{"url_path":"/sec/ocfc/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-27","source_url":"https://www.sec.gov/Archives/edgar/data/1004702/0001004702-26-000015-index.html","accession_number":"0001004702-26-000015","cik":"0001004702","ticker":"OCFC","issuer_name":"OCEANFIRST FINANCIAL CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1004702/0001004702-26-000015-index.html","primary_entity_key":"0001004702","primary_entity_name":"OCEANFIRST FINANCIAL CORP"},"word_count":24546,"has_tables":true,"body_markdown":"Item 8.Financial Statements and Supplementary Data\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and the Board of Directors of OceanFirst Financial Corp.\n\nOpinion on the Financial Statements\n\nWe 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.\n\nWe 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.\n\nBasis for Opinion\n\nThese 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.\n\nWe 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.\n\nCritical Audit Matters\n\nThe 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.\n\nAllowance for Loan Credit Losses - Refer to Notes 1 and 5 to the financial statements\n\nCritical Audit Matter Description\n\nThe 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.\n\nThe 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\n\n70\n\nCompany 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.\n\nAdjustments 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.\n\nWe 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.\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to qualitative adjustments within the ACL included the following, among others:\n\n•We tested the design and operating effectiveness of management’s controls covering the key data, assumptions and judgments impacting the ACL.\n\n•We evaluated the appropriateness of the Company’s accounting policies and methodologies, involved in determining the ACL.\n\n•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.\n\n•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.\n\nGoodwill - Refer to Note 1 to the financial statements\n\nCritical Audit Matter Description\n\nThe 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.\n\nThe 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.\n\nAuditing 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.\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to the judgements made by management included the following, among others:\n\n•We evaluated the reasonableness of the Company’s valuation methodology.\n\n•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.\n\n•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.\n\n71\n\n•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.\n\n•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.\n\n/s/ Deloitte & Touche LLP\n\nPhiladelphia, PA\n\nFebruary 27, 2026\n\nWe have served as the Company’s auditor since 2022.\n\n72\n\nReport of Independent Registered Public Accounting Firm\n\nTo the stockholders and the Board of Directors of OceanFirst Financial Corp.\n\nOpinion on Internal Control over Financial Reporting\n\nWe 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.\n\nWe 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.\n\nBasis for Opinion\n\nThe 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.\n\nWe 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.\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA 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.\n\nBecause 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.\n\n/s/ Deloitte & Touche LLP\n\nPhiladelphia, PA\n\nFebruary 27, 2026\n\n73\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION\n\n(dollars in thousands, except per share amounts)\n\n \n\nDecember 31, 2025December 31, 2024\n\nAssets\n\nCash and due from banks$135,130 $123,615 \n\nDebt securities available-for-sale, at estimated fair value (encumbered $897,491 at December 31, 2025 and $470,844 at December 31, 2024)\n1,231,827 827,500 \n\nDebt 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)\n881,568 1,045,875 \n\nEquity investments (encumbered $4,975 at December 31, 2025 and $0 at December 31, 2024)\n91,882 84,104 \n\nRestricted equity investments, at cost129,329 108,634 \n\nLoans receivable, net of allowance for loan credit losses of $83,726 at December 31, 2025 and $73,607 at December 31, 2024\n10,970,666 10,055,429 \n\nLoans held-for-sale5,768 21,211 \n\nInterest and dividends receivable49,010 45,914 \n\nOther real estate owned10,266 1,811 \n\nPremises and equipment, net112,743 115,256 \n\nBank owned life insurance270,301 270,208 \n\nGoodwill517,481 523,308 \n\nIntangibles9,046 12,680 \n\nOther assets149,300 185,702 \n\nTotal assets$14,564,317 $13,421,247 \n\nLiabilities and Stockholders’ Equity\n\nDeposits$10,964,405 $10,066,342 \n\nFHLB advances\n1,397,179 1,072,611 \n\nSecurities sold under agreements to repurchase with customers54,434 60,567 \n\nOther borrowings255,233 197,546 \n\nAdvances by borrowers for taxes and insurance21,245 23,031 \n\nOther liabilities209,271 298,393 \n\nTotal liabilities12,901,767 11,718,490 \n\nStockholders’ equity:\n\nPreferred stock, $0.01 par value, $1,000 liquidation preference, 5,000,000\n\nshares authorized, 0 and 57,370 shares issued at December 31, 2025 and December 31, 2024, respectively.\n— 1 \n\nCommon 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\n625 613 \n\nAdditional paid-in capital1,118,331 1,168,321 \n\nRetained earnings662,616 641,727 \n\nAccumulated other comprehensive loss(2,159)(15,853)\n\nLess: Unallocated common stock held by ESOP\n(1,301)(2,542)\n\nTreasury stock, 5,551,858 and 4,118,321 shares at December 31, 2025 and December 31, 2024, respectively\n(115,562)(90,617)\n\nOceanFirst Financial Corp. stockholders’ equity1,662,550 1,701,650 \n\nNon-controlling interest— 1,107 \n\nTotal stockholders’ equity1,662,550 1,702,757 \n\nTotal liabilities and stockholders’ equity$14,564,317 $13,421,247 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n74\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(in thousands, except per share amounts)\n\n For the Year Ended December 31,\n\n 202520242023\n\nInterest income:\n\nLoans$556,894 $545,243 $521,865 \n\nDebt securities72,057 77,749 59,273 \n\nEquity investments and other13,503 19,181 26,836 \n\nTotal interest income642,454 642,173 607,974 \n\nInterest expense:\n\nDeposits216,180 242,133 172,018 \n\nBorrowed funds66,051 66,005 66,225 \n\nTotal interest expense282,231 308,138 238,243 \n\nNet interest income360,223 334,035 369,731 \n\nProvision for credit losses16,171 7,689 17,678 \n\nNet interest income after provision for credit losses344,052 326,346 352,053 \n\nOther income (loss):\n\nBankcard services revenue6,534 6,197 5,912 \n\nTrust and asset management revenue1,514 1,745 2,529 \n\nFees and service charges17,865 21,791 21,254 \n\nNet gain on sales of loans3,686 2,358 428 \n\nNet gain (loss) on equity investments916 4,225 (3,732)\n\nNet loss from other real estate operations(285)(20)— \n\nIncome from bank owned life insurance7,753 7,905 5,280 \n\nCommercial loan swap income3,649 879 741 \n\nOther3,069 5,107 1,212 \n\nTotal other income44,701 50,187 33,624 \n\nOperating expenses:\n\nCompensation and employee benefits159,353 138,341 135,802 \n\nOccupancy22,874 20,811 21,188 \n\nEquipment3,597 4,250 4,650 \n\nMarketing5,653 5,165 4,238 \n\nFederal deposit insurance and regulatory assessments 11,599 10,955 11,157 \n\nData processing27,723 24,280 24,835 \n\nCheck card processing4,582 4,412 4,640 \n\nProfessional fees15,090 9,483 18,297 \n\nAmortization of intangibles3,634 3,333 3,984 \n\nBranch consolidation expense, net— — 70 \n\nMerger related expenses4,253 1,779 22 \n\nRestructuring charges11,526 — — \n\nOther operating expense26,353 23,068 20,029 \n\nTotal operating expenses296,237 245,877 248,912 \n\nIncome before provision for income taxes92,516 130,656 136,765 \n\nProvision for income taxes21,489 30,266 32,700 \n\nNet income71,027 100,390 104,065 \n\nNet income attributable to non-controlling interest49 325 36 \n\nNet income attributable to OceanFirst Financial Corp.70,978 100,065 104,029 \n\nDividends on preferred shares2,008 4,016 4,016 \n\nLoss on redemption