OCEANFIRST FINANCIAL CORP 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of OceanFirst Financial Corp. Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of OceanFirst Financial Corp. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the 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 audits 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 financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Allowance for Loan Credit Losses - Refer to Notes 1 and 5 to the financial statements Critical Audit Matter Description The allowance for loan credit losses (“ACL”) is management's estimate of credit losses currently expected over the life of the loan portfolio, or the amount of amortized cost basis not expected to be collected, at the balance sheet date. The Company’s methodology to measure the ACL incorporates both quantitative and qualitative information to assess lifetime expected credit losses at the portfolio segment level. The quantitative component includes the calculation of loss rates using an open pool method. Under this method, the Company calculates a loss rate based on historical loan level loss experience for portfolio segments with similar risk characteristics. The historical loss rate is adjusted for select macroeconomic variables that consider both historical trends as well as forecasted trends for a single economic scenario. 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 70 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. Adjustments will not be made for information that has already been considered and included in the quantitative allowance. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data, changes in loan composition, performance trends, regulatory changes, uncertainty of macroeconomic forecasts, and other asset specific risk characteristics. We identified the ACL as a critical audit matter because of the complexity of the Company’s model and the significant assumptions used by management. Auditing the ACL required a high degree of auditor judgment and an increased extent of effort, including the need to involve credit specialists when performing audit procedures to evaluate the reasonableness of management’s model and assumptions. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to qualitative adjustments within the ACL included the following, among others: • We tested the design and operating effectiveness of management’s controls covering the key data, assumptions and judgments impacting the ACL. • 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 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. Goodwill - Refer to Note 1 to the financial statements Critical Audit Matter Description The Company performs an annual goodwill impairment test over the Company’s single reporting unit, as of August 31st or whenever certain triggering events occur or if changes in circumstances indicate potential impairment. An impairment charge is recognized when and to the extent the Company’s carrying amount is determined to exceed its fair value. 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. The Company did not identify any triggering events between the annual assessment date and December 31, 2025. 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 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. 71 • 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, PA February 27, 2026 We have served as the Company’s auditor since 2022. 72 Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of OceanFirst Financial Corp. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of OceanFirst Financial Corp. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 27, 2026, expressed an unqualified opinion on those financial statements. 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 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. We are a public accounting firm registered with the 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Philadelphia, PA February 27, 2026 73 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands, except per share amounts) December 31, 2025 December 31, 2024 Assets Cash and due from banks $ 135,130 $ 123,615 Debt securities available-for-sale, at estimated fair value (encumbered $ 897,491 at December 31, 2025 and $ 470,844 at December 31, 2024) 1,231,827 827,500 Debt securities held-to-maturity, net of allowance for securities credit losses of $ 811 at December 31, 2025 and $ 967 at December 31, 2024 (estimated fair value of $ 825,790 at December 31, 2025 and $ 952,917 at December 31, 2024) (encumbered $ 543,425 at December 31, 2025 and $ 599,200 at December 31, 2024) 881,568 1,045,875 Equity investments (encumbered $ 4,975 at December 31, 2025 and $ 0 at December 31, 2024) 91,882 84,104 Restricted equity investments, at cost 129,329 108,634 Loans receivable, net of allowance for loan credit losses of $ 83,726 at December 31, 2025 and $ 73,607 at December 31, 2024 10,970,666 10,055,429 Loans held-for-sale 5,768 21,211 Interest and dividends receivable 49,010 45,914 Other real estate owned 10,266 1,811 Premises and equipment, net 112,743 115,256 Bank owned life insurance 270,301 270,208 Goodwill 517,481 523,308 Intangibles 9,046 12,680 Other assets 149,300 185,702 Total assets $ 14,564,317 $ 13,421,247 Liabilities and Stockholders’ Equity Deposits $ 10,964,405 $ 10,066,342 FHLB advances 1,397,179 1,072,611 Securities sold under agreements to repurchase with customers 54,434 60,567 Other borrowings 255,233 197,546 Advances by borrowers for taxes and insurance 21,245 23,031 Other liabilities 209,271 298,393 Total liabilities 12,901,767 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 December 31, 2025 and December 31, 2024, respectively. — 1 Common stock, $ 0.01 par value, 150,000,000 shares authorized, 62,942,427 and 62,673,192 shares issued at December 31, 2025 and December 31, 2024, respectively; and 57,390,569 and 58,554,871 shares outstanding at December 31, 2025 and December 31, 2024, respectively 625 613 Additional paid-in capital 1,118,331 1,168,321 Retained earnings 662,616 641,727 Accumulated other comprehensive loss ( 2,159 ) ( 15,853 ) Less: Unallocated common stock held by ESOP ( 1,301 ) ( 2,542 ) Treasury stock, 5,551,858 and 4,118,321 shares at December 31, 2025 and December 31, 2024, respectively ( 115,562 ) ( 90,617 ) OceanFirst Financial Corp. stockholders’ equity 1,662,550 1,701,650 Non-controlling interest — 1,107 Total stockholders’ equity 1,662,550 1,702,757 Total liabilities and stockholders’ equity $ 14,564,317 $ 13,421,247 See accompanying Notes to Consolidated Financial Statements. 74 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) For the Year Ended December 31, 2025 2024 2023 Interest income: Loans $ 556,894 $ 545,243 $ 521,865 Debt securities 72,057 77,749 59,273 Equity investments and other 13,503 19,181 26,836 Total interest income 642,454 642,173 607,974 Interest expense: Deposits 216,180 242,133 172,018 Borrowed funds 66,051 66,005 66,225 Total interest expense 282,231 308,138 238,243 Net interest income 360,223 334,035 369,731 Provision for credit losses 16,171 7,689 17,678 Net interest income after provision for credit losses 344,052 326,346 352,053 Other income (loss): Bankcard services revenue 6,534 6,197 5,912 Trust and asset management revenue 1,514 1,745 2,529 Fees and service charges 17,865 21,791 21,254 Net gain on sales of loans 3,686 2,358 428 Net gain (loss) on equity investments 916 4,225 ( 3,732 ) Net loss from other real estate operations ( 285 ) ( 20 ) — Income from bank owned life insurance 7,753 7,905 5,280 Commercial loan swap income 3,649 879 741 Other 3,069 5,107 1,212 Total other income 44,701 50,187 33,624 Operating expenses: Compensation and employee benefits 159,353 138,341 135,802 Occupancy 22,874 20,811 21,188 Equipment 3,597 4,250 4,650 Marketing 5,653 5,165 4,238 Federal deposit insurance and regulatory assessments 11,599 10,955 11,157 Data processing 27,723 24,280 24,835 Check card processing 4,582 4,412 4,640 Professional fees 15,090 9,483 18,297 Amortization of intangibles 3,634 3,333 3,984 Branch consolidation expense, net — — 70 Merger related expenses 4,253 1,779 22 Restructuring charges 11,526 — — Other operating expense 26,353 23,068 20,029 Total operating expenses 296,237 245,877 248,912 Income before provision for income taxes 92,516 130,656 136,765 Provision for income taxes 21,489 30,266 32,700 Net income 71,027 100,390 104,065 Net income attributable to non-controlling interest 49 325 36 Net income attributable to OceanFirst Financial Corp. 70,978 100,065 104,029 Dividends on preferred shares 2,008 4,016 4,016 Loss on redemption of preferred stock 1,842 — — Net income available to common stockholders $ 67,128 $ 96,049 $ 100,013 Basic earnings per share $ 1.17 $ 1.65 $ 1.70 Diluted earnings per share $ 1.17 $ 1.65 $ 1.70 Average basic shares outstanding 57,419 58,296 58,948 Average diluted shares outstanding 57,425 58,297 58,957 See accompanying Notes to Consolidated Financial Statements. 75 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the Year Ended December 31, 2025 2024 2023 Net income $ 71,027 $ 100,390 $ 104,065 Other comprehensive income: Unrealized gain on debt securities (net of tax expense of $ 4,235 , $ 1,561 and $ 4,560 in 2025, 2024 and 2023, respectively) 13,293 4,698 14,312 Accretion of unrealized loss on debt securities reclassified to held-to-maturity (net of tax expense of $ 200 , $ 169 and $ 213 in 2025, 2024, and 2023, respectively) 288 244 290 Unrealized loss on cash flow derivative hedges (net of tax benefit of $ 34 , $ 304 and $ 257 in 2025, 2024 and 2023, respectively) ( 108 ) ( 956 ) ( 808 ) Reclassification adjustment for loss included in net income (net of tax expense of $ 70 , $ 326 and $ 423 in 2025, 2024 and 2023, respectively) 221 1,023 1,326 Total other comprehensive income, net of tax 13,694 5,009 15,120 Total comprehensive income 84,721 105,399 119,185 Less: comprehensive income attributable to non-controlling interest 49 325 36 Total comprehensive income attributable to OceanFirst Financial Corp. 84,672 105,074 119,149 Less: dividends on preferred shares 2,008 4,016 4,016 Less: loss on redemption of preferred stock 1,842 — — Total comprehensive income available to common stockholders $ 80,822 $ 101,058 $ 115,133 See accompanying Notes to Consolidated Financial Statements. 76 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (dollars in thousands, except per share amounts) For the Years Ended December 31, 2025, 2024 and 2023 Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss) Gain Employee Stock Ownership Plan Treasury Stock Non-Controlling Interest Total 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 income, net of tax — — — — 15,120 — — — 15,120 Stock compensation — — 5,854 — — — — — 5,854 Allocation of ESOP stock — — ( 341 ) — — 2,411 — — 2,070 Cash dividend – $ 0.80 per share — — — ( 47,258 ) — — — — ( 47,258 ) Exercise of stock options — 1 1,421 ( 720 ) — — — — 702 Preferred stock dividend — — — ( 4,016 ) — — — — ( 4,016 ) Distribution to non-controlling interest — — — — — — — ( 55 ) ( 55 ) Balance at December 31, 2023 1 613 1,161,755 592,542 ( 20,862 ) ( 3,780 ) ( 69,106 ) 782 1,661,945 Net income — — — 100,065 — — — 325 100,390 Other comprehensive income, net of tax — — — — 5,009 — — — 5,009 Stock compensation — — 6,084 — — — — — 6,084 Allocation of ESOP stock — — ( 124 ) — — 1,238 — — 1,114 Cash dividend – $ 0.80 per share — — — ( 46,864 ) — — — — ( 46,864 ) Exercise of stock options — — 571 — — — — — 571 Repurchase 1,383,238 shares of common stock — — 35 — — — ( 21,511 ) — ( 21,476 ) Preferred stock dividend — — — ( 4,016 ) — — — — ( 4,016 ) 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 — — — 70,978 — — — 49 71,027 Other comprehensive income, net of tax — — — — 13,694 — — — 13,694 Stock compensation — 12 4,857 — — — — — 4,869 Allocation of ESOP stock — — ( 74 ) — — 1,241 — — 1,167 Cash dividend – $ 0.80 per share — — — ( 46,239 ) — — — — ( 46,239 ) Exercise of stock options — — 717 — — — — — 717 Repurchase 1,433,537 shares of common stock — — 37 — — — ( 24,945 ) — ( 24,908 ) Preferred stock dividend — — — ( 2,008 ) — — — — ( 2,008 ) Redemption of preferred stock ( 1 ) — ( 55,527 ) ( 1,842 ) — — — — ( 57,370 ) Deconsolidation of Trident — — — — — — — ( 841 ) ( 841 ) Distribution to non-controlling interest — — — — — — — ( 315 ) ( 315 ) Balance at December 31, 2025 $ — $ 625 $ 1,118,331 $ 662,616 $ ( 2,159 ) $ ( 1,301 ) $ ( 115,562 ) $ — $ 1,662,550 See accompanying Notes to Consolidated Financial Statements. 