROU Assets Classification Operating lease ROU assets Other assets $ 14,972 $ 15,452 Finance lease ROU asset Premises and equipment, net 955 1,071 Total lease ROU assets $ 15,927 $ 16,523 Lease Liabilities Operating lease liabilities (1) Other liabilities $ 16,466 $ 17,114 Finance lease liability Other borrowings 1,284 1,421 Total lease liabilities $ 17,750 $ 18,535 (1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $ 1.1 million and $ 4.4 million at June 30, 2025 and December 31, 2024, respectively. The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception. June 30, December 31, 2025 2024 Weighted-Average Remaining Lease Term Operating leases 5.74 years 5.84 years Finance lease 4.10 years 4.59 years Weighted-Average Discount Rate Operating leases 3.29 % 3.08 % Finance lease 5.63 5.63 45 Table of Contents OceanFirst Financial Corp. Notes to Unaudited Consolidated Financial Statements (Continued) The following table represents lease expenses and other lease information (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Lease Expense Operating lease expense $ 1,227 $ 1,146 $ 2,430 $ 2,305 Finance lease expense: Amortization of ROU assets 58 58 116 116 Interest on lease liabilities (1) 19 22 38 45 Total $ 1,304 $ 1,226 $ 2,584 $ 2,466 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,316 $ 1,021 $ 2,605 $ 2,122 Operating cash flows from finance leases 19 22 38 45 Financing cash flows from finance leases 69 65 137 130 (1) Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income. Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands): Finance Lease Operating Leases For the Year Ending December 31, 2025 $ 175 $ 2,559 2026 350 4,528 2027 350 3,058 2028 350 1,891 2029 209 1,787 Thereafter — 4,449 Total 1,434 18,272 Less: Imputed interest ( 150 ) ( 1,806 ) Total lease liabilities $ 1,284 $ 16,466 Note 10. Variable Interest Entity The Company accounts for Trident as a variable interest entity (“VIE”) under ASC 810, Consolidation, for which the Company is considered the primary beneficiary (i.e. the party that has a controlling financial interest). In accordance with ASC 810, Consolidation, the Company has consolidated Trident’s assets and liabilities. The summarized financial information for the Company’s consolidated VIE at June 30, 2025 and December 31, 2024 consisted of the following (in thousands): June 30, 2025 December 31, 2024 Cash and cash equivalents $ 33,015 $ 21,642 Other assets 356 457 Total assets 33,371 22,099 Other liabilities 31,286 19,333 Net assets $ 2,085 $ 2,766 46 Table of Contents PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company and the Bank are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings in the aggregate are believed by management to be immaterial to the Company’s financial condition or results of operations.