of preferred stock1,842 — — \n\nNet income available to common stockholders$67,128 $96,049 $100,013 \n\nBasic earnings per share$1.17 $1.65 $1.70 \n\nDiluted earnings per share$1.17 $1.65 $1.70 \n\nAverage basic shares outstanding57,419 58,296 58,948 \n\nAverage diluted shares outstanding57,425 58,297 58,957 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n75\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(in thousands)\n\n \n\n For the Year Ended December 31,\n\n 202520242023\n\nNet income$71,027 $100,390 $104,065 \n\nOther comprehensive income:\n\nUnrealized gain on debt securities (net of tax expense of $4,235, $1,561 and $4,560 in 2025, 2024 and 2023, respectively)\n13,293 4,698 14,312 \n\nAccretion 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)\n288 244 290 \n\nUnrealized loss on cash flow derivative hedges (net of tax benefit of $34, $304 and $257 in 2025, 2024 and 2023, respectively)\n(108)(956)(808)\n\nReclassification adjustment for loss included in net income (net of tax expense of $70, $326 and $423 in 2025, 2024 and 2023, respectively)\n221 1,023 1,326 \n\nTotal other comprehensive income, net of tax13,694 5,009 15,120 \n\nTotal comprehensive income84,721 105,399 119,185 \n\nLess: comprehensive income attributable to non-controlling interest49 325 36 \n\nTotal comprehensive income attributable to OceanFirst Financial Corp.84,672 105,074 119,149 \n\nLess: dividends on preferred shares2,008 4,016 4,016 \n\nLess: loss on redemption of preferred stock1,842 — — \n\nTotal comprehensive income available to common stockholders$80,822 $101,058 $115,133 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n76\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY\n\n(dollars in thousands, except per share amounts)\n\nFor the Years Ended December 31, 2025, 2024 and 2023\n\n \n\nPreferred\nStockCommon\nStockAdditional\nPaid-In\nCapitalRetained\nEarningsAccumulated\nOther\nComprehensive\n(Loss) GainEmployee\nStock\nOwnership\nPlanTreasury\nStockNon-Controlling InterestTotal\n\nBalance at December 31, 2022$1 $612 $1,154,821 $540,507 $(35,982)$(6,191)$(69,106)$802 $1,585,464 \n\nNet income— — — 104,029 — — — 36 104,065 \n\nOther comprehensive income, net\n   of tax— — — — 15,120 — — — 15,120 \n\nStock compensation— — 5,854 — — — — — 5,854 \n\nAllocation of ESOP stock\n— — (341)— — 2,411 — — 2,070 \n\nCash dividend – $0.80 per share\n— — — (47,258)— — — — (47,258)\n\nExercise of stock options— 1 1,421 (720)— — — — 702 \n\nPreferred stock dividend— — — (4,016)— — — — (4,016)\n\nDistribution to non-controlling interest— — — — — — — (55)(55)\n\nBalance at December 31, 20231 613 1,161,755 592,542 (20,862)(3,780)(69,106)782 1,661,945 \n\nNet income— — — 100,065 — — — 325 100,390 \n\nOther comprehensive income, net\n   of tax— — — — 5,009 — — — 5,009 \n\nStock compensation— — 6,084 — — — — — 6,084 \n\nAllocation of ESOP stock\n— — (124)— — 1,238 — — 1,114 \n\nCash dividend – $0.80 per share\n— — — (46,864)— — — — (46,864)\n\nExercise of stock options— — 571 — — — — — 571 \n\nRepurchase 1,383,238 shares of\n\n   common stock\n— — 35 — — — (21,511)— (21,476)\n\nPreferred stock dividend— — — (4,016)— — — — (4,016)\n\nBalance at December 31, 20241 613 1,168,321 641,727 (15,853)(2,542)(90,617)1,107 1,702,757 \n\nNet income— — — 70,978 — — — 49 71,027 \n\nOther comprehensive income, net\n   of tax\n— — — — 13,694 — — — 13,694 \n\nStock compensation— 12 4,857 — — — — — 4,869 \n\nAllocation of ESOP stock\n— — (74)— — 1,241 — — 1,167 \n\nCash dividend – $0.80 per share\n— — — (46,239)— — — — (46,239)\n\nExercise of stock options— — 717 — — — — — 717 \n\nRepurchase 1,433,537 shares of\n\n   common stock\n— — 37 — — — (24,945)— (24,908)\n\nPreferred stock dividend— — — (2,008)— — — — (2,008)\n\nRedemption of preferred stock(1)— (55,527)(1,842)— — — — (57,370)\n\nDeconsolidation of Trident— — — — — — — (841)(841)\n\nDistribution to non-controlling interest— — — — — — — (315)(315)\n\nBalance at December 31, 2025$— $625 $1,118,331 $662,616 $(2,159)$(1,301)$(115,562)$— $1,662,550 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n77\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(dollars in thousands)\n\n For the Year Ended December 31,\n\n 202520242023\n\nCash flows from operating activities:\n\nNet income$71,027 $100,390 $104,065 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nDepreciation and amortization of premises and equipment10,300 10,903 12,327 \n\nAllocation of ESOP stock\n1,167 1,114 2,070 \n\nStock compensation4,869 6,084 5,854 \n\nNet excess tax expense on stock compensation195 365 243 \n\nAmortization of intangibles3,634 3,333 3,984 \n\nNet accretion of purchase accounting adjustments(1,455)(2,865)(5,848)\n\nAmortization of servicing asset480 308 90 \n\nNet (discount) premium amortization in excess of discount accretion on securities(3,539)870 3,133 \n\nNet amortization of deferred costs on borrowings338 626 598 \n\nNet amortization of deferred fees/costs and premiums/discounts on loans(9,429)(3,055)(1,094)\n\nProvision for credit losses16,171 7,689 17,678 \n\nNet write-down of fixed assets held-for-sale to net realizable value— — 459 \n\nNet loss (gain) on sale of fixed assets2 (131)(26)\n\nNet (gain) loss on equity investments(916)(4,225)3,732 \n\nNet gain on sales of loans(3,686)(2,358)(428)\n\nNet loss on sale of available-for-sale securities34 106 697 \n\nProceeds from sales of residential loans held for sale504,329 270,171 58,495 \n\nResidential loans originated for sale(485,200)(283,858)(62,543)\n\nWrite down of other real estate owned198 — — \n\nIncrease in value of bank owned life insurance(7,246)(6,566)(5,280)\n\nNet (gain) loss on sale of assets held for sale— (855)233 \n\n(Increase) decrease in interest and dividends receivable(3,096)5,960 (7,170)\n\nDeferred tax provision (benefit)3,009 (337)3,151 \n\nNet loss on disposal of controlling interest in Trident4,338 — — \n\nDecrease (increase) in other assets29,319 (3,364)34,504 \n\nDecrease in other liabilities(47,632)(8,062)(44,663)\n\nTotal adjustments16,184 (8,147)20,196 \n\nNet cash provided by operating activities87,211 92,243 124,261 \n\nCash flows from investing activities:\n\nNet (increase) decrease in loans receivable(913,989)199,094 (243,545)\n\nPurchases of loan pools(26,859)(84,464)(35,904)\n\nDiscounts received (premiums paid) on purchased loan pools2,562 8,397 (1,210)\n\nProceeds from sale of loans8,640 — — \n\nPurchase of debt securities available-for-sale(809,714)(256,784)(302,909)\n\nPurchase of debt securities held-to-maturity— (6,971)(65,567)\n\nPurchase of equity investments(7,647)(3,082)(7,661)\n\nProceeds from maturities and calls of debt securities available-for-sale9,914 19,537 22,376 \n\nProceeds from maturities and calls of debt securities held-to-maturity52,715 22,217 19,425 \n\nProceeds from sales of debt securities available-for-sale141,638 7,121 1,300 \n\nProceeds from sales of equity investments365 22,782 4,822 \n\nPrincipal repayments on debt securities available-for-sale269,737 162,329 926 \n\nPrincipal repayments on debt securities held-to-maturity114,613 100,472 108,037 \n\nProceeds from bank owned life insurance7,153 2,856 385 \n\n78\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)\n\n(dollars in thousands) \n\n For the Year Ended December 31,\n\n 202520242023\n\nCash flows from investing activities (continued):\n\nProceeds from the redemption of restricted equity investments336,020 81,199 128,964 \n\nPurchases of restricted equity investments(356,715)(96,067)(113,447)\n\nProceeds from sales of other real estate owned912 — — \n\nProceeds from sales of assets held-for-sale— 883 3,719 \n\nPurchases of premises and equipment(7,700)(7,567)(7,708)\n\nProceeds from disposal of premises and equipment— 3,380 — \n\nProceeds from disposal of controlling interest in Trident2,750 — — \n\nNet cash consideration paid for acquisition— (68,932)— \n\nNet cash (used in) provided by investing activities(1,175,605)106,400 (487,997)\n\nCash flows from financing activities:\n\nNet increase (decrease) in deposits857,974 (366,502)760,023 \n\n(Decrease) increase in short-term borrowings(6,204)(12,667)3,950 \n\nNet proceeds (repayment) from FHLB advances\n324,568 223,975 (362,530)\n\nNet proceeds from issuance of subordinated notes181,882 — — \n\nRepayments of other borrowings(125,000)— — \n\n(Decrease) increase in advances by borrowers for taxes and insurance(1,786)624 1,002 \n\nExercise of stock options717 571 702 \n\nPayment of employee taxes withheld from stock awards(1,402)(2,391)(2,350)\n\nPurchase of treasury stock(24,908)(21,476)— \n\nDividends paid(48,247)(50,880)(51,274)\n\nRedemption of preferred stock (57,370)— — \n\nDistributions to non-controlling interest(315)— (55)\n\nNet cash provided by (used) in financing activities1,099,909 (228,746)349,468 \n\nNet increase (decrease) in cash and due from banks and restricted cash11,515 (30,103)(14,268)\n\nCash and due from banks and restricted cash at beginning of year123,615 153,718 167,986 \n\nCash and due from banks and restricted cash at end of year$135,130 $123,615 $153,718 \n\nSupplemental disclosure of cash flow information:\n\nCash and due from banks at beginning of year$123,615 $153,718 $167,946 \n\nRestricted cash at beginning of year— — 40 \n\nCash and due from banks and restricted cash at beginning of year$123,615 $153,718 $167,986 \n\nCash and due from banks at end of year$135,130 $123,615 $153,718 \n\nRestricted cash at end of year— — — \n\nCash and due from banks and restricted cash at end of year$135,130 $123,615 $153,718 \n\nCash paid during the year for:\n\nInterest$279,171 $320,264 $225,405 \n\nIncome taxes20,689 33,786 29,331 \n\nNon-cash activities:\n\nAccretion of unrealized loss on securities reclassified to held-to-maturity487 413 503 \n\nNet loan charge-offs5,445 1,555 8,382 \n\nTransfer of premises and equipment to assets held-for-sale— — 1,302 \n\nTransfer of securities from held-to-maturity to available-for-sale— 500 — \n\nTransfer of loans receivable to other real estate owned9,565 — — \n\nTransfer of loans receivable to loans held-for-sale8,640 — — \n\nSettlement of preexisting loan receivable from Spring Garden\n— 96,979 — \n\n79\n\nOceanFirst Financial Corp.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)\n\n(dollars in thousands) \n\nFor the Year Ended December 31,\n\n202520242023\n\nSupplemental disclosure of cash flow information (continued):\n\nAcquisition:\n\nNon-cash assets acquired:\n\nLoans$— $140,062 $— \n\nPremises and equipment— 157 — \n\nOther real estate owned— 1,666 — \n\nOther assets— 1,122 — \n\nGoodwill and other intangible assets, net— 23,662 — \n\nTotal non-cash assets acquired$— $166,669 $— \n\nLiabilities assumed:\n\nOther liabilities— 4,033 — \n\nTotal lease and other liabilities$— $4,033 $— \n\nTotal liabilities assumed$— $4,033 $— \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n80\n\nNotes to Consolidated Financial Statements\n\nNote 1. Summary of Significant Accounting Policies\n\nPrinciples of Consolidation\n\nThe 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.\n\nIn 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.\n\nBusiness\n\nThe 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.\n\nBasis of Financial Statement Presentation\n\nThe 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.\n\nCash and Cash Equivalents\n\nCash 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.\n\nSecurities\n\nSecurities 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.\n\nManagement 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\n\n81\n\ncomponent 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.\n\nUpon 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.\n\nSecurities 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.\n\nCredit Losses for Available-for-Sale Debt Securities\n\nFor 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.\n\nOn 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.\n\nIf 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.\n\nThe 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.\n\nLoans Receivable\n\nLoans 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.\n\nLoan 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.\n\nLoans 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.\n\nLoans Held for Sale and Mortgage Servicing Rights\n\n82\n\nLoans 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.\n\nFor 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.\n\nACL\n\nUnder 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.\n\nThe 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.\n\nExpected 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.\n\nThe 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.\n\nThe 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.\n\nThe 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.\n\n83\n\nCollateral Dependent Financial Assets\n\nFor 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.\n\nModification to Borrowers Experiencing Financial Difficulty\n\nThe 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.\n\nLoan Commitments and Allowance for Loan Credit Losses on Off-Balance Sheet Credit Exposures\n\nFinancial 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.\n\nThe 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.\n\nAcquired Loans\n\nAcquired 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.\n\nLoans 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.\n\nFor 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.\n\nThe subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.\n\nOREO\n\nOther 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.\n\n84\n\nPremises and Equipment\n\nLand 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.\n\nLeases\n\nThe 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.\n\nLease 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.\n\nIncome Taxes\n\nThe 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.\n\nBOLI\n\nBank 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.\n\nIntangible Assets\n\nIntangible assets resulting from acquisitions, under the acquisition method of accounting, consists of goodwill, customer relationship intangible, and core deposit intangibles. 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.\n\n85\n\nGoodwill represents the excess of the purchase price 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.\n\nThe 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.\n\nThe 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.\n\nThe 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.\n\nThe 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.\n\nSegment Reporting\n\nThe 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.\n\nOperating 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.\n\nFurther, 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.\n\nEarnings Per Share\n\nBasic 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.\n\n86\n\nStock-Based Compensation\n\nThe 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.\n\nDerivative Instruments\n\nThe 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.\n\nCash 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.\n\nFair 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.\n\nTo 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 derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued prospectively.\n\nImpact of New Accounting Pronouncements\n\nAccounting Pronouncements Adopted in 2025\n\nIn 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.\n\nIn 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.\n\nIn 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.\n\n87\n\nRecent Accounting Pronouncements Not Yet Adopted\n\nIn 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.\n\nIn 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.\n\nIn 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.\n\nIn 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.\n\nIn 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.\n\nIn 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.\n\nNote 2. Regulatory Matters\n\nThe 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.\n\nUnder 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\n\n88\n\ninstitutions 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 ratio 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.