77 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) For the Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 71,027 $ 100,390 $ 104,065 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment 10,300 10,903 12,327 Allocation of ESOP stock 1,167 1,114 2,070 Stock compensation 4,869 6,084 5,854 Net excess tax expense on stock compensation 195 365 243 Amortization of intangibles 3,634 3,333 3,984 Net accretion of purchase accounting adjustments ( 1,455 ) ( 2,865 ) ( 5,848 ) Amortization of servicing asset 480 308 90 Net (discount) premium amortization in excess of discount accretion on securities ( 3,539 ) 870 3,133 Net amortization of deferred costs on borrowings 338 626 598 Net amortization of deferred fees/costs and premiums/discounts on loans ( 9,429 ) ( 3,055 ) ( 1,094 ) Provision for credit losses 16,171 7,689 17,678 Net write-down of fixed assets held-for-sale to net realizable value — — 459 Net loss (gain) on sale of fixed assets 2 ( 131 ) ( 26 ) Net (gain) loss on equity investments ( 916 ) ( 4,225 ) 3,732 Net gain on sales of loans ( 3,686 ) ( 2,358 ) ( 428 ) Net loss on sale of available-for-sale securities 34 106 697 Proceeds from sales of residential loans held for sale 504,329 270,171 58,495 Residential loans originated for sale ( 485,200 ) ( 283,858 ) ( 62,543 ) Write down of other real estate owned 198 — — Increase in value of bank owned life insurance ( 7,246 ) ( 6,566 ) ( 5,280 ) Net (gain) loss on sale of assets held for sale — ( 855 ) 233 (Increase) decrease in interest and dividends receivable ( 3,096 ) 5,960 ( 7,170 ) Deferred tax provision (benefit) 3,009 ( 337 ) 3,151 Net loss on disposal of controlling interest in Trident 4,338 — — Decrease (increase) in other assets 29,319 ( 3,364 ) 34,504 Decrease in other liabilities ( 47,632 ) ( 8,062 ) ( 44,663 ) Total adjustments 16,184 ( 8,147 ) 20,196 Net cash provided by operating activities 87,211 92,243 124,261 Cash flows from investing activities: Net (increase) decrease in loans receivable ( 913,989 ) 199,094 ( 243,545 ) Purchases of loan pools ( 26,859 ) ( 84,464 ) ( 35,904 ) Discounts received (premiums paid) on purchased loan pools 2,562 8,397 ( 1,210 ) Proceeds from sale of loans 8,640 — — Purchase of debt securities available-for-sale ( 809,714 ) ( 256,784 ) ( 302,909 ) Purchase of debt securities held-to-maturity — ( 6,971 ) ( 65,567 ) Purchase of equity investments ( 7,647 ) ( 3,082 ) ( 7,661 ) Proceeds from maturities and calls of debt securities available-for-sale 9,914 19,537 22,376 Proceeds from maturities and calls of debt securities held-to-maturity 52,715 22,217 19,425 Proceeds from sales of debt securities available-for-sale 141,638 7,121 1,300 Proceeds from sales of equity investments 365 22,782 4,822 Principal repayments on debt securities available-for-sale 269,737 162,329 926 Principal repayments on debt securities held-to-maturity 114,613 100,472 108,037 Proceeds from bank owned life insurance 7,153 2,856 385 78 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (dollars in thousands) For the Year Ended December 31, 2025 2024 2023 Cash flows from investing activities (continued): Proceeds from the redemption of restricted equity investments 336,020 81,199 128,964 Purchases of restricted equity investments ( 356,715 ) ( 96,067 ) ( 113,447 ) Proceeds from sales of other real estate owned 912 — — Proceeds from sales of assets held-for-sale — 883 3,719 Purchases of premises and equipment ( 7,700 ) ( 7,567 ) ( 7,708 ) Proceeds from disposal of premises and equipment — 3,380 — Proceeds from disposal of controlling interest in Trident 2,750 — — Net cash consideration paid for acquisition — ( 68,932 ) — Net cash (used in) provided by investing activities ( 1,175,605 ) 106,400 ( 487,997 ) Cash flows from financing activities: Net increase (decrease) in deposits 857,974 ( 366,502 ) 760,023 (Decrease) increase in short-term borrowings ( 6,204 ) ( 12,667 ) 3,950 Net proceeds (repayment) from FHLB advances 324,568 223,975 ( 362,530 ) Net proceeds from issuance of subordinated notes 181,882 — — Repayments of other borrowings ( 125,000 ) — — (Decrease) increase in advances by borrowers for taxes and insurance ( 1,786 ) 624 1,002 Exercise of stock options 717 571 702 Payment of employee taxes withheld from stock awards ( 1,402 ) ( 2,391 ) ( 2,350 ) Purchase of treasury stock ( 24,908 ) ( 21,476 ) — Dividends paid ( 48,247 ) ( 50,880 ) ( 51,274 ) Redemption of preferred stock ( 57,370 ) — — Distributions to non-controlling interest ( 315 ) — ( 55 ) Net cash provided by (used) in financing activities 1,099,909 ( 228,746 ) 349,468 Net increase (decrease) in cash and due from banks and restricted cash 11,515 ( 30,103 ) ( 14,268 ) Cash and due from banks and restricted cash at beginning of year 123,615 153,718 167,986 Cash and due from banks and restricted cash at end of year $ 135,130 $ 123,615 $ 153,718 Supplemental disclosure of cash flow information: Cash and due from banks at beginning of year $ 123,615 $ 153,718 $ 167,946 Restricted cash at beginning of year — — 40 Cash and due from banks and restricted cash at beginning of year $ 123,615 $ 153,718 $ 167,986 Cash and due from banks at end of year $ 135,130 $ 123,615 $ 153,718 Restricted cash at end of year — — — Cash and due from banks and restricted cash at end of year $ 135,130 $ 123,615 $ 153,718 Cash paid during the year for: Interest $ 279,171 $ 320,264 $ 225,405 Income taxes 20,689 33,786 29,331 Non-cash activities: Accretion of unrealized loss on securities reclassified to held-to-maturity 487 413 503 Net loan charge-offs 5,445 1,555 8,382 Transfer of premises and equipment to assets held-for-sale — — 1,302 Transfer of securities from held-to-maturity to available-for-sale — 500 — Transfer of loans receivable to other real estate owned 9,565 — — Transfer of loans receivable to loans held-for-sale 8,640 — — Settlement of preexisting loan receivable from Spring Garden — 96,979 — 79 OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (dollars in thousands) For the Year Ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information (continued): Acquisition: Non-cash assets acquired: Loans $ — $ 140,062 $ — Premises and equipment — 157 — Other real estate owned — 1,666 — Other assets — 1,122 — Goodwill and other intangible assets, net — 23,662 — Total non-cash assets acquired $ — $ 166,669 $ — Liabilities assumed: Other liabilities — 4,033 — Total lease and other liabilities $ — $ 4,033 $ — Total liabilities assumed $ — $ 4,033 $ — See accompanying Notes to Consolidated Financial Statements. 80 Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies Principles of Consolidation 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; and Spring Garden (and its subsidiaries). All significant intercompany accounts and transactions have been eliminated in consolidation. In 2025, the Company adjusted the presentation of 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 adjusted the presentation of 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. Prior year amounts have been conformed to this change in presentation. Business 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 from Massachusetts through Virginia. The Bank is subject to competition from other financial institutions and certain technology companies. It is also subject to the regulations of certain regulatory agencies and undergoes periodic examinations by those regulatory authorities. Basis of Financial Statement Presentation The consolidated financial statements have been prepared in conformity with U.S. GAAP. The preparation of the accompanying consolidated financial statements, in conformity with these accounting principles, requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses and goodwill. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current and forecasted economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes, including in the economic environment, will be reflected in the financial statements in future periods. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, cash items in the process of collection, and interest-bearing deposits in other financial institutions. For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Securities Securities include debt securities HTM and debt securities AFS. Debt securities include U.S. government and agency obligations, state and municipal debt obligations, corporate debt securities, asset-backed securities, and MBS. MBS includes: agency residential and commercial MBS which are issued and guaranteed by one of the FHLMC, the FNMA, the GNMA, or the SBA; and non-agency commercial MBS. Management determines the appropriate classification at the time of purchase. If management has the positive intent not to sell a security and the Company would not be required to sell such a security prior to maturity, the securities can be classified as HTM debt securities. Such securities are stated at amortized cost. Securities in the AFS category are securities which the Company may sell prior to maturity as part of its asset/liability management strategy. Such securities are carried at estimated fair value and unrealized gains and losses, net of related tax effect, are excluded from earnings, but are included as a separate 81 component of stockholders’ equity and as part of other comprehensive income. Gains or losses on the sale of such securities are included in other income using the specific identification method. Discounts and premiums on debt securities are accreted or amortized using the level-yield method over the estimated lives of the securities, including the effect of prepayments. Upon the transfer of debt securities from AFS to HTM classification, unrealized gains or losses at the transfer date continue to be reflected in accumulated other comprehensive income and are amortized into interest income over the remaining life of the securities. Securities also include equity investments. Equity investments with readily determinable fair value are reported at fair value, with changes in fair value reported in net income. 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. Credit Losses for Available-for-Sale Debt Securities For AFS debt securities where fair value is less than amortized cost, the security is considered impaired when amounts are deemed uncollectible or when the Company intends, or more likely than not will be required, to sell the AFS debt security before recovery of the amortized cost basis. On a quarterly basis the Company evaluates the AFS debt securities for impairment. Securities that are in an unrealized loss position are reviewed to determine if a securities credit loss exists based on certain quantitative and qualitative factors. The primary factors considered in evaluating whether an impairment exists include: (a) the extent to which the fair value is less than the amortized cost basis, (b) the financial condition, credit rating and future prospects of the issuer, (c) whether the debtor is current on contractually obligated interest and principal payments, and (d) whether the Company intends to sell the security and whether it is more likely than not that the Company will not be required to sell the security. If a determination is made that an AFS debt security is impaired, the Company will estimate the amount of the unrealized loss that is attributable to credit and all other non-credit related factors. The credit related component will be recognized as a securities provision for credit losses through an allowance for securities credit losses. The securities provision for credit losses will be limited to the difference between the security’s amortized cost basis and fair value and any future changes may be reversed, limited to the amount previously expensed, in the period they occur. The non-credit related component will be recorded as an adjustment to accumulated other comprehensive income, net of tax. The evaluation of securities for impairment is a quantitative and qualitative process, which is subject to risks and uncertainties and is intended to determine whether declines in the estimated fair value of investments should be recognized in current period earnings. The risks and uncertainties include changes in general economic conditions, the issuer’s financial condition and/or future prospects, the effects of changes in interest rates or credit spreads, and the expected recovery period. Loans Receivable Loans receivable, other than loans held-for-sale, are stated at unpaid principal balance, plus unamortized premiums less unearned discounts, net of deferred loan origination and commitment fees and costs, and the associated allowance for loan credit losses. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net fee or cost is recognized in interest income using the level-yield method over the contractual life of the specifically identified loans, adjusted for actual prepayments. For each loan class, a loan is considered past due when a payment has not been received in accordance with the contractual terms. Loans which are more than 90 days past due, and other loans in the process of foreclosure, are placed on non-accrual status. Interest income previously accrued on these loans, but not yet received, is reversed in the current period. Any interest subsequently collected is credited to income in the period of recovery only after the full principal balance has been brought current and has returned to accrual status. A loan is returned to accrual status when all amounts due have been received, payments remain current for a period of six months, and the remaining principal and interest are deemed collectible. Loans are charged-off in the period the loans, or portion thereof, are deemed uncollectible. 