\n\nThe 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):\n\nActualFor capital adequacy\npurposesTo be well-capitalized\nunder Prompt\nCorrective Action\n\nAs of December 31, 2025AmountRatioAmount  Ratio  Amount  Ratio  \n\nCompany:\n\nTier 1 capital (to average assets)$1,193,942 8.65 %$551,966 4.00 %N/AN/A\n\nCommon equity Tier 1 (to risk-weighted assets)\n1,119,172 10.72 730,982 7.00 \n(1)\nN/AN/A\n\nTier 1 capital (to risk-weighted assets)1,193,942 11.43 887,621 8.50 \n(1)\nN/AN/A\n\nTotal capital (to risk-weighted assets)1,467,329 14.05 1,096,473 10.50 \n(1)\nN/AN/A\n\nBank:\n\nTier 1 capital (to average assets)$1,194,054 8.71 %$548,260 4.00 %$685,326 5.00 %\n\nCommon equity Tier 1 (to risk-weighted assets)\n1,194,054 11.54 724,359 7.00 \n(1)\n672,619 6.50 \n\nTier 1 capital (to risk-weighted assets)1,194,054 11.54 879,578 8.50 \n(1)\n827,839 8.00 \n\nTotal capital (to risk-weighted assets)1,282,441 12.39 1,086,538 10.50 \n(1)\n1,034,798 10.00 \n\nAs of December 31, 2024\n\nCompany:\n\nTier 1 capital (to average assets)$1,235,832 9.50 %$520,239 4.00 %N/AN/A\n\nCommon equity Tier 1 (to risk-weighted assets)\n1,105,180 11.17 692,897 7.00 \n(1)\nN/AN/A\n\nTier 1 capital (to risk-weighted assets)1,235,832 12.49 841,375 8.50 \n(1)\nN/AN/A\n\nTotal capital (to risk-weighted assets)1,437,278 14.52 1,039,345 10.50 \n(1)\nN/AN/A\n\nBank:\n\nTier 1 capital (to average assets)$1,161,564 8.99 %$516,798 4.00 %$645,998 5.00 %\n\nCommon equity Tier 1 (to risk-weighted assets)\n1,161,564 11.83 687,383 7.00 \n(1)\n638,284 6.50 \n\nTier 1 capital (to risk-weighted assets)1,161,564 11.83 834,679 8.50 \n(1)\n785,580 8.00 \n\nTotal capital (to risk-weighted assets)1,238,011 12.61 1,031,074 10.50 \n(1)\n981,975 10.00 \n\n(1)    Includes the Capital Conservation Buffer of 2.50%.\n\nThe Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action regulations.\n\nCapital 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.\n\n89\n\nNote 3. Business Combinations and Dispositions\n\nPending Merger with Flushing\n\nOn 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.\n\nUpon 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.\n\nConcurrently 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.\n\nSubject 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.\n\nMerger Related Expenses\n\nThe 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:\n\nFor the Year Ended December 31,\n\n202520242023\n\n(in thousands)\n\nProfessional fees$4,250 $1,506 $12 \n\nData processing fees— — 10 \n\nOther/miscellaneous fees3 273 — \n\nMerger related expenses$4,253 $1,779 $22 \n\nMerger 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.\n\nDisposition of Trident\n\nOn 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.\n\n90\n\nSpring Garden Acquisition\n\nOn 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.\n\nThe 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.\n\nThe 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):\n\nAt October 1, 2024\n\nFair Value\n\nTotal consideration paid (1)\n$162,704 \n\nAssets acquired:\n\nCash and cash equivalents$68 \n\nLoans140,062 \n\nOther real estate owned1,666 \n\nPremises and equipment157 \n\nOther assets1,122 \n\nCustomer relationship intangible6,500 \n\nTotal assets acquired149,575 \n\nLiabilities assumed:\n\nOther liabilities4,033 \n\nTotal liabilities assumed4,033 \n\nNet assets acquired$145,542 \n\nGoodwill recorded$17,162 \n\n(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.\n\nThe Company finalized its review of the acquired assets and liabilities and will not be recording any further adjustments to the carrying value.\n\nFair Value Measurement of Assets Acquired and Liabilities Assumed\n\nThe 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.\n\nLoans\n\nThe 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.\n\nTo 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.\n\n91\n\nThe 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.\n\nTo 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.\n\nCustomer Relationship Intangible\n\nThe 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.\n\nIntangibles\n\nThe estimated future amortization expense for core deposit intangible and customer relationship intangible over the next five years and thereafter are as follows (in thousands):\n\nFor the Year Ending December 31,Amortization Expense\n\n2026$3,269 \n\n20272,616 \n\n20281,600 \n\n2029918 \n\n2030431 \n\nThereafter212 \n\nTotal$9,046 \n\n92\n\nNote 4. Securities\n\nThe 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):\n\n Amortized\nCostGross\nUnrealized\nGainsGross\nUnrealized\nLossesEstimated\nFair\nValueAllowance for Securities Credit Losses\n\nAt December 31, 2025\n\nDebt securities available-for-sale:\n\nU.S. government and agency obligations$54,607 $— $(2,666)$51,941 $— \n\nState, municipal and sovereign debt obligations75,776 7,359 — 83,135 — \n\nCorporate debt securities27,947 575 (298)28,224 — \n\nAsset-backed securities114,595 60 (161)114,494 — \n\nMBS:\n\nAgency residential857,079 1,773 (3,830)855,022 — \n\nAgency commercial 108,070 2 (9,061)99,011 — \n\nTotal mortgage-backed securities965,149 1,775 (12,891)954,033 — \n\nTotal excluding fair value hedge basis adjustment1,238,074 9,769 (16,016)1,231,827 — \n\nFair value hedge basis adjustment (1)\n(4,038)— 4,038 — — \n\nTotal debt securities available-for-sale$1,234,036 $9,769 $(11,978)$1,231,827 $— \n\nDebt securities held-to-maturity:\n\nState and municipal debt obligations$165,267 $434 $(8,518)$157,183 $(22)\n\nCorporate debt securities48,986 251 (692)48,545 (772)\n\nMortgage-backed securities:\n\nAgency residential589,078 1,788 (44,521)546,345 — \n\nAgency commercial77,517 8 (5,256)72,269 — \n\nNon-agency commercial1,531 — (83)1,448 (17)\n\nTotal mortgage-backed securities668,126 1,796 (49,860)620,062 (17)\n\nTotal debt securities held-to-maturity$882,379 $2,481 $(59,070)$825,790 $(811)\n\nTotal debt securities$2,116,415 $12,250 $(71,048)$2,057,617 $(811)\n\nAt December 31, 2024\n\nDebt securities available-for-sale:\n\nU.S. government and agency obligations$62,396 $11 $(5,022)$57,385 $— \n\nCorporate debt securities14,042 43 (762)13,323 — \n\nAsset-backed securities197,116 235 (84)197,267 — \n\nMortgage-backed securities:\n\nAgency residential465,108 1,256 (801)465,563 — \n\nAgency commercial108,610 — (14,648)93,962 — \n\nTotal mortgage-backed securities573,718 1,256 (15,449)559,525 — \n\nTotal debt securities available-for-sale$847,272 $1,545 $(21,317)$827,500 $— \n\nDebt securities held-to-maturity:\n\nState and municipal debt obligations$201,369 $199 $(13,665)$187,903 $(31)\n\nCorporate debt securities65,350 775 (1,416)64,709 (734)\n\nMortgage-backed securities:\n\nAgency residential680,052 44 (73,110)606,986 — \n\nAgency commercial79,925 1 (5,878)74,048 — \n\nNon-agency commercial20,146 — (875)19,271 (202)\n\nTotal mortgage-backed securities780,123 45 (79,863)700,305 (202)\n\nTotal debt securities held-to-maturity$1,046,842 $1,019 $(94,944)$952,917 $(967)\n\nTotal debt securities$1,894,114 $2,564 $(116,261)$1,780,417 $(967)\n\n(1)Refer to Note 16, Derivatives and Hedging Activities for additional information.\n\n93\n\nThe following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the years ended December 31, 2025 and 2024 (in thousands):\n\nFor the Years Ended December 31,\n\n20252024\n\nAllowance for securities credit losses\n\nBeginning balance$(967)$(1,133)\n\nBenefit for credit losses156 166 \n\nTotal ending allowance balance$(811)$(967)\n\nThe 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):\n\nInvestment GradeNon-Investment Grade/Non-ratedTotal\n\nAt December 31, 2025\n\nState and municipal debt obligations$165,267 $— $165,267 \n\nCorporate debt securities34,811 14,175 48,986 \n\nNon-agency commercial MBS\n1,531 — 1,531 \n\nTotal debt securities held-to-maturity$201,609 $14,175 $215,784 \n\nThere 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.\n\nThe amortized cost and estimated fair value of debt securities at December 31, 2025 by contractual maturity are shown below (in thousands):\n\nAt December 31, 2025\nAmortized\n\nCost (1)\nEstimated\nFair Value\n\nLess than one year$35,121 $34,525 \n\nDue after one year through five years154,779 150,459 \n\nDue after five years through ten years98,248 97,036 \n\nDue after ten years199,030 201,502 \n\n$487,178 $483,522 \n\n(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.