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 and Mortgage Servicing Rights 82 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. ACL Under the CECL model, the allowance for credit losses on financial assets is a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the financial assets’ amortized cost basis to present the net amount expected to be collected on the financial assets. The CECL model also applies to certain off-balance sheet credit exposures. The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to write-off accrued interest receivable by reversing interest income in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the amortized cost basis and therefore excludes it from the measurement of the ACL. Expected credit losses are reflected in the ACL through a charge to provision for credit losses. The Company’s estimate of the ACL reflects credit losses currently expected over the remaining contractual life of the assets. When the Company deems all or a portion of a financial asset to be uncollectible the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgment to determine when a financial asset is deemed uncollectible. When available information confirms that specific financial assets, or portions thereof, are uncollectible, these amounts are charged off against the ACL. Subsequent recoveries, if any, are credited to the ACL when received. The Company measures the ACL of financial assets on a collective portfolio segment basis when the financial assets share similar risk characteristics. The Company has identified the following portfolio segments of financial assets with similar risk characteristics for measuring expected credit losses: commercial real estate - investor (including commercial real estate - construction and land), commercial and industrial - real estate, commercial and industrial - non-real estate, residential real estate, consumer (including student loans) and HTM debt securities. The Company further segments the commercial loan portfolios by risk rating and the residential and consumer loan portfolios by delinquency. The HTM portfolio is segmented by rating category. The Company’s methodology to measure the ACL incorporates both quantitative and qualitative information to assess lifetime expected credit losses at the portfolio segment level. The quantitative component includes the calculation of loss rates using an open pool method. Under this method, the Company calculates a loss rate based on historical loan level loss experience for portfolio segments with similar risk characteristics. The historical loss rate is adjusted for select macroeconomic variables that consider both historical trends as well as forecasted trends for a single economic scenario. 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 differentiates its loss-rate method for HTM debt securities by looking to publicly available historical default and recovery statistics based on the attributes of issuer type, rating category and time to maturity. The Company measures expected credit losses of these financial assets by applying loss rates to the amortized cost basis of each asset taking into consideration amortization, prepayment and default assumptions. The 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. Adjustments will not be made for information that has already been considered and included in the quantitative allowance. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data, changes in loan composition, performance trends, regulatory changes, uncertainty of macroeconomic forecasts, and other asset specific risk characteristics. 83 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. Fair value is generally calculated based on the value of the underlying collateral less an appraisal discount and the estimated cost to sell. Modification to Borrowers Experiencing Financial Difficulty The Company adopted ASU 2022-02 on January 1, 2023, which eliminated recognition and measurement for TDR by creditors. The Company considers a loan to be a modification to borrowers experiencing financial difficulty if (1) the borrower is experiencing financial difficulty; 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. Loan Commitments and Allowance for Loan Credit Losses on Off-Balance Sheet Credit Exposures Financial assets include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to loan credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for loan credit losses on off-balance sheet credit exposures through a charge to loan provision for credit losses for off-balance sheet credit exposures. The ACL on off-balance sheet credit exposures is estimated by portfolio segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration management’s assumption of the likelihood that funding will occur, and is included in other liabilities on the Company’s Consolidated Statements of Financial Condition. Acquired Loans Acquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, loan term and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain acquired loans are grouped together according to similar risk characteristics and are aggregated when applying various valuation techniques. These cash flow evaluations are subjective as they require material estimates, all of which may be susceptible to significant change. Loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered PCD loans. The Company evaluated acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) modifications to borrowers experiencing financial difficulty; (3) risk ratings of special mention, substandard or doubtful; (4) watchlist credits; and (5) delinquency status, including loans that were current on acquisition date, but had been previously delinquent. At the acquisition date, an estimate of expected credit losses was made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no provision for credit losses recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. For acquired loans not deemed PCD at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as a provision for credit losses. 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. 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. 84 Premises and Equipment 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. Generally, depreciable lives are as follows: computer software and equipment: 3 years; furniture, fixtures and other electronic equipment: 5 years; building improvements: 10 years; leasehold improvements: the shorter of 10 years or lease term; buildings: 30 years; ITM: 7 years; automobiles: 3 years; solar power system: 25 years; 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. The Company has not developed any internal use software. Repair and maintenance items are expensed and improvements are capitalized. Gains and losses on dispositions are reflected in other operating expense and other income. Leases The Company recognizes long-term lease agreements on the Consolidated Statements of Financial Condition as a ROU asset and a corresponding lease liability. The ROU asset and lease liability are calculated as the present value of the minimum lease payments over the lease term, discounted for the rate implicit in the lease, provided the rate is readily determinable; otherwise the Company generally utilizes its incremental borrowing rate, at lease inception, over a similar term. 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 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. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Any interest and penalties on taxes payable are included as part of the provision for income taxes. BOLI Bank owned life insurance is accounted for using the cash surrender value method and is recorded at its realizable value. Part of the Company’s BOLI is invested in a separate account insurance product, which is invested in a fixed income portfolio. The separate account includes stable value protection which maintains realizable value at book value with investment gains and losses amortized over future periods. 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, customer relationship intangible, and core deposit inta ngibles. Customer relationship intangible asset represents the value associated with the business relationships which was acquired through the 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. 85 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. The Company prepares a qualitative assessment, and if necessary, a quantitative assessment, in determining whether goodwill may be impaired. 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 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, 2025. For the annual test, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test based on the stock price of the Company on the measurement date and economic uncertainty. To perform the quantitative assessment, the Company engaged a third-party provider to assist management with the determination of the fair value of the Company. The Company estimated the fair value of equity using the market capitalization method of the market approach, consideration of initiatives unknown by the market and evaluation of any implied control premium. The market capitalization method calculated the aggregate market value of the Company based on the total number of outstanding shares of common 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 DCF analysis was utilized to estimate the present value of future cash flows. A DCF analysis requires significant judgment to model financial forecasts, which included forward interest rates, fee generation and expense occurrence, 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 results of the quantitative assessment indicated that the fair value of the Company’s reporting unit exceeded its carrying amount, which resulted in no impairment loss at August 31, 2025. The Company did not identify any triggering events between the annual assessment date and December 31, 2025. Segment Reporting 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 from Massachusetts through Virginia. Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the 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 Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding and potential common stock utilizing the treasury stock method. All share amounts exclude unallocated shares of stock held by the Company’s ESOP and by incentive plans. 86 Stock-Based Compensation 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. The Company also recognizes compensation expense on phantom stock units, which are liability-classified time-based awards, over the requisite service period based on the Company’s grant date stock price and remeasured monthly. Derivative Instruments The Company accounts for derivative financial instruments under ASC Topic 815, Derivatives and Hedging, which requires the Company to record all derivatives on the balance sheet at fair value. Accounting for changes in the fair value of a derivative depends on whether or not the derivative has been designated and qualifies for hedge accounting. For derivatives not designated as hedging instruments, changes in the fair value are recognized directly in earnings. For derivatives designated as hedging instruments, the accounting treatment is dependent upon the type of hedge. The Company has designated certain interest rate swap contracts as cash flow and fair value hedges. 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. 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. Fair value hedges are used to mitigate the variability in the market value of certain AFS securities caused by interest rate fluctuations. The change in fair value of the derivative instrument is offset by the change in fair value of AFS securities due to changes in interest rates and is recognized in current earnings during the period in which the change in fair values occur, specifically within the same line item as the hedged item. To qualify for hedge accounting, the Company assesses the effectiveness of the derivative in offsetting the risk associated with the exposure being hedged, at inception and on a quarterly basis thereafter. The Company uses quantitative methods, such as regression analyses, and qualitative comparisons of critical terms and the evaluation of any changes in those terms. If it is determined that a derivat ive is not highly effective at hedging the designated exposure, hedge accounting is discontinued prospectively. Impact of New Accounting Pronouncements Accounting Pronouncements Adopted in 2025 In August 2023, the FASB issued ASU 2023-05, “Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement”. The amendments in this ASU require that a joint venture, upon formation, apply a new basis of accounting and initially measure assets and liabilities at fair value, with exceptions to fair value measurement that are consistent with the business combinations guidance. This update will be effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2025, FASB issued ASU 2025-08, “Financial Instruments - Credit Losses (Topic 326)”. The amendments in this ASU expand the population of acquired financial assets subject to the gross-up approach to include loans acquired without credit deterioration. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company early adopted this standard as of December 31, 2025. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. 87 Recent Accounting Pronouncements Not Yet Adopted In November 2024, FASB issued ASU 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)”. The amendments in this ASU require expanded disclosure and disaggregation of certain costs and expenses including, but not limited to, purchases of inventory, employee compensation, depreciation, depletion, and amortization. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company does not expect this standard to have a material impact on the Company’s consolidated financial statements. In November 2024, FASB issued ASU 2024-04, “Debt - Debt with Conversion and Other Options (Subtopic 470-20)”. The amendments in this ASU clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2025, and for interim periods beginning after December 15, 2026. Early adoption is permitted. Currently, this ASU does not have an impact on the Company’s consolidated financial statements. In May 2025, FASB issued ASU 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810)”. The amendments in this ASU require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquired is a variable interest entity, to determine which entity is the accounting acquirer. The amendment requires that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company does not expect this standard to have a material impact on the Company’s consolidated financial statements. In September 2025, FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)”. The amendments in this ASU remove all references to prescriptive and sequential software development stages and provides disclosure requirements for related capitalized costs. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Currently this ASU does not have an impact on the Company’s consolidated financial statements. In September 2025, FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)”. The amendments in this ASU, related to Topic 815, exclude from derivative accounting any non-exchange traded contracts that are based on operations or activities specific to contracted parties, while providing specific exceptions to this exclusion. The amendments in this ASU, related to Topic 606, clarify that an entity should apply Topic 606 guidance to contracts with share-based noncash consideration from a customer in a revenue contract. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. Topic 606 is not applicable to the Company. The Company is currently evaluating the impact of the standard for Topic 815 on the consolidated financial statements. In November 2025, FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements”. The amendments in this ASU include new guidance on assessing similar risks for cash flow hedges, hedging interest payments on "choose-your-rate" debt, accounting for cash flow hedges of nonfinancial forecasted transactions, using net written options as hedging instruments, and the accounting for foreign currency-denominated debt in "dual hedges". This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. Currently this ASU does not have an impact on the consolidated financial statements. Note 2. Regulatory Matters The Company is subject to regulation by the Board of Governors of the FRB and the Bank is primarily subject to regulation and supervision by the OCC and the CFPB, as well as the FDIC as deposit insurer. 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, 2025, 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 %; a minimum ratio of Tier 1 capital to risk-weighted assets of 8.5 %; and a minimum ratio of total (core and supplementary) capital to risk-weighted assets of 10.5 %. These ratios include the impact of the required 2.50 % capital conservation buffer. Under the regulatory framework for prompt corrective action, federal regulators are required to take certain supervisory actions (and may take additional discretionary actions) with respect to an undercapitalized institution. Such actions could have a direct material effect on an institution’s financial statements. The regulations establish a framework for the classification of banking 88 institutions into five categories: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Generally, an institution is considered well-capitalized if it has a Tier 1 capital rati o of 5.0%; a common equity Tier 1 risk-based ratio of at least 6.5%; a Tier 1 risk-based ratio of at least 8.0%; and a total risk-based capital ratio of at least 10.0%. At December 31, 2025 and 2024, the Company and the Bank exceeded all regulatory capital requirements currently applicable. The following is a summary of the Company ’s and Bank’s regulatory capital amounts and ratios as of December 31, 2025 and 2024 compared to the regulatory minimum capital adequacy requirements and the regulatory requirements for classification as a well-capitalized institution then in effect (dollars in thousands): Actual For capital adequacy purposes To be well-capitalized under Prompt Corrective Action As of December 31, 2025 Amount Ratio Amount Ratio Amount Ratio Company: Tier 1 capital (to average assets) $ 1,193,942 8.65 % $ 551,966 4.00 % N/A N/A Common equity Tier 1 (to risk-weighted assets) 1,119,172 10.72 730,982 7.00 (1) N/A N/A Tier 1 capital (to risk-weighted assets) 1,193,942 11.43 887,621 8.50 (1) N/A N/A Total capital (to risk-weighted assets) 1,467,329 14.05 1,096,473 10.50 (1) N/A N/A Bank: Tier 1 capital (to average assets) $ 1,194,054 8.71 % $ 548,260 4.00 % $ 685,326 5.00 % Common equity Tier 1 (to risk-weighted assets) 1,194,054 11.54 724,359 7.00 (1) 672,619 6.50 Tier 1 capital (to risk-weighted assets) 1,194,054 11.54 879,578 8.50 (1) 827,839 8.00 Total capital (to risk-weighted assets) 1,282,441 12.39 1,086,538 10.50 (1) 1,034,798 10.00 As of December 31, 2024 Company: Tier 1 capital (to average assets) $ 1,235,832 9.50 % $ 520,239 4.00 % N/A N/A Common equity Tier 1 (to risk-weighted assets) 1,105,180 11.17 692,897 7.00 (1) N/A N/A Tier 1 capital (to risk-weighted assets) 1,235,832 12.49 841,375 8.50 (1) N/A N/A Total capital (to risk-weighted assets) 1,437,278 14.52 1,039,345 10.50 (1) N/A N/A Bank: Tier 1 capital (to average assets) $ 1,161,564 8.99 % $ 516,798 4.00 % $ 645,998 5.00 % Common equity Tier 1 (to risk-weighted assets) 1,161,564 11.83 687,383 7.00 (1) 638,284 6.50 Tier 1 capital (to risk-weighted assets) 1,161,564 11.83 834,679 8.50 (1) 785,580 8.00 Total capital (to risk-weighted assets) 1,238,011 12.61 1,031,074 10.50 (1) 981,975 10.00 (1) Includes the Capital Conservation Buffer of 2.50 %. The Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action regulations. Capital distributions and certain discretionary bonus payments are limited if the capital conservation buffer of 2.50 % is not maintained. Applicable regulations also impose limitations upon capital distributions by the Company, such as dividends and payments to repurchase or otherwise acquire shares. The Company may not declare or pay cash dividends on or repurchase any of its shares of common stock if the effect thereof would cause stockholders’ equity to be reduced below applicable regulatory capital minimum requirements or if such declaration and payment would otherwise violate regulatory requirements. 89 Note 3. Business Combinations and Dispositions Pending Merger with Flushing On December 29, 2025, the Company, Flushing, and Apollo Merger Sub Corp. entered into the Merger Agreement. On the terms and subject to the conditions set forth in the Merger Agreement, (a) Merger Sub will merge with and into Flushing, with Flushing continuing as the surviving entity, (b) immediately following the First Merger, Flushing will merge with and into the Company, with the Company continuing as the surviving entity, and (c) on the day immediately following the Second Merger, Flushing Bank will merge with and into the Bank, with the Bank continuing as the surviving bank. The Merger Agreement was unanimously approved by the board of directors of the Company and the board of directors of Flushing. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, each share of common stock, par value $ 0.01 per share, of Flushing issued and outstanding immediately prior to the Effective Time, subject to certain exceptions, will be converted into the right to receive 0.85 of a share of common stock, par value $ 0.01 per share, of the Company. Concurrently with its entry into the Merger Agreement, the Company entered into the Investment Agreement with Warburg. On the terms and subject to the conditions set forth in the Investment Agreement, concurrently with the closing of the Mergers, Warburg will invest an aggregate of $ 225 million in exchange for the sale and issuance by the Company of approximately (a) 9.5 million shares of the Company’s common stock at a purchase price of $ 19.76 per share and (b) 1,900 shares of a new class of NVCE Stock at a purchase price of $ 19,760 per share, which represents the economic equivalent of approximately 1.9 million shares of the Company’s common stock. In addition, Warburg will receive a warrant to purchase approximately 11,400 shares of NVCE Stock with an exercise price of $ 19,760 per share of NVCE Stock, which represents the economic equivalent of approximately 11.4 million shares of the Company’s common stock. The Warrant carries a term of seven years and can be exercised voluntarily following the third anniversary of the investment closing. The Warrant can also be voluntarily exercised prior to the third anniversary of the investment closing, (i) in the event the market price of the Company’s common stock reaches or exceeds $ 30 per share at the closing of any trading day or (ii) in transactions involving a change of control. The Warrant is subject to mandatory exercise, at any time, in the event the market price of the Company’s common stock reaches or exceeds $ 30 per share for 20 or more trading days during any 30 consecutive trading day period. Subject to the receipt of requisite regulatory and stockholder approvals and satisfaction or waiver of other customary closing conditions, the parties anticipate that the Mergers, the Bank Merger and the Investment will close in the second quarter of 2026. Merger Related Expenses The Company incurred merger related expenses of $ 4.3 million, $ 1.8 million, and $ 22,000 for the years ended December 31, 2025, 2024, and 2023, respectively. The following table summarizes the merger related expenses for the years ended December 31, 2025, 2024 and 2023: For the Year Ended December 31, 2025 2024 2023 (in thousands) Professional fees $ 4,250 $ 1,506 $ 12 Data processing fees — — 10 Other/miscellaneous fees 3 273 — Merger related expenses $ 4,253 $ 1,779 $ 22 Merger related expenses for 2025 include expenses related to the announced merger with Flushing, which is pending regulatory approvals as of December 31, 2025. Merger related expenses for 2024 primarily include expenses related to the acquisition of Spring Garden, which was completed on October 1, 2024. Disposition of Trident On October 1, 2025, the Company disposed of its 60 % controlling interest in Trident. In accordance with ASC 810, Trident was deconsolidated from the Company’s consolidated financial statements resulting in a loss on deconsolidation of $ 4.3 million for the year ended December 31, 2025, which included the derecognition of $ 5.8 million of goodwill related to Trident. The loss on deconsolidation is included within restructuring charges in the Consolidated Statements of Income. 90 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 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 Fair Value Total consideration paid (1) $ 162,704 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 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. Loans 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. 91 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. Intangibles 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 2026 $ 3,269 2027 2,616 2028 1,600 2029 918 2030 431 Thereafter 212 Total $ 9,046 92 Note 4. Securities The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities available-for-sale and held-to-maturity at December 31, 2025 and 2024 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Allowance for Securities Credit Losses At December 31, 2025 Debt securities available-for-sale: U.S. government and agency obligations $ 54,607 $ — $ ( 2,666 ) $ 51,941 $ — State, municipal and sovereign debt obligations 75,776 7,359 — 83,135 — Corporate debt securities 27,947 575 ( 298 ) 28,224 — Asset-backed securities 114,595 60 ( 161 ) 114,494 — MBS: Agency residential 857,079 1,773 ( 3,830 ) 855,022 — Agency commercial 108,070 2 ( 9,061 ) 99,011 — Total mortgage-backed securities 965,149 1,775 ( 12,891 ) 954,033 — Total excluding fair value hedge basis adjustment 1,238,074 9,769 ( 16,016 ) 1,231,827 — Fair value hedge basis adjustment (1) ( 4,038 ) — 4,038 — — Total debt securities available-for-sale $ 1,234,036 $ 9,769 $ ( 11,978 ) $ 1,231,827 $ — Debt securities held-to-maturity: State and municipal debt obligations $ 165,267 $ 434 $ ( 8,518 ) $ 157,183 $ ( 22 ) Corporate debt securities 48,986 251 ( 692 ) 48,545 ( 772 ) Mortgage-backed securities: Agency residential 589,078 1,788 ( 44,521 ) 546,345 — Agency commercial 77,517 8 ( 5,256 ) 72,269 — Non-agency commercial 1,531 — ( 83 ) 1,448 ( 17 ) Total mortgage-backed securities 668,126 1,796 ( 49,860 ) 620,062 ( 17 ) Total debt securities held-to-maturity $ 882,379 $ 2,481 $ ( 59,070 ) $ 825,790 $ ( 811 ) Total debt securities $ 2,116,415 $ 12,250 $ ( 71,048 ) $ 2,057,617 $ ( 811 ) 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 ) (1) Refer to Note 16, Derivatives and Hedging Activities for additional information. 