\n\nActual 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 $114.5 million, respectively, were callable prior to the maturity date. Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.\n\n94\n\nThe estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at December 31, 2025 and December 31, 2024, segregated by the duration of the unrealized losses, are as follows (in thousands): \n\n Less than 12 Months12 Months or LongerTotal\n\n Estimated\nFair Value\nUnrealized\n\nLosses (1)\nEstimated\nFair Value\nUnrealized\n\nLosses (1)\nEstimated\nFair ValueUnrealized\nLosses\n\nAt December 31, 2025\n\nDebt securities AFS:\n\nU.S. government and agency obligations$— $— $51,941 $(2,666)$51,941 $(2,666)\n\nCorporate debt securities4,712 (97)3,798 (201)8,510 (298)\n\nAsset-backed securities68,805 (161)— — 68,805 (161)\n\nMBS:\n\nAgency residential 498,047 (3,771)21,547 (59)519,594 (3,830)\n\nAgency commercial— — 98,518 (9,061)98,518 (9,061)\n\nTotal MBS\n498,047 (3,771)120,065 (9,120)618,112 (12,891)\n\nTotal debt securities AFS\n571,564 (4,029)175,804 (11,987)747,368 (16,016)\n\nDebt securities HTM:\n\nState and municipal debt obligations245 — 138,624 (8,518)138,869 (8,518)\n\nCorporate debt securities4,458 (241)14,295 (451)18,753 (692)\n\nMBS:\n\nAgency residential23,548 (72)425,748 (44,449)449,296 (44,521)\n\nAgency commercial— — 71,509 (5,256)71,509 (5,256)\n\nNon-agency commercial459 (1)989 (82)1,448 (83)\n\nTotal MBS\n24,007 (73)498,246 (49,787)522,253 (49,860)\n\nTotal debt securities HTM\n28,710 (314)651,165 (58,756)679,875 (59,070)\n\nTotal debt securities$600,274 $(4,343)$826,969 $(70,743)$1,427,243 $(75,086)\n\nAt December 31, 2024\n\nDebt securities AFS:\n\nU.S. government and agency obligations$3,221 $— $49,538 $(5,022)$52,759 $(5,022)\n\nCorporate debt securities4,793 (55)6,029 (707)10,822 (762)\n\nAsset-backed securities31,588 (21)59,148 (63)90,736 (84)\n\nMBS:\n\nAgency residential202,961 (801)— — 202,961 (801)\n\nAgency commercial— — 93,962 (14,648)93,962 (14,648)\n\nTotal MBS\n202,961 (801)93,962 (14,648)296,923 (15,449)\n\nTotal debt securities AFS\n242,563 (877)208,677 (20,440)451,240 (21,317)\n\nDebt securities HTM:\n\nState and municipal debt obligations7,098 (176)169,434 (13,489)176,532 (13,665)\n\nCorporate debt securities1,247 (219)25,518 (1,197)26,765 (1,416)\n\nMBS:\n\nAgency residential114,557 (1,647)479,847 (71,463)594,404 (73,110)\n\nAgency commercial3,894 (20)69,912 (5,858)73,806 (5,878)\n\nNon-agency commercial— — 19,271 (875)19,271 (875)\n\nTotal MBS\n118,451 (1,667)569,030 (78,196)687,481 (79,863)\n\nTotal debt securities HTM\n126,796 (2,062)763,982 (92,882)890,778 (94,944)\n\nTotal debt securities$369,359 $(2,939)$972,659 $(113,322)$1,342,018 $(116,261)\n\n(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.\n\nThe 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\n\n95\n\nlosses 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.\n\nEquity Investments\n\nAt 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.\n\nThe 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):\n\nFor the Year Ended December 31,\n\n202520242023\n\nNet gain (loss) on equity investments$916 $4,225 $(3,732)\n\nLess: Net gain (loss) recognized on equity investments sold352 (49)(5,462)\n\nUnrealized gains recognized on equity investments still held$564 $4,274 $1,730 \n\n96\n\nNote 5. Loans Receivable, Net\n\nLoans receivable, net at December 31, 2025 and 2024 consisted of the following (in thousands):\n\n December 31,\n\n 20252024\n\nCommercial:\n\nCommercial real estate – investor$5,420,989 $5,287,683 \n\nCommercial and industrial:\n\nCommercial and industrial – real estate986,431 902,219 \n\nCommercial and industrial – non-real estate1,227,556 647,945 \n\nTotal commercial and industrial2,213,987 1,550,164 \n\nTotal commercial7,634,976 6,837,847 \n\nConsumer:\n\nResidential real estate3,194,264 3,049,763 \n\nOther consumer\n202,763 230,462 \n\nTotal consumer3,397,027 3,280,225 \n\nTotal loans receivable11,032,003 10,118,072 \n\nDeferred origination costs, net of fees22,389 10,964 \n\nAllowance for loan credit losses(83,726)(73,607)\n\nTotal loans receivable, net$10,970,666 $10,055,429 \n\nThe 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:\n\n    Pass: Loans classified as Pass are well protected by the paying capacity and net worth of the borrower.\n\n    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.\n\n    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.\n\n    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.\n\n97\n\nThe following tables summarize total loans by year of origination, internally assigned credit grades, and risk characteristics (in thousands):\n\n202520242023202220212020 and priorRevolving lines of creditTotal\n\nDecember 31, 2025\n\nCommercial real estate - investor\n\nPass$647,529 $65,950 $166,397 $1,161,291 $1,299,618 $1,427,844 $579,022 $5,347,651 \n\nSpecial Mention66 — — 2,932 — 8,735 725 12,458 \n\nSubstandard— 85 — 20,788 298 33,969 5,740 60,880 \n\nTotal commercial real estate - investor647,595 66,035 166,397 1,185,011 1,299,916 1,470,548 585,487 5,420,989 \n\nCommercial and industrial:\n\nCommercial and industrial - real estate\n\nPass255,690 74,284 58,970 90,142 59,476 403,738 31,844 974,144 \n\nSpecial Mention— 250 — — — 731 — 981 \n\nSubstandard— — — — — 11,306 — 11,306 \n\nTotal commercial and industrial - real estate255,690 74,534 58,970 90,142 59,476 415,775 31,844 986,431 \n\nCommercial and industrial - non-real estate\n\nPass325,180 181,538 40,761 30,417 8,314 35,057 589,300 1,210,567 \n\nSpecial Mention39 224 — — — — 690 953 \n\nSubstandard— 528 553 776 649 1,774 11,756 16,036 \n\nTotal commercial and industrial - non-real estate325,219 182,290 41,314 31,193 8,963 36,831 601,746 1,227,556 \n\nTotal commercial and industrial580,909 256,824 100,284 121,335 68,439 452,606 633,590 2,213,987 \n\nResidential real estate (1)\n\nPass471,828 225,885 209,979 501,308 743,610 1,034,301 — 3,186,911 \n\nSpecial Mention218 121 345 265 1,432 1,298 — 3,679 \n\nSubstandard207 1,590 396 93 445 943 — 3,674 \n\nTotal residential real estate472,253 227,596 210,720 501,666 745,487 1,036,542 — 3,194,264 \n\nOther consumer (1)\n\nPass27,971 24,292 23,141 13,697 15,086 93,425 3,242 200,854 \n\nSpecial Mention— — — — 8 82 — 90 \n\nSubstandard— 190 181 67 — 1,381 — 1,819 \n\nTotal other consumer\n27,971 24,482 23,322 13,764 15,094 94,888 3,242 202,763 \n\nTotal loans$1,728,728 $574,937 $500,723 $1,821,776 $2,128,936 $3,054,584 $1,222,319 $11,032,003 \n\n(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.\n\n98\n\n202420232022202120202019 and priorRevolving lines of creditTotal\n\nDecember 31, 2024\n\nCommercial real estate - investor\n\nPass$75,225 $140,863 $1,142,790 $1,290,047 $510,906 $1,264,536 $750,607 $5,174,974 \n\nSpecial Mention15 — 21,285 — — 18,225 4,477 44,002 \n\nSubstandard95 8 3,784 — 6,111 44,636 14,073 68,707 \n\nTotal commercial real estate - investor75,335 140,871 1,167,859 1,290,047 517,017 1,327,397 769,157 5,287,683 \n\nCommercial and industrial:\n\nCommercial and industrial - real estate\n\nPass82,104 62,799 140,578 90,720 40,746 442,685 31,776 891,408 \n\nSpecial Mention— — — — — 2,918 — 2,918 \n\nSubstandard— — — — 256 7,503 134 7,893 \n\nTotal commercial and industrial - real estate82,104 62,799 140,578 90,720 41,002 453,106 31,910 902,219 \n\nCommercial and industrial - non-real estate\n\nPass81,867 30,084 35,469 14,276 3,873 180,695 278,217 624,481 \n\nSpecial Mention— 4,735 — — 235 16 96 5,082 \n\nSubstandard— 4,326 1,019 749 — 256 12,032 18,382 \n\nTotal commercial and industrial - non-real estate81,867 39,145 36,488 15,025 4,108 180,967 290,345 647,945 \n\nTotal commercial and industrial163,971 101,944 177,066 105,745 45,110 634,073 322,255 1,550,164 \n\nResidential real estate (1)\n\nPass277,009 270,225 547,093 796,790 366,649 783,204 — 3,040,970 \n\nSpecial Mention— 92 224 449 — 1,476 — 2,241 \n\nSubstandard215 415 1,583 445 — 3,894 — 6,552 \n\nTotal residential real estate277,224 270,732 548,900 797,684 366,649 788,574 — 3,049,763 \n\nOther consumer (1)\n\nPass27,316 27,596 17,029 16,511 10,694 107,045 21,991 228,182 \n\nSpecial Mention— — — 62 — 219 — 281 \n\nSubstandard— 97 18 343 — 1,541 — 1,999 \n\nTotal other consumer\n27,316 27,693 17,047 16,916 10,694 108,805 21,991 230,462 \n\nTotal loans$543,846 $541,240 $1,910,872 $2,210,392 $939,470 $2,858,849 $1,113,403 $10,118,072 \n\n(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.\n\n99\n\nAn analysis of the allowance for credit losses on loans for the years ended December 31, 2025 and 2024 was as follows (in thousands):\n\nCommercial and Industrial\n\nCommercial\nReal Estate –\nInvestorCommercial and Industrial - Real EstateCommercial\nand \nIndustrial - Non-Real EstateResidential\nReal EstateOther ConsumerTotal\n\nFor the Year Ended December 31, 2025\n\nAllowance for credit losses on loans\n\nBalance at beginning of year$30,780 $3,817 $10,471 $27,587 $952 $73,607 \n\nProvision (benefit) for credit losses2,517 917 13,410 (1,547)267 15,564 \n\nCharge-offs(3,534)— (835)(1,451)(433)(6,253)\n\nRecoveries181 19 330 91 187 808 \n\nBalance at end of year$29,944 $4,753 $23,376 $24,680 $973 $83,726 \n\nFor the Year Ended December 31, 2024\n\nAllowance for credit losses on loans\n\nBalance at beginning of year$27,899 $4,354 $6,867 $27,029 $988 $67,137 \n\nInitial allowance on acquired loans from Spring Garden\n2,547 — — — — 2,547 \n\nProvision (benefit) for credit losses1,774 (569)3,586 428 259 5,478 \n\nCharge-offs (1,659)— — (76)(485)(2,220)\n\nRecoveries219 32 18 206 190 665 \n\nBalance at end of year$30,780 $3,817 $10,471 $27,587 $952 $73,607 \n\nThe following tables summarize gross charge-offs by vintage (in thousands):\n\n202520242023202220212020 and priorTotal\n\nFor the Year Ended December 31, 2025\n\nCommercial real estate – investor$(102)$(310)$(1,938)$(649)$(24)$(511)$(3,534)\n\nCommercial and industrial - non-real estate— (815)— (20)— — (835)\n\nResidential real estate(37)(218)(106)(319)(345)(426)(1,451)\n\nConsumer— — — (48)— (385)(433)\n\nTotal charge-offs$(139)$(1,343)$(2,044)$(1,036)$(369)$(1,322)$(6,253)\n\n2023202220212019 and priorTotal\n\nFor the Year Ended December 31, 2024\n\nCommercial real estate – investor (1)\n$— $(13)$(46)$(1,600)$(1,659)\n\nResidential real estate(33)(41)— (2)(76)\n\nConsumer— — — (485)(485)\n\nTotal charge-offs$(33)$(54)$(46)$(2,087)$(2,220)\n\n(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.\n\nA 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. \n\n100\n\nThe following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of December 31, 2025 and 2024 (in thousands):\n\n December 31,\n\n 20252024\n\nCommercial real estate – investor$13,636 $17,000 \n\nCommercial and industrial:\n\nCommercial and industrial – real estate4,813 4,787 \n\nCommercial and industrial – non-real estate640 32 \n\nTotal commercial and industrial5,453 4,819 \n\nResidential real estate (1)\n6,200 10,644 \n\nOther consumer(1)\n2,502 3,064 \n\nTotal non-performing loans$27,791 $35,527 \n\n(1) The year ended December 31, 2025 included the sale of non-performing residential and consumer loans of $9.8 million.\n\nAt 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.\n\nThe 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):\n\n30-59\nDays\nPast Due60-89\nDays\nPast Due90 Days or Greater\nPast DueTotal\nPast DueLoans Not\nPast DueTotal\n\nDecember 31, 2025\n\nCommercial real estate – investor$25,516 $974 $12,333 $38,823 $5,382,166 $5,420,989 \n\nCommercial and industrial:\n\nCommercial and industrial - real estate587 — 4,281 4,868 981,563 986,431 \n\nCommercial and industrial - non-real estate1,220 235 578 2,033 1,225,523 1,227,556 \n\nTotal commercial and industrial1,807 235 4,859 6,901 2,207,086 2,213,987 \n\nResidential real estate14,517 3,672 3,673 21,862 3,172,402 3,194,264 \n\nOther consumer\n1,027 60 1,819 2,906 199,857 202,763 \n\nTotal loans$42,867 $4,941 $22,684 $70,492 $10,961,511 $11,032,003 \n\nDecember 31, 2024\n\nCommercial real estate – investor$4,624 $8,880 $10,877 $24,381 $5,263,302 $5,287,683 \n\nCommercial and industrial:\n\nCommercial and industrial - real estate941 — 1,392 2,333 899,886 902,219 \n\nCommercial and industrial - non-real estate3 — 16 19 647,926 647,945 \n\nTotal commercial and industrial944 — 1,408 2,352 1,547,812 1,550,164 \n\nResidential real estate18,518 2,242 6,551 27,311 3,022,452 3,049,763 \n\nOther consumer\n1,060 282 1,999 3,341 227,121 230,462 \n\nTotal loans$25,146 $11,404 $20,835 $57,385 $10,060,687 $10,118,072 \n\nLoan Modifications to Borrowers Experiencing Financial Difficulty\n\nIn 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 $30.9 million, respectively. There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of December 31, 2025 or December 31, 2024.\n\n101\n\nThe following table presents loan modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2025 and 2024 (in thousands):\n\nTerm ExtensionCombination of Term Extension and Other than Insignificant Payment DelayCombination of Term Extension and Interest Rate ReductionTotal% of Total by Loan Portfolio Segment\n\nFor the Year Ended December 31, 2025\n\nCommercial real estate – investor$— $4,423 $956 $5,379 0.10 %\n\nResidential real estate246 — — 246 0.01 \n\n$246 $4,423 $956 $5,625 0.05 %\n\nTerm ExtensionInterest Rate ReductionCombination of Term Extension and Interest Rate ReductionOther Than Insignificant Payment DelayCombination of Term Extension, Interest Rate Reduction and Other Than Insignificant Payment DelayTotal% of Total by Loan Portfolio Segment\n\nFor the Year Ended December 31, 2024\n\nCommercial real estate – investor$— $4,858 $7,000 $5,685 $1,604 $19,147 0.36 %\n\nCommercial and industrial – real estate— — — 2,822 — 2,822 0.31 \n\nResidential real estate128 — — — — 128 — \n\nOther consumer\n— — 146 — — 146 0.06 \n\n$128 $4,858 $7,146 $8,507 $1,604 $22,243 0.22 %\n\nThe modifications during the periods presented had an insignificant financial effect on the Company.\n\nThe 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):\n\nCurrent30 - 59 Days Past Due90 Days or Greater Past DueTotal\n\nDecember 31, 2025\n\nCommercial real estate – investor$4,423 $956 $— $5,379 \n\nResidential real estate246 — — 246 \n\n$4,669 $956 $— $5,625 \n\nDecember 31, 2024\n\nCommercial real estate – investor$19,147 $— $— $19,147 \n\nCommercial and industrial – real estate2,822 — — 2,822 \n\nResidential real estate— — 128 \n(1)\n128 \n\nOther consumer\n— — 146 \n(1)\n146 \n\n$21,969 $— $274 $22,243 \n\n(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.\n\n102\n\nNote 6. Interest and Dividends Receivable\n\nInterest and dividends receivable at December 31, 2025 and 2024 are summarized as follows (in thousands):\n\n December 31,\n\n 20252024\n\nLoans receivable$40,938 $37,836 \n\nDebt securities7,254 7,349 \n\nEquity investments and other (1)\n818 729 \n\nTotal interest and dividends receivable $49,010 $45,914 \n\n(1)Dividend income is included within equity investments and other on the Consolidated Statements of Income.\n\nNote 7. Premises and Equipment, Net\n\nPremises and equipment, net of accumulated depreciation and amortization expense at December 31, 2025 and 2024 are summarized as follows (in thousands):\n\nDecember 31,\n\n20252024\n\nLand$16,875 $16,605 \n\nBuildings and improvements136,305 133,312 \n\nLeasehold improvements7,105 7,074 \n\nFurniture and equipment38,413 37,079 \n\nCapitalized software9,753 8,722 \n\nFinance lease1,392 1,272 \n\nOther4,131 3,376 \n\nTotal213,974 207,440 \n\nAccumulated depreciation and amortization(101,231)(92,184)\n\nTotal premises and equipment, net$112,743 $115,256 \n\nDepreciation 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.\n\nNote 8. Deposits\n\nThe major types of deposits at December 31, 2025 and 2024 were as follows (dollars in thousands):\n\nDecember 31,\n\n20252024\n\nAmountWeighted\nAverage\nCostAmountWeighted\nAverage\nCost\n\nNon-interest-bearing$1,741,958 — %$1,617,182 — %\n\nInterest-bearing checking 4,354,485 2.05 4,000,553 2.11 \n\nMoney market deposit 1,412,917 2.43 1,301,197 3.00 \n\nSavings 986,195 0.55 1,066,438 0.72 \n\nTime deposits2,468,850 3.64 2,080,972 4.18 \n\nTotal deposits$10,964,405 2.00 %$10,066,342 2.17 %\n\nAccrued 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.