93 The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the years ended December 31, 2025 and 2024 (in thousands): For the Years Ended December 31, 2025 2024 Allowance for securities credit losses Beginning balance $ ( 967 ) $ ( 1,133 ) Benefit for credit losses 156 166 Total ending allowance balance $ ( 811 ) $ ( 967 ) 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 December 31, 2025, aggregated by credit quality indicator, are as follows (in thousands): Investment Grade Non-Investment Grade/Non-rated Total At December 31, 2025 State and municipal debt obligations $ 165,267 $ — $ 165,267 Corporate debt securities 34,811 14,175 48,986 Non-agency commercial MBS 1,531 — 1,531 Total debt securities held-to-maturity $ 201,609 $ 14,175 $ 215,784 There were $ 34,000 , $ 156,000 and $ 697,000 of realized losses on sale of debt securities available-for-sale for the years ended December 31, 2025, 2024 and 2023 respectively. These realized losses on debt securities are presented within Other, which is included within Total other income on the Consolidated Statements of Income. The amortized cost and estimated fair value of debt securities at December 31, 2025 by contractual maturity are shown below (in thousands): At December 31, 2025 Amortized Cost (1) Estimated Fair Value Less than one year $ 35,121 $ 34,525 Due after one year through five years 154,779 150,459 Due after five years through ten years 98,248 97,036 Due after ten years 199,030 201,502 $ 487,178 $ 483,522 (1) The amortized cost of available-for-sale securities excludes the portfolio layer fair value hedge basis adjustments of $ 4.0 million at December 31, 2025. 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 December 31, 2025, corporate debt securities, state and municipal obligations, and asset-backed securities with an amortized cost, excluding the fair value hedge basis adjustments, of $ 72.8 million, $ 116.4 million, and $ 114.6 million, respectively, and an estimated fair value of $ 72.8 million, $ 123.6 million, and $ 114.5 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. 94 The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at December 31, 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 (1) Estimated Fair Value Unrealized Losses (1) Estimated Fair Value Unrealized Losses At December 31, 2025 Debt securities AFS: U.S. government and agency obligations $ — $ — $ 51,941 $ ( 2,666 ) $ 51,941 $ ( 2,666 ) Corporate debt securities 4,712 ( 97 ) 3,798 ( 201 ) 8,510 ( 298 ) Asset-backed securities 68,805 ( 161 ) — — 68,805 ( 161 ) MBS: Agency residential 498,047 ( 3,771 ) 21,547 ( 59 ) 519,594 ( 3,830 ) Agency commercial — — 98,518 ( 9,061 ) 98,518 ( 9,061 ) Total MBS 498,047 ( 3,771 ) 120,065 ( 9,120 ) 618,112 ( 12,891 ) Total debt securities AFS 571,564 ( 4,029 ) 175,804 ( 11,987 ) 747,368 ( 16,016 ) Debt securities HTM: State and municipal debt obligations 245 — 138,624 ( 8,518 ) 138,869 ( 8,518 ) Corporate debt securities 4,458 ( 241 ) 14,295 ( 451 ) 18,753 ( 692 ) MBS: Agency residential 23,548 ( 72 ) 425,748 ( 44,449 ) 449,296 ( 44,521 ) Agency commercial — — 71,509 ( 5,256 ) 71,509 ( 5,256 ) Non-agency commercial 459 ( 1 ) 989 ( 82 ) 1,448 ( 83 ) Total MBS 24,007 ( 73 ) 498,246 ( 49,787 ) 522,253 ( 49,860 ) Total debt securities HTM 28,710 ( 314 ) 651,165 ( 58,756 ) 679,875 ( 59,070 ) Total debt securities $ 600,274 $ ( 4,343 ) $ 826,969 $ ( 70,743 ) $ 1,427,243 $ ( 75,086 ) At December 31, 2024 Debt securities AFS: 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 AFS 242,563 ( 877 ) 208,677 ( 20,440 ) 451,240 ( 21,317 ) Debt securities HTM: 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 HTM 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 ) (1) The unrealized losses of available-for-sale securities excludes the portfolio layer fair value hedge basis adjustments of $ 4.0 million at December 31, 2025. The Company concluded that no debt securities were impaired at December 31, 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 95 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. Equity Investments At December 31, 2025 and 2024, the Company held equity investments of $ 91.9 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 year ended December 31, 2025, 2024 and 2023 are shown in the table below (in thousands): For the Year Ended December 31, 2025 2024 2023 Net gain (loss) on equity investments $ 916 $ 4,225 $ ( 3,732 ) Less: Net gain (loss) recognized on equity investments sold 352 ( 49 ) ( 5,462 ) Unrealized gains recognized on equity investments still held $ 564 $ 4,274 $ 1,730 96 Note 5. Loans Receivable, Net Loans receivable, net at December 31, 2025 and 2024 consisted of the following (in thousands): December 31, 2025 2024 Commercial: Commercial real estate – investor $ 5,420,989 $ 5,287,683 Commercial and industrial: Commercial and industrial – real estate 986,431 902,219 Commercial and industrial – non-real estate 1,227,556 647,945 Total commercial and industrial 2,213,987 1,550,164 Total commercial 7,634,976 6,837,847 Consumer: Residential real estate 3,194,264 3,049,763 Other consumer 202,763 230,462 Total consumer 3,397,027 3,280,225 Total loans receivable 11,032,003 10,118,072 Deferred origination costs, net of fees 22,389 10,964 Allowance for loan credit losses ( 83,726 ) ( 73,607 ) Total loans receivable, net $ 10,970,666 $ 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. 97 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 December 31, 2025 Commercial real estate - investor Pass $ 647,529 $ 65,950 $ 166,397 $ 1,161,291 $ 1,299,618 $ 1,427,844 $ 579,022 $ 5,347,651 Special Mention 66 — — 2,932 — 8,735 725 12,458 Substandard — 85 — 20,788 298 33,969 5,740 60,880 Total commercial real estate - investor 647,595 66,035 166,397 1,185,011 1,299,916 1,470,548 585,487 5,420,989 Commercial and industrial: Commercial and industrial - real estate Pass 255,690 74,284 58,970 90,142 59,476 403,738 31,844 974,144 Special Mention — 250 — — — 731 — 981 Substandard — — — — — 11,306 — 11,306 Total commercial and industrial - real estate 255,690 74,534 58,970 90,142 59,476 415,775 31,844 986,431 Commercial and industrial - non-real estate Pass 325,180 181,538 40,761 30,417 8,314 35,057 589,300 1,210,567 Special Mention 39 224 — — — — 690 953 Substandard — 528 553 776 649 1,774 11,756 16,036 Total commercial and industrial - non-real estate 325,219 182,290 41,314 31,193 8,963 36,831 601,746 1,227,556 Total commercial and industrial 580,909 256,824 100,284 121,335 68,439 452,606 633,590 2,213,987 Residential real estate (1) Pass 471,828 225,885 209,979 501,308 743,610 1,034,301 — 3,186,911 Special Mention 218 121 345 265 1,432 1,298 — 3,679 Substandard 207 1,590 396 93 445 943 — 3,674 Total residential real estate 472,253 227,596 210,720 501,666 745,487 1,036,542 — 3,194,264 Other consumer (1) Pass 27,971 24,292 23,141 13,697 15,086 93,425 3,242 200,854 Special Mention — — — — 8 82 — 90 Substandard — 190 181 67 — 1,381 — 1,819 Total other consumer 27,971 24,482 23,322 13,764 15,094 94,888 3,242 202,763 Total loans $ 1,728,728 $ 574,937 $ 500,723 $ 1,821,776 $ 2,128,936 $ 3,054,584 $ 1,222,319 $ 11,032,003 (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. 98 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. 99 An analysis of the allowance for credit losses on loans for the years ended December 31, 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 Year Ended December 31, 2025 Allowance for credit losses on loans Balance at beginning of year $ 30,780 $ 3,817 $ 10,471 $ 27,587 $ 952 $ 73,607 Provision (benefit) for credit losses 2,517 917 13,410 ( 1,547 ) 267 15,564 Charge-offs ( 3,534 ) — ( 835 ) ( 1,451 ) ( 433 ) ( 6,253 ) Recoveries 181 19 330 91 187 808 Balance at end of year $ 29,944 $ 4,753 $ 23,376 $ 24,680 $ 973 $ 83,726 For the Year Ended December 31, 2024 Allowance for credit losses on loans 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 ) Recoveries 219 32 18 206 190 665 Balance at end of year $ 30,780 $ 3,817 $ 10,471 $ 27,587 $ 952 $ 73,607 The following tables summarize gross charge-offs by vintage (in thousands): 2025 2024 2023 2022 2021 2020 and prior Total For the Year Ended December 31, 2025 Commercial real estate – investor $ ( 102 ) $ ( 310 ) $ ( 1,938 ) $ ( 649 ) $ ( 24 ) $ ( 511 ) $ ( 3,534 ) Commercial and industrial - non-real estate — ( 815 ) — ( 20 ) — — ( 835 ) Residential real estate ( 37 ) ( 218 ) ( 106 ) ( 319 ) ( 345 ) ( 426 ) ( 1,451 ) Consumer — — — ( 48 ) — ( 385 ) ( 433 ) Total charge-offs $ ( 139 ) $ ( 1,343 ) $ ( 2,044 ) $ ( 1,036 ) $ ( 369 ) $ ( 1,322 ) $ ( 6,253 ) 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 ) Consumer — — — ( 485 ) ( 485 ) Total charge-offs $ ( 33 ) $ ( 54 ) $ ( 46 ) $ ( 2,087 ) $ ( 2,220 ) (1) Gross charge-offs of $ 1.7 million primarily related to a single commercial relationship which had partial charge-offs during the year ended December 31, 2024. 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, 2025 and 2024, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $ 13.6 million and $ 11.8 million, respectively, commercial and industrial - real estate of $ 4.8 million and $ 4.8 million, respectively, and commercial and industrial - non-real estate of $ 603,000 and $ 32,000 , respectively. In addition, the Company had collateral dependent residential and consumer loans with an amortized cost balance of $ 5.5 million and $ 8.6 million at December 31, 2025 and 2024, respectively. 100 The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of December 31, 2025 and 2024 (in thousands): December 31, 2025 2024 Commercial real estate – investor $ 13,636 $ 17,000 Commercial and industrial: Commercial and industrial – real estate 4,813 4,787 Commercial and industrial – non-real estate 640 32 Total commercial and industrial 5,453 4,819 Residential real estate (1) 6,200 10,644 Other consumer (1) 2,502 3,064 Total non-performing loans $ 27,791 $ 35,527 (1) The year ended December 31, 2025 included the sale of non-performing residential and consumer loans of $ 9.8 million. At December 31, 2025 and 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 December 31, 2025 and 2024, there were no loans greater than 90 days past due that were accruing interest. The following table presents the aging of the recorded investment in past due loans as of December 31, 2025 and 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 December 31, 2025 Commercial real estate – investor $ 25,516 $ 974 $ 12,333 $ 38,823 $ 5,382,166 $ 5,420,989 Commercial and industrial: Commercial and industrial - real estate 587 — 4,281 4,868 981,563 986,431 Commercial and industrial - non-real estate 1,220 235 578 2,033 1,225,523 1,227,556 Total commercial and industrial 1,807 235 4,859 6,901 2,207,086 2,213,987 Residential real estate 14,517 3,672 3,673 21,862 3,172,402 3,194,264 Other consumer 1,027 60 1,819 2,906 199,857 202,763 Total loans $ 42,867 $ 4,941 $ 22,684 $ 70,492 $ 10,961,511 $ 11,032,003 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 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 December 31, 2025 and 2024, loans with modifications to borrowers experiencing financial difficulty totaled $ 24.9 million and $ 30.9 million, respectively. There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of December 31, 2025 or December 31, 2024. 101 The following table presents loan modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2025 and 2024 (in thousands): Term Extension Combination of Term Extension and Other than Insignificant Payment Delay Combination of Term Extension and Interest Rate Reduction Total % of Total by Loan Portfolio Segment For the Year Ended December 31, 2025 Commercial real estate – investor $ — $ 4,423 $ 956 $ 5,379 0.10 % Residential real estate 246 — — 246 0.01 $ 246 $ 4,423 $ 956 $ 5,625 0.05 % 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 and industrial – real estate — — — 2,822 — 2,822 0.31 Residential real estate 128 — — — — 128 — Other consumer — — 146 — — 146 0.06 $ 128 $ 4,858 $ 7,146 $ 8,507 $ 1,604 $ 22,243 0.22 % 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, 2025 and 2024 (in thousands): Current 30 - 59 Days Past Due 90 Days or Greater Past Due Total December 31, 2025 Commercial real estate – investor $ 4,423 $ 956 $ — $ 5,379 Residential real estate 246 — — 246 $ 4,669 $ 956 $ — $ 5,625 December 31, 2024 Commercial real estate – investor $ 19,147 $ — $ — $ 19,147 Commercial and industrial – real estate 2,822 — — 2,822 Residential real estate — — 128 (1) 128 Other consumer — — 146 (1) 146 $ 21,969 $ — $ 274 $ 22,243 (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. 