\n\n103\n\nTime deposits at December 31, 2025 mature as follows (in thousands):\n\nFor the Year Ending December 31,Time Deposit Maturities\n\n2026$2,430,525 \n\n202722,320 \n\n20287,705 \n\n20294,947 \n\n20303,042 \n\nThereafter311 \n\nTotal$2,468,850 \n\nInterest expense on deposits for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):\n\nFor the Year Ended December 31,\n\n202520242023\n\nInterest-bearing checking$88,866 $86,320 $52,898 \n\nMoney market deposit 41,077 41,948 18,656 \n\nSavings 6,631 11,422 9,227 \n\nTime deposits79,606 102,443 91,237 \n\nTotal interest expense on deposits$216,180 $242,133 $172,018 \n\nNote 9. Borrowed Funds\n\nBorrowed funds are summarized as follows (dollars in thousands):\n\nDecember 31,\n\n20252024\n\nAmountWeighted\nAverage\nRateAmountWeighted\nAverage\nRate\n\nFHLB advances\n$1,397,179 4.19 %$1,072,611 4.62 %\n\nSecurities sold under agreements to repurchase with customers54,434 2.62 60,567 2.29 \n\nOther borrowings255,233 6.45 197,546 5.96 \n\nTotal borrowed funds$1,706,846 4.48 %$1,330,724 4.71 %\n\nAt 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.\n\nFHLB advances and repurchase agreements had contractual maturities at December 31, 2025 as follows (in thousands):\n\nFHLB Advances\nRepurchase Agreements\n\nFor the Year Ended December 31,\n\n2026$1,195,311 $54,434 \n\n2027200,501 — \n\n20281,367 — \n\nTotal$1,397,179 $54,434 \n\n104\n\nThe other borrowings at December 31, 2025 included the following (in thousands):\n\nType of DebtStated ValueCarrying ValueContractual Interest RateMaturity\n\nSubordinated debt$185,000 $181,979 6.375 %\n(1)\nNovember 15, 2035\n\nTrust preferred10,000 8,557 \n3 month SOFR plus 2.51%\nDecember 15, 2034\n\nTrust preferred30,000 24,684 \n3 month SOFR plus 1.61%\nMarch 15, 2036\n\nTrust preferred5,000 5,000 \n3 month SOFR plus 1.91%\nAugust 1, 2036\n\nTrust preferred7,500 7,500 \n3 month SOFR plus 1.92%\nNovember 1, 2036\n\nTrust preferred10,000 8,239 \n3 month SOFR plus 1.79%\nJune 30, 2037\n\nTrust preferred10,000 10,000 \n3 month SOFR plus 2.01%\nSeptember 1, 2037\n\nTrust preferred10,000 8,131 \n3 month SOFR plus 1.65%\nOctober 1, 2037\n\nFinance lease1,143 1,143 5.625 %July 31, 2029\n\nTotal$268,643 $255,233 \n\n(1)Adjusts to a floating rate of 3.075% over 3 month SOFR on November 15, 2030.\n\nDuring 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.\n\nAll of the trust preferred debt is currently callable.\n\nInterest expense on borrowings for the years ended December 31, 2025, 2024, and 2023 was as follows (in thousands):\n\n For the Year Ended December 31,\n\n 202520242023\n\nFHLB advances\n$44,997 $35,686 $46,000 \n\nSecurities sold under agreements to repurchase with customers1,711 1,893 931 \n\nOther borrowings19,343 28,426 19,294 \n\nTotal interest expense on borrowings$66,051 $66,005 $66,225 \n\nPledged assets\n\nThe 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):\n\nLoansDebt and Equity SecuritiesTotal\n\nDecember 31, 2025\n\nFHLB and FRB\n$7,923,979 $1,367,469 $9,291,448 \n\nRepurchase agreements— 78,422 78,422 \n\nTotal pledged assets$7,923,979 $1,445,891 $9,369,870 \n\nDecember 31, 2024\n\nFHLB and FRB\n$7,427,247 $984,515 $8,411,762 \n\nRepurchase agreements— 85,529 85,529 \n\nTotal pledged assets$7,427,247 $1,070,044 $8,497,291 \n\nThe 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.\n\n105\n\nNote 10. Income Taxes\n\nThe provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands):\n\n For the Year Ended December 31,\n\n 202520242023\n\nCurrent\n\nFederal$13,599 $23,315 $20,894 \n\nState4,881 7,288 8,655 \n\nTotal current18,480 30,603 29,549 \n\nDeferred\n\nFederal2,748 214 4,250 \n\nState261 (551)(1,099)\n\nTotal deferred3,009 (337)3,151 \n\nTotal provision for income taxes$21,489 $30,266 $32,700 \n\nIncluded in other comprehensive income was the income tax impact attributable to the unrealized gain/loss on debt securities, accretion of unrealized losses on debt securities reclassified to held-to-maturity, unrealized loss on derivative hedges and the related reclassification adjustments included in net income. These items resulted in a tax expense of $4.5 million, $1.8 million and $4.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nIncome 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):\n\n For the Year Ended December 31,\n\n 202520242023\n\nAmountPercentAmountPercentAmountPercent\n\nIncome before provision for income taxes$92,516 $130,656 $136,765 \n\nFederal income tax expense, at statutory rate19,428 21.0 %27,438 21.0 %28,721 21.0 %\n\nIncrease (decrease) in federal income tax expense resulting from:\n\nState income taxes, net of federal benefit (1)\n3,941 4.3 5,518 4.2 5,979 4.3 \n\nNontaxable or nondeductible items:\n\nEarnings on BOLI\n(1,628)(1.8)(1,660)(1.3)(1,109)(0.8)\n\nTax exempt interest(761)(0.8)(547)(0.4)(606)(0.4)\n\nMerger related expenses620 0.7 — — — — \n\nStock compensation68 0.1 391 0.3 (298)(0.2)\n\nDividends received deduction(241)(0.3)(322)(0.2)(368)(0.3)\n\nTax credits\n\nAlternative minimum tax write-off— — 1,196 0.9 — — \n\nResearch and development and other credits (610)(0.7)(735)(0.5)(557)(0.4)\n\nOther items, net672 0.7 (1,013)(0.8)938 0.7 \n\nTotal provision for income taxes, at effective tax rate$21,489 23.2 %$30,266 23.2 %$32,700 23.9 %\n\n(1) State taxes in New Jersey made up the majority (greater than 50%) of the tax effect in this category.\n\n106\n\nThe 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.\n\nIncome taxes paid for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands):\n\n For the Year Ended December 31,\n\n 202520242023\n\nFederal$16,149 $27,069 $22,200 \n\nState and local\n\nNew Jersey2,614 3,242 2,658 \n\nNew York1,020 2,499 1,995 \n\nNew York City400 576 1,773 \n\nOther506 400 705 \n\nTotal$20,689 $33,786 $29,331 \n\nThe 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):\n\n December 31,\n\n 20252024\n\nDeferred tax assets:\n\nAllowance for credit losses on loans and debt securities HTM\n$21,529 $18,981 \n\nOther reserves1,787 2,790 \n\nIncentive compensation5,620 4,345 \n\nDeferred compensation326 338 \n\nStock plans1,998 2,239 \n\nUnrealized losses on assets held-for-sale225 347 \n\nUnrealized losses on AFS securities897 5,346 \n\nNet operating loss carryforwards related to acquisition17,030 19,053 \n\nSection 174 capitalized costs4,967 5,457 \n\nOther, net729 866 \n\nTotal gross deferred tax assets55,108 59,762 \n\nDeferred tax liabilities:\n\nUnrealized gain on equity securities(4,729)(4,568)\n\nPremises and equipment(2,328)(3,104)\n\nDeferred loan and commitment costs, net(5,740)(2,814)\n\nPurchase accounting related adjustments(1,553)(1,698)\n\nInvestments, discount accretion(126)(185)\n\nOther, net(1,058)(402)\n\nTotal gross deferred tax liabilities(15,534)(12,771)\n\nNet deferred tax assets$39,574 $46,991 \n\nThe 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, respectively. These 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.\n\n107\n\nThese 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.\n\nAt 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.\n\nRetained 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.\n\nThe 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.\n\nThe 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.\n\nThe 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.\n\nThere were no unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023.\n\nNote 11. Employee Stock Ownership Plan\n\nThe 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.\n\nOver 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”).\n\nThe 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.\n\nThe 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.\n\nThe Bank’s obligation to make such contributions is reduced 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.\n\n108\n\nFor 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.\n\nNote 12. Long-Term Incentive Plans\n\nThe 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.\n\nOverview of Incentive Plans\n\nThe 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.\n\nThe 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.\n\nAuthorized AwardsAuthorized but Not Issued\n\nStock OptionsorStock AwardsStock OptionsorStock Awards\n\n2020 Plan6,950,000 2,780,000 2,165,868 866,347 \n\nStock Awards\n\nThe 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.\n\nThe 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.\n\nCertain 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:\n\n202520242023\n\nRisk-free interest rate3.99 %4.47 %4.56 %\n\nExpected performance period2.8 years2.8 years2.8 years\n\nExpected volatility37.12 %34.00 %35.80 %\n\n109\n\nThe 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.\n\nA 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:\n\n 202520242023\n\n Number\nof\nSharesWeighted\nAverage\nGrant Date\nFair ValueNumber\nof\nSharesWeighted\nAverage\nGrant Date\nFair ValueNumber\nof\nSharesWeighted\nAverage\nGrant Date\nFair Value\n\nOutstanding at beginning of year:1,071,535 $18.29 814,489 $21.73 835,340 $21.84 \n\nGranted345,644 17.32 554,081 15.35 322,425 22.14 \n\nVested(240,457)20.11 (200,254)22.41 (228,370)22.55 \n\nForfeited(118,159)20.37 (96,781)21.93 (114,906)22.07 \n\nOutstanding at end of year1,058,563 $17.32 1,071,535 $18.29 814,489 $21.73 \n\nStock Options\n\nThe 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.\n\nThe Company has not granted stock options since 2020.\n\nA summary of option activity for the years ended December 31, 2025, 2024 and 2023 is as follows:\n\n 202520242023\n\n Number\nof\nSharesWeighted\nAverage\nExercise\nPriceNumber\nof\nSharesWeighted\nAverage\nExercise\nPriceNumber\nof\nSharesWeighted\nAverage\nExercise\nPrice\n\nOutstanding at beginning of year1,629,602 $22.85 1,969,439 $22.42 2,210,684 $21.66 \n\nExercised(41,750)17.19 (33,125)17.24 (195,684)14.59 \n\nForfeited— — (15,358)20.44 (15,358)20.44 \n\nExpired(101,682)17.38 (291,354)20.74 (30,203)18.32 \n\nOutstanding at end of year1,486,170 $23.38 1,629,602 $22.85 1,969,439 $22.42 \n\nOptions exercisable1,486,170 $23.38 1,528,067 $23.01 1,663,506 $22.58 \n\nThe 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.\n\nPhantom Stock Units\n\nIn 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.\n\n110\n\nCompensation Expense\n\nThe compensation expense for stock awards, stock options and phantom stock units were as follows (in thousands):\n\nFor the Year Ended December 31,\n\n202520242023\n\nStock awards$4,818 $5,724 $5,154 \n\nStock options49 360 700 \n\nPhantom stock units2,518 1,707 1,092 \n\nTotal$7,385 $7,791 $6,946 \n\nAt 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.\n\nNote 13. Commitments, Contingencies, and Concentrations of Credit Risk\n\nThe 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.\n\nAt December 31, 2025, the following commitments and contingent liabilities existed which are not reflected in the accompanying consolidated financial statements (in thousands):\n\nDecember 31, 2025\n\nUnused consumer and residential construction loan lines of credit (primarily floating-rate)$278,830 \n\nUnused commercial and commercial construction loan lines of credit (primarily floating-rate)1,602,901 \n\nOther commitments to extend credit (1):\n\nFixed-rate133,617 \n\nAdjustable-rate 1,100 \n\nFloating-rate339,342 \n\n(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.\n\nThe 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.\n\nAt December 31, 2025, the Company had $6.4 million of unfunded capital commitments related to investment funds.\n\nThe 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.\n\nThese 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.\n\nAt 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.\n\nThe 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\n\n111\n\nrepay 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.\n\nThe 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.\n\nThe 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.\n\nNote 14. Earnings Per Share\n\nThe following reconciles shares outstanding for basic and diluted earnings per share for the years ended December 31, 2025, 2024 and 2023 (in thousands):\n\nDecember 31,\n\n202520242023\n\nWeighted average shares outstanding57,833 58,704 59,399 \n\nLess: Unallocated ESOP shares\n(99)(164)(257)\n\nUnallocated incentive award shares(315)(244)(194)\n\nAverage basic shares outstanding57,419 58,296 58,948 \n\nAdd: Effect of dilutive securities:\n\nIncentive awards6 1 9 \n\nAverage diluted shares outstanding57,425 58,297 58,957 \n\nFor 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.\n\nNote 15. Fair Value Measurements\n\nFair 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.\n\nThe 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:\n\nLevel 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.\n\n112\n\nLevel 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.\n\nLevel 3 Inputs – Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities.\n\nAssets and Liabilities Measured at Fair Value\n\nA 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).\n\nDebt Securities Available-for-Sale\n\nDebt 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.\n\nEquity Investments\n\nEquity 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.\n\nInterest Rate Derivatives\n\nThe 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.\n\nOther Real Estate Owned and Loans Individually Measured for Impairment\n\nOther 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.\n\nCredit Default Swap\n\nThe 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.\n\n113\n\nThe 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):\n\n  Fair Value Measurements at Reporting Date Using:\n\nTotal Fair\nValueLevel 1\nInputsLevel 2\nInputsLevel 3\nInputs\n\nDecember 31, 2025\n\nItems measured on a recurring basis:\n\nDebt securities available-for-sale$1,231,827 $43,385 $1,188,442 $— \n\nEquity investments45,207 — 45,207 — \n\nInterest rate derivative asset57,823 — 57,823 — \n\nInterest rate derivative liability(53,835)— (53,835)— \n\nCredit default swap (234)— — (234)\n\nItems measured on a non-recurring basis:\n\nEquity investments (1) (2)\n46,675 — — 40,163 \n\nOther real estate owned10,266 — — 10,266 \n\nLoans measured for impairment based on the fair value of the underlying collateral (3)\n24,470 — — 24,470 \n\nDecember 31, 2024\n\nItems measured on a recurring basis:\n\nDebt securities available-for-sale$827,500 $49,466 $778,034 $— \n\nEquity investments40,447 — 40,447 — \n\nInterest rate derivative asset91,352 — 91,352 — \n\nInterest rate derivative liability(91,483)— (91,483)— \n\nItems measured on a non-recurring basis:\n\nEquity investments (1) (2)\n43,657 — — 39,676 \n\nOther real estate owned1,811 — — 1,811 \n\nLoans measured for impairment based on the fair value of the underlying collateral (3)\n25,148 — — 25,148 \n\n(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.\n\n(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.\n\n(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.\n\nThe 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.\n\nThe 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.\n\nAssets and Liabilities Disclosed at Fair Value\n\nA 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.\n\nCash and Due from Banks\n\nFor cash and due from banks, the carrying amount approximates fair value.\n\n114\n\nDebt Securities Held-to-Maturity\n\nDebt 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.\n\nManagement’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.\n\nRestricted Equity Investments\n\nThe 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.\n\nLoans Receivable and Loans Held-for-Sale\n\nFair 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.\n\nFair 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.\n\nLoans 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.\n\nDeposits Other than Time Deposits\n\nThe 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.\n\nTime Deposits\n\nThe 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.\n\nFHLB Advances and Other Borrowings\n\nFair value estimates are based on discounting contractual cash flows using rates which approximate the rates offered for borrowings of similar remaining maturities.\n\nSecurities Sold Under