102 Note 6. Interest and Dividends Receivable Interest and dividends receivable at December 31, 2025 and 2024 are summarized as follows (in thousands): December 31, 2025 2024 Loans receivable $ 40,938 $ 37,836 Debt securities 7,254 7,349 Equity investments and other (1) 818 729 Total interest and dividends receivable $ 49,010 $ 45,914 (1) Dividend income is included within equity investments and other on the Consolidated Statements of Income. Note 7. Premises and Equipment, Net Premises and equipment, net of accumulated depreciation and amortization expense at December 31, 2025 and 2024 are summarized as follows (in thousands): December 31, 2025 2024 Land $ 16,875 $ 16,605 Buildings and improvements 136,305 133,312 Leasehold improvements 7,105 7,074 Furniture and equipment 38,413 37,079 Capitalized software 9,753 8,722 Finance lease 1,392 1,272 Other 4,131 3,376 Total 213,974 207,440 Accumulated depreciation and amortization ( 101,231 ) ( 92,184 ) Total premises and equipment, net $ 112,743 $ 115,256 Depreciation and amortization expense amounted to $ 10.3 million, $ 10.9 million and $ 11.5 million for the year ended December 31, 2025, 2024 and 2023, respectively. Depreciation and amortization expense is presented within occupancy, equipment, and data processing expenses on the Consolidated Statements of Income. Note 8. Deposits The major types of deposits at December 31, 2025 and 2024 were as follows (dollars in thousands): December 31, 2025 2024 Amount Weighted Average Cost Amount Weighted Average Cost Non-interest-bearing $ 1,741,958 — % $ 1,617,182 — % Interest-bearing checking 4,354,485 2.05 4,000,553 2.11 Money market deposit 1,412,917 2.43 1,301,197 3.00 Savings 986,195 0.55 1,066,438 0.72 Time deposits 2,468,850 3.64 2,080,972 4.18 Total deposits $ 10,964,405 2.00 % $ 10,066,342 2.17 % Accrued interest payable related to deposits was $ 3.5 million and $ 1.2 million at December 31, 2025 and 2024, respectively. Time deposits included $ 474.6 million and $ 457.2 million in deposits of $250,000 or more at December 31, 2025 and 2024, respectively. Time deposits also include brokered deposits of $ 609.8 million and $ 74.7 million at December 31, 2025 and 2024, respectively. 103 Time deposits at December 31, 2025 mature as follows (in thousands): For the Year Ending December 31, Time Deposit Maturities 2026 $ 2,430,525 2027 22,320 2028 7,705 2029 4,947 2030 3,042 Thereafter 311 Total $ 2,468,850 Interest expense on deposits for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): For the Year Ended December 31, 2025 2024 2023 Interest-bearing checking $ 88,866 $ 86,320 $ 52,898 Money market deposit 41,077 41,948 18,656 Savings 6,631 11,422 9,227 Time deposits 79,606 102,443 91,237 Total interest expense on deposits $ 216,180 $ 242,133 $ 172,018 Note 9. Borrowed Funds Borrowed funds are summarized as follows (dollars in thousands): December 31, 2025 2024 Amount Weighted Average Rate Amount Weighted Average Rate FHLB advances $ 1,397,179 4.19 % $ 1,072,611 4.62 % Securities sold under agreements to repurchase with customers 54,434 2.62 60,567 2.29 Other borrowings 255,233 6.45 197,546 5.96 Total borrowed funds $ 1,706,846 4.48 % $ 1,330,724 4.71 % At December 31, 2025, there were $ 929.2 million of FHLB term advances as compared to $ 1.07 billion at December 31, 2024. There were $ 468.0 million and no overnight borrowings from the FHLB at December 31, 2025 and 2024, respectively. FHLB advances and repurchase agreements had contractual maturities at December 31, 2025 as follows (in thousands): FHLB Advances Repurchase Agreements For the Year Ended December 31, 2026 $ 1,195,311 $ 54,434 2027 200,501 — 2028 1,367 — Total $ 1,397,179 $ 54,434 104 The other borrowings at December 31, 2025 included the following (in thousands): Type of Debt Stated Value Carrying Value Contractual Interest Rate Maturity Subordinated debt $ 185,000 $ 181,979 6.375 % (1) November 15, 2035 Trust preferred 10,000 8,557 3 month SOFR plus 2.51 % December 15, 2034 Trust preferred 30,000 24,684 3 month SOFR plus 1.61 % March 15, 2036 Trust preferred 5,000 5,000 3 month SOFR plus 1.91 % August 1, 2036 Trust preferred 7,500 7,500 3 month SOFR plus 1.92 % November 1, 2036 Trust preferred 10,000 8,239 3 month SOFR plus 1.79 % June 30, 2037 Trust preferred 10,000 10,000 3 month SOFR plus 2.01 % September 1, 2037 Trust preferred 10,000 8,131 3 month SOFR plus 1.65 % October 1, 2037 Finance lease 1,143 1,143 5.625 % July 31, 2029 Total $ 268,643 $ 255,233 (1) Adjusts to a floating rate of 3.075 % over 3 month SOFR on November 15, 2030. During the year ended December 31, 2025, the Company redeemed in full $ 125.0 million of its subordinated notes due May 15, 2030, and issued $ 185.0 million of subordinated notes at 6.375 % fixed-to-floating rate due November 15, 2035. All of the trust preferred debt is currently callable. Interest expense on borrowings for the years ended December 31, 2025, 2024, and 2023 was as follows (in thousands): For the Year Ended December 31, 2025 2024 2023 FHLB advances $ 44,997 $ 35,686 $ 46,000 Securities sold under agreements to repurchase with customers 1,711 1,893 931 Other borrowings 19,343 28,426 19,294 Total interest expense on borrowings $ 66,051 $ 66,005 $ 66,225 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 and Equity Securities Total December 31, 2025 FHLB and FRB $ 7,923,979 $ 1,367,469 $ 9,291,448 Repurchase agreements — 78,422 78,422 Total pledged assets $ 7,923,979 $ 1,445,891 $ 9,369,870 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. 105 Note 10. Income Taxes The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands): For the Year Ended December 31, 2025 2024 2023 Current Federal $ 13,599 $ 23,315 $ 20,894 State 4,881 7,288 8,655 Total current 18,480 30,603 29,549 Deferred Federal 2,748 214 4,250 State 261 ( 551 ) ( 1,099 ) Total deferred 3,009 ( 337 ) 3,151 Total provision for income taxes $ 21,489 $ 30,266 $ 32,700 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 r esulted in a tax expense of $ 4.5 million, $ 1.8 million and $ 4.9 million for the years ended December 31, 2025, 2024 and 2023, respectively . Income taxes that would have been computed at the statutory federal rate are reconciled to the total provision for income taxes and effective tax rate for the years ended December 31, 2025, 2024 and 2023 is as follows (dollars in thousands): For the Year Ended December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent Income before provision for income taxes $ 92,516 $ 130,656 $ 136,765 Federal income tax expense, at statutory rate 19,428 21.0 % 27,438 21.0 % 28,721 21.0 % Increase (decrease) in federal income tax expense resulting from: State income taxes, net of federal benefit (1) 3,941 4.3 5,518 4.2 5,979 4.3 Nontaxable or nondeductible items: Earnings on BOLI ( 1,628 ) ( 1.8 ) ( 1,660 ) ( 1.3 ) ( 1,109 ) ( 0.8 ) Tax exempt interest ( 761 ) ( 0.8 ) ( 547 ) ( 0.4 ) ( 606 ) ( 0.4 ) Merger related expenses 620 0.7 — — — — Stock compensation 68 0.1 391 0.3 ( 298 ) ( 0.2 ) Dividends received deduction ( 241 ) ( 0.3 ) ( 322 ) ( 0.2 ) ( 368 ) ( 0.3 ) Tax credits Alternative minimum tax write-off — — 1,196 0.9 — — Research and development and other credits ( 610 ) ( 0.7 ) ( 735 ) ( 0.5 ) ( 557 ) ( 0.4 ) Other items, net 672 0.7 ( 1,013 ) ( 0.8 ) 938 0.7 Total provision for income taxes, at effective tax rate $ 21,489 23.2 % $ 30,266 23.2 % $ 32,700 23.9 % (1) State taxes in New Jersey made up the majority (greater than 50%) of the tax effect in this category. 106 The difference between income taxes that would have been computed at the statutory federal rate and the total provision for income taxes at the Company's effective tax rate is primarily due to adjustments related to state income taxes, net of federal benefit, and earnings on BOLI during the years ended December 31, 2025 and 2024 . In addition, the Company recorded an alternative minimum tax credit write-off during the year ended December 31, 2024. The Company's state income tax provision, net of federal benefit, increases the total tax provision as it is computed separately from the federal tax provision. Earnings on BOLI are tax exempt for federal income tax purposes and reduce the total tax provision. At December 31, 2023 , the Company had $ 1.2 million of Alternative Minimum Tax credits that were part of the Sun acquisition, which were fully written off during 2024 . Income taxes paid for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands): For the Year Ended December 31, 2025 2024 2023 Federal $ 16,149 $ 27,069 $ 22,200 State and local New Jersey 2,614 3,242 2,658 New York 1,020 2,499 1,995 New York City 400 576 1,773 Other 506 400 705 Total $ 20,689 $ 33,786 $ 29,331 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented in the following table (in thousands): December 31, 2025 2024 Deferred tax assets: Allowance for credit losses on loans and debt securities HTM $ 21,529 $ 18,981 Other reserves 1,787 2,790 Incentive compensation 5,620 4,345 Deferred compensation 326 338 Stock plans 1,998 2,239 Unrealized losses on assets held-for-sale 225 347 Unrealized losses on AFS securities 897 5,346 Net operating loss carryforwards related to acquisition 17,030 19,053 Section 174 capitalized costs 4,967 5,457 Other, net 729 866 Total gross deferred tax assets 55,108 59,762 Deferred tax liabilities: Unrealized gain on equity securities ( 4,729 ) ( 4,568 ) Premises and equipment ( 2,328 ) ( 3,104 ) Deferred loan and commitment costs, net ( 5,740 ) ( 2,814 ) Purchase accounting related adjustments ( 1,553 ) ( 1,698 ) Investments, discount accretion ( 126 ) ( 185 ) Other, net ( 1,058 ) ( 402 ) Total gross deferred tax liabilities ( 15,534 ) ( 12,771 ) Net deferred tax assets $ 39,574 $ 46,991 The Company has federal net operating losses from the acquisitions of Colonial American and Sun . At December 31, 2025 and 2024, the net operating losses from Colonial American were $ 2.9 million and $ 3.3 million, respe ctively. Th ese net operating losses are subject to annual limitation under Code Section 382 of approximately $ 22,000 , and will expire between 2029 and 2034. At December 31, 2025 and 2024, the net operating losses from Sun were $ 78.1 million and $ 87.5 million, respectively. 107 These net operating losses are subject to annual limitation under Code Section 382 of approximately $ 9.3 million. These net operating losses will expire between 2029 and 2036. At December 31, 2025, 2024 and 2023 , 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. The conclusion that it is “more likely than not” that the remaining net deferred tax assets will be realized is based on the history of earnings and the prospects for continued growth. Management will continue to review the tax criteria related to the recognition of deferred tax assets. Retained earnings at December 31, 2025 included approximately $ 10.8 million for which no deferred income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only for tax years prior to 1988. If the Bank were to liquidate, the entire amount would have to be recaptured and would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The Company’s federal and state income tax returns are routinely subject to examination by the Internal Revenue Service and New Jersey, New York, Pennsylvania, and several other state and city tax authorities the Company operates in. The Company believes the assumptions used to record tax-related assets or liabilities have been appropriate. 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 Jersey Division of Taxation in connection with the 2020 to 2023 tax years. As of December 31, 2025, the Company has not received any notices of proposed adjustments from this audit. 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. 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, 2025, subject to reclassification, was $ 265,000 . There were no unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023. Note 11. Employee Stock Ownership Plan The Bank maintains an ESOP which all full-time employees are eligible to participate in after they attain age 21 and complete one year of service during which they work at least 1000 hours. ESOP shares are allocated among participants on the basis of compensation earned during the year. Employees are fully vested in their ESOP account after the completion of five years of credited service or completely, if service was terminated due to death, retirement, disability or change in control of the Company. ESOP participants are entitled to receive distributions from the ESOP account only upon termination of service, which includes retirement and death, except that a participant may elect to have dividends distributed as a cash payment on a quarterly basis. Over the years, the ESOP has borrowed from the Company to purchase shares of common stock. During 2025 and 2024, the ESOP had one outstanding loan agreement with the Bank (“the 2018 loan”). The 2018 loan 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. The loan is 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 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, 2025 and 2024, contributions to the ESOP , which were used to fund principal and interest payments on the ESOP loan, totaled $ 1.5 million for each year . During 2025 and 2024, $ 105,000 and $ 158,000 , respectively, of dividends paid on unallocated ESOP shares were used for debt service. At December 31, 2025 and 2024, the loan had an outstanding balance of $ 1.5 million and $ 2.9 million , respectively, and the ESOP had unallocated shares of 65,953 and 131,672 , respectively. At December 31, 2025, the unallocated shares had a fair value of $ 1.2 million . 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. 108 For the years ended December 31, 2025, 2024 and 2023, the Bank recorded compensation expense related to the ESOP of $ 1.2 million, $ 1.1 million and $ 2.1 million, respectively, which included $ 74,000 , $ 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. As of December 31, 2025, 2,951,395 shares had been allocated to participants and 65,719 shares were committed to be released for services rendered in 2025. Note 12. Long-Term Incentive Plans The Company offers long-term incentive plans that provide for the granting of stock awards (both time-vested and performance-based) and stock options, as well as phantom stock units. 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. 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. 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 plan’s authorized shares and those that remain available for issuance as of December 31, 2025. 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 Stock Options or Stock Awards Stock Options or Stock Awards 2020 Plan 6,950,000 2,780,000 2,165,868 866,347 Stock Awards 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 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 2025, 2024 and 2023. The 2025 and 2024 performance-based stock awards were generally issued with a three or four year cliff vesting schedule, while some awards vest ratably over a four year period. The 2023 performance-based stock awards were issued with a three year cliff vesting schedule. Certain 2025, 2024 and 2023 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: 2025 2024 2023 Risk-free interest rate 3.99 % 4.47 % 4.56 % Expected performance period 2.8 years 2.8 years 2.8 years Expected volatility 37.12 % 34.00 % 35.80 % 109 The risk-free interest rate is based on the U.S Treasury rate, with a term equal to the expected performance period. The expected performance period reflects the remaining term of the awards’ performance period. Expected volatility is based on actual historical results. A summary of the granted but unvested stock award activity, which included both time- and performance-based stock awards, for the years ended December 31, 2025, 2024 and 2023 is as follows: 2025 2024 2023 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Outstanding at beginning of year: 1,071,535 $ 18.29 814,489 $ 21.73 835,340 $ 21.84 Granted 345,644 17.32 554,081 15.35 322,425 22.14 Vested ( 240,457 ) 20.11 ( 200,254 ) 22.41 ( 228,370 ) 22.55 Forfeited ( 118,159 ) 20.37 ( 96,781 ) 21.93 ( 114,906 ) 22.07 Outstanding at end of year 1,058,563 $ 17.32 1,071,535 $ 18.29 814,489 $ 21.73 Stock Options The Company ’s stock options expire 10 years from the date of grant and generally vest at a rate of 20 % per year. The exercise price of each option equals the closing market price of the Company ’s stock on the grant date. The Company typically issues treasury shares or authorized but unissued shares to satisfy stock option exercises. The Company has not granted stock options since 2020. A summary of option activity for the years ended December 31, 2025, 2024 and 2023 is as follows: 2025 2024 2023 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Outstanding at beginning of year 1,629,602 $ 22.85 1,969,439 $ 22.42 2,210,684 $ 21.66 Exercised ( 41,750 ) 17.19 ( 33,125 ) 17.24 ( 195,684 ) 14.59 Forfeited — — ( 15,358 ) 20.44 ( 15,358 ) 20.44 Expired ( 101,682 ) 17.38 ( 291,354 ) 20.74 ( 30,203 ) 18.32 Outstanding at end of year 1,486,170 $ 23.38 1,629,602 $ 22.85 1,969,439 $ 22.42 Options exercisable 1,486,170 $ 23.38 1,528,067 $ 23.01 1,663,506 $ 22.58 The aggregate intrinsic value for both stock options outstanding and stock options exercisable at December 31, 2025 was $ 93,000 . The weighted average remaining contractual life of stock options outstanding and stock options exercisable at December 31, 2025 was 2.47 years . Phantom Stock Units In 2022, the Company established the OceanFirst Bank Phantom Equity Plan to issue phantom stock units to select senior management employees. The phantom stock units are liability-classified time-based awards, which generally vest ratably over a three - to five-year period, and are settled in cash when they vest. The fair value is determined based on the Company’s stock price at the grant date and remeasured monthly. 110 Compensation Expense The compensation expense for stock awards, stock options and phantom stock units were as follows (in thousands): For the Year Ended December 31, 2025 2024 2023 Stock awards $ 4,818 $ 5,724 $ 5,154 Stock options 49 360 700 Phantom stock units 2,518 1,707 1,092 Total $ 7,385 $ 7,791 $ 6,946 At December 31, 2025, the Company had an estimated $ 14.4 million of unrecognized compensation costs related to non-vested stock awards, stock options, and phantom stock units. This cost will be recognized over the remaining vesting period of 1.7 years. Note 13. Commitments, Contingencies, and Concentrations of Credit Risk The Company, in the normal course of business, is party to financial instruments and commitments which involve, to varying degrees, elements of risk in excess of the amounts recognized in the consolidated financial statements. These financial instruments and commitments include unused consumer lines of credit, construction loan lines of credit, commercial lines of credit, and commitments to extend credit. At December 31, 2025, the following commitments and contingent liabilities existed which are not reflected in the accompanying consolidated financial statements (in thousands): December 31, 2025 Unused consumer and residential construction loan lines of credit (primarily floating-rate) $ 278,830 Unused commercial and commercial construction loan lines of credit (primarily floating-rate) 1,602,901 Other commitments to extend credit (1) : Fixed-rate 133,617 Adjustable-rate 1,100 Floating-rate 339,342 (1) As of December 31, 2025, the Company has outsourced its residential and consumer originations, and the pipeline for residential loans represents the remaining commitments expected to close in 2026. The Company’s fixed-rate loan commitments generally expire within 90 days of issuance and carried interest rates ranging from 5.56 % to 8.00 % at December 31, 2025. At December 31, 2025, the Company had $ 6.4 million of unfunded capital commitments related to investment funds. The Company’s maximum exposure to credit losses in the event of nonperformance by the other party to these financial instruments and commitments is represented by the contractual amounts. The Company uses the same credit policies in granting commitments and conditional obligations as it does for financial instruments recorded in the Consolidated Statements of Financial Condition. These commitments and obligations do not necessarily represent future cash flow requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s assessment of risk. Substantially all of the unused consumer and construction loan lines of credit are collateralized by mortgages on real estate. At December 31, 2025, the Company is obligated under noncancelable operating leases and rental agreements for premises and equipment. Rental and lease expense under these leases were $ 6.8 million, $ 5.8 million , and $ 5.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Refer to Note 17. Leases for the projected minimum lease commitments as of December 31, 2025. The Company granted residential real estate and first mortgage commercial real estate loans to borrowers primarily located throughout New Jersey and in the major metropolitan areas from Massachusetts through Virginia. The ability of borrowers to 111 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. Such factors are dependent upon various economic conditions and individual circumstances beyond the Company’s control. The Company is, therefore, subject to risk of loss. A decline in real estate values could cause some residential and commercial real estate loans to become inadequately collateralized, which would expose the Company to a greater risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and collateral and/or guarantees are required for most loans. The Company is a defendant in certain claims and legal actions arising in the ordinary course of business. Management and its legal counsel are of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial condition, results of operations, or liquidity. Note 14. Earnings Per Share The following reconciles shares outstanding for basic and diluted earnings per share for the years ended December 31, 2025, 2024 and 2023 (in thousands): December 31, 2025 2024 2023 Weighted average shares outstanding 57,833 58,704 59,399 Less: Unallocated ESOP shares ( 99 ) ( 164 ) ( 257 ) Unallocated incentive award shares ( 315 ) ( 244 ) ( 194 ) Average basic shares outstanding 57,419 58,296 58,948 Add: Effect of dilutive securities: Incentive awards 6 1 9 Average diluted shares outstanding 57,425 58,297 58,957 For the years ended December 31, 2025, 2024 and 2023, antidilutive stock options of 1,350,000 , 1,755,000 , and 1,775,000 , respectively, were excluded from the earnings per share calculation. Note 15. 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: 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. 112 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 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. Credit Default Swap The credit default swap is reported at fair value. The fair value of the credit default swap is estimated utilizing discounted cash flows and is derived from various inputs. The inputs include unobservable inputs to measure the probability of future credit events for a portion of the Company’s underlying residential loan portfolio in which no active market exists. The credit default swap is therefore classified within Level 3 on the hierarchy. 113 The following table summarizes financial assets and financial liabilities measured at fair value as of December 31, 2025 and 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 December 31, 2025 Items measured on a recurring basis: Debt securities available-for-sale $ 1,231,827 $ 43,385 $ 1,188,442 $ — Equity investments 45,207 — 45,207 — Interest rate derivative asset 57,823 — 57,823 — Interest rate derivative liability ( 53,835 ) — ( 53,835 ) — Credit default swap ( 234 ) — — ( 234 ) Items measured on a non-recurring basis: Equity investments (1) (2) 46,675 — — 40,163 Other real estate owned 10,266 — — 10,266 Loans measured for impairment based on the fair value of the underlying collateral (3) 24,470 — — 24,470 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 December 31, 2025 and 2024, equity investments included $ 40.2 million and $ 39.7 million, respectively, of equity investments measured under the measurement alternative. There were no realized gains or losses for the years ended December 31, 2025 and 2024. (2) As of December 31, 2025 and 2024, equity investments included $ 6.5 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 may vary but is generally 0 % to 8 % on the discount for costs to sell and 0 % to 10 % on appraisal adjustments. The credit default swap is recognized at fair value on a recurring basis using unobservable inputs, and the Company recognized $ 234,000 of losses in earnings for the year ended December 31, 2025. The Company recognizes transfers between levels of the valuation hierarchy at the end of the applicable reporting periods. There were no transfers into or out of Level 3 for the year ended December 31, 2025 or 2024. 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. 114 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. 115 The book value and estimated fair value of the Company’s significant financial instruments not recorded at fair value as of December 31, 2025 and 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 December 31, 2025 Financial Assets: Cash and due from banks $ 135,130 $ 135,130 $ — $ — Debt securities held-to-maturity 881,568 — 825,790 — Restricted equity investments 129,329 — — 129,329 Loans receivable, net and loans held-for-sale 10,976,434 — — 10,665,389 Financial Liabilities: Deposits other than time deposits (1) 8,495,555 — 8,495,555 — Time deposits 2,468,850 — 2,455,199 — FHLB advances and other borrowings 1,652,412 — 1,662,638 — Securities sold under agreements to repurchase with customers 54,434 54,434 — — 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. 116 Note 16. 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 may also enter into derivative financial instruments to reduce credit risk and manage regulatory capital levels. 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 Interest Rate Swaps and Cap Contracts 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, and 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 $ 24,000 , gains of $ 8,000 and losses of $ 5,000 in commercial loan swap income resulting from fair value adjustments for the years ended December 31, 2025, 2024 and 2023, respectively. Credit Default Swap In December 2025, the Company entered into a credit default swap related to a $ 1.52 billion pool of on-balance sheet residential mortgage loans, as the buyer of credit protection, to manage regulatory capital levels and reduce credit risk. The swap is a freestanding derivative as the contract is distinct from the referenced loan agreements and is executed with a separate counterparty. Under the terms of the swap contract, the Company will be compensated for certain credit-related losses on the residential mortgage loan pool, which have a total remaining principal balance of $ 1.50 billion as of December 31, 2025. The credit default swap is measured at fair value in either other assets or other liabilities on the Consolidated Statements of Financial Condition, and the related gains or losses are recognized in other non-interest income on the Consolidated Statements of Income. The loss on the credit default swap for the year ended December 31, 2025 was $ 234,000 . As the buyer of credit protection, the Company pays a premium to the protection seller in return for the right to receive a payment if a specified credit event occurs. The credit default swap terminates in October 2055. Derivatives Designated as Hedging Instruments Interest Rate Swap Contracts - Fair Value Hedge During 2025, the Company entered into interest rate swap derivatives to hedge the changes in fair value of AFS debt securities due to changes in interest rates. The swaps hedge the interest rate risk component of the change in fair value of the hedged items (i.e., hedged layers of AFS debt securities), and were designated and qualified as portfolio layer method fair value hedges under ASC Topic 815, Derivatives and Hedging. The last of the fair value hedges is scheduled to expire in October 2042. 117 For AFS securities that are included in a fair value hedge relationship, changes in fair value related to changes to the benchmark interest rate on AFS securities are immediately recognized into interest income in the Consolidated Statements of Income, and are offset by the change in the fair value of the interest rate swap derivatives. Changes in fair value of the AFS securities that are unrelated to interest rate risk are recorded in OCI as net unrealized gains (losses) on AFS securities. Throughout the life of the hedges, basis adjustments are maintained at the portfolio level and are allocated to individual assets only under certain circumstances. These circumstances include instances where the portfolio amount falls below the hedged layer amounts, or in cases of voluntary de-designation. The cumulative fair value hedge basis adjustments included in the carrying amount of hedged assets are reversed through the Consolidated Statements of Income in future periods as an adjustment to yield. All swaps involved in fair value hedges have been determined to be effective. The following table presents the amortized cost and cumulative basis adjustment for closed portfolios of securities used to designate fair value hedging relationships (in thousands): As of December 31, 2025 AFS securities: Amortized cost (excluding fair value hedge basis adjustment) $ 682,878 Fair value hedge basis adjustment ( 4,038 ) The table below presents the effects of fair value hedges on net interest income, as well as their location on the Consolidated Statements of Income (in thousands): Location of Gain/(Loss) Recognized in Income For the Year Ended December 31, 2025 AFS securities: Gain recognized on derivatives Interest income - debt securities $ 4,030 Loss recognized on hedged items Interest income - debt securities ( 4,038 ) Net loss recognized on fair value hedges Interest income - debt securities $ ( 8 ) Interest Rate Swap Contract - Cash Flow Hedge 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. 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 AOCI/AOCL attributable to the cash flow hedge derivative, net of tax, and the related gains/(losses) reclassified from AOCI into income (in thousands): For the Year Ended December 31, 2025 2024 2023 AOCL balance at beginning of period, net of tax $ ( 87 ) $ ( 36 ) $ ( 25 ) Unrealized losses recognized in OCI ( 108 ) ( 956 ) ( 808 ) Losses reclassified from AOCL into interest income 195 905 797 AOCL balance at end of period, net of tax $ — $ ( 87 ) $ ( 36 ) The cash flow hedge matures on January 1, 2026, and there will be no additional reclassifications into interest income. 118 Derivatives Not Designated as Hedging Instruments and Designated as Hedging Instruments 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 December 31, 2025 Derivatives Not Designated as Hedging Instruments Interest rate swaps and cap contracts $ 1,537,760 $ 53,768 $ 53,809 Credit default swap 75,802 — 234 Derivatives Designated as Hedging Instruments Interest rate swap contract - cash flow hedge 100,000 — — Interest rate swap contracts - fair value hedge 678,921 4,055 26 Total Derivatives $ 2,392,483 $ 57,823 $ 54,069 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 swaps contract 100,000 — 115 Total Derivatives $ 1,568,022 $ 91,352 $ 91,483 Credit Risk-Related Mitigating Features The Company is exposed to credit risk in the event of nonperformance by various derivative counterparties. The Company minimizes risk of nonperformance 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 cash collateral posted by the Company with these third parties at both December 31, 2025 and 2024. The amount of cash collateral received from these third parties was $ 42.9 million and $ 93.3 million at December 31, 2025 and 2024, respectively. The amount of cash collateral posted or received with these 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 interest rate derivatives which the Company executes with the commercial borrowers are collateralized by the borrowers’ commercial real estate financed by the Company. The credit default swap is not exposed to counterparty credit risk as it is fully collateralized. The aggregate fair value of all derivative financial instruments in a net liability position with credit measure contingencies and entered into with third parties was $ 54.0 million and $ 91.5 million at December 31, 2025 and 2024, respectively. 119 Note 17. 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 ROU assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands): December 31, 2025 December 31, 2024 Lease ROU Assets Classification Operating lease ROU assets Other assets $ 17,596 $ 15,452 Finance lease ROU asset Premises and equipment, net 838 1,071 Total lease ROU assets $ 18,434 $ 16,523 Lease Liabilities Operating lease liabilities (1) Other liabilities $ 19,037 $ 17,114 Finance lease liability Other borrowings 1,143 1,421 Total lease liabilities $ 20,180 $ 18,535 (1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $ 897,000 and $ 4.4 million as of December 31, 2025 and 2024, respectively. The following table represents the weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases: December 31, 2025 December 31, 2024 Weighted-Average Remaining Lease Term Operating leases 5.82 years 5.84 years Finance lease 3.59 years 4.59 years Weighted-Average Discount Rate Operating leases 3.57 % 3.08 % Finance lease 5.63 5.63 The following table represents lease expenses and other lease information (in thousands): For the Year Ended December 31, 2025 2024 2023 Lease Expense Operating lease expense $ 5,016 $ 4,586 $ 4,634 Finance lease expense: Amortization of ROU assets 233 233 228 Interest on lease liabilities (1) 71 86 101 Total $ 5,320 $ 4,905 $ 4,963 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,242 $ 4,773 $ 4,571 Operating cash flows from finance leases 71 86 101 Financing cash flows from finance leases 279 264 249 (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. 120 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, 2026 $ 350 $ 5,253 2027 350 4,154 2028 350 2,977 2029 209 2,701 2030 — 2,146 Thereafter — 4,038 Total 1,259 21,269 Less: Imputed interest ( 116 ) ( 2,232 ) Total lease liabilities $ 1,143 $ 19,037 Note 18. Variable Interest Entity On October 1, 2025, the Company disposed its controlling interest in Trident. Prior to the disposal, the Company accounted for Trident as a VIE under ASC 810, Consolidation, for which the Company was considered the primary beneficiary (i.e. the party that has a controlling financial interest). In accordance with ASC 810, Consolidation, the Company consolidated Trident’s assets and liabilities prior to the disposal. The summarized financial information for the Company’s consolidated VIE consisted of the following (in thousands): December 31, 2025 December 31, 2024 Cash and cash equivalents $ — $ 21,642 Other assets — 457 Total assets — 22,099 Other liabilities — 19,333 Net assets $ — $ 2,766 121 Note 19. Parent-Only Financial Information The following Condensed Statements of Financial Condition at December 31, 2025 and 2024 and Condensed Statements of Operations and Cash Flows for the years ended December 31, 2025, 2024 and 2023 for OceanFirst Financial Corp. (parent company only) reflect the Company’s investment in its wholly-owned subsidiaries, the Bank, and OceanFirst Risk Management, Inc., using the equity method of accounting. On October 1, 2025, the Company disposed its controlling interest in its Trident subsidiary. Condensed Statements of Financial Condition (in thousands) December 31, 2025 2024 Assets: Cash and due from banks $ 13,275 $ 13,214 Advances to Bank 74,629 98,321 Equity securities 84,619 77,327 ESOP loan receivable 1,461 2,871 Investment in subsidiaries 1,744,188 1,704,037 Goodwill — 5,827 Other assets 4,165 1,817 Total assets $ 1,922,337 $ 1,903,414 Liabilities and Stockholders’ Equity: Borrowings $ 254,094 $ 196,124 Other liabilities 5,693 4,533 Total liabilities 259,787 200,657 OceanFirst Financial Corp. stockholders’ equity 1,662,550 1,701,650 Non-controlling interest — 1,107 Total stockholders’ equity 1,662,550 1,702,757 Total liabilities and stockholders’ equity $ 1,922,337 $ 1,903,414 Condensed Statements of Operations (in thousands) For the Year Ended December 31, 2025 2024 2023 Dividend income – subsidiaries $ 62,398 $ 86,350 $ 97,043 Interest and dividend income – debt and equity securities 2,346 3,319 2,981 Interest income – advances to subsidiary Bank 3,043 4,423 2,182 Interest income – ESOP loan receivable 93 138 183 Net gain (loss) on equity investments 916 4,225 ( 3,732 ) Total income 68,796 98,455 98,657 Interest expense – borrowings 16,639 13,840 13,569 Operating expenses 8,245 4,875 4,050 Income before income taxes and undistributed earnings of subsidiaries 43,912 79,740 81,038 Benefit for income taxes 4,202 1,226 3,807 Income before undistributed earnings of subsidiaries 48,114 80,966 84,845 Undistributed earnings of subsidiaries 22,913 19,424 19,220 Net income 71,027 100,390 104,065 Net income attributable to non-controlling interest 49 325 36 Net income attributable to OceanFirst Financial Corp. $ 70,978 $ 100,065 $ 104,029 122 Condensed Statements of Cash Flows (in thousands) For the Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 71,027 $ 100,390 $ 104,065 Decrease (increase) in advances to subsidiary Bank 23,692 ( 31,032 ) ( 34,449 ) Undistributed earnings of subsidiary Bank ( 22,913 ) ( 19,424 ) ( 19,220 ) Net (gain) loss on equity investments ( 916 ) ( 4,225 ) 3,732 Net premium amortization in excess of discount accretion on securities 420 584 981 Amortization of deferred costs on borrowings 338 626 598 Net amortization of purchase accounting adjustments 751 727 704 Net loss on disposal of controlling interest in Trident 4,338 — — Change in other assets and other liabilities ( 763 ) 4,199 ( 3,995 ) Net cash provided by operating activities 75,974 51,845 52,416 Cash flows from investing activities: Proceeds from sales of equity investments 365 22,783 4,822 Purchase of equity investments ( 7,161 ) ( 3,082 ) ( 7,661 ) Repayments on ESOP loan receivable 1,410 1,370 2,510 Proceeds from disposal of controlling interest in Trident 2,750 — — Net cash (used in) provided by investing activities ( 2,636 ) 21,071 ( 329 ) Cash flows from financing activities: Net proceeds from issuance of subordinated notes 181,882 — — Repayments of other borrowings ( 125,000 ) — — Dividends paid ( 48,247 ) ( 50,880 ) ( 51,274 ) Purchase of treasury stock ( 24,945 ) ( 21,476 ) — Redemption of preferred stock ( 57,369 ) — — Exercise of stock options 717 571 702 Distributions to non-controlling interest ( 315 ) — ( 55 ) Net cash used in financing activities ( 73,277 ) ( 71,785 ) ( 50,627 ) Net increase in cash and due from banks 61 1,131 1,460 Cash and due from banks at beginning of year 13,214 12,083 10,623 Cash and due from banks at end of year $ 13,275 $ 13,214 $ 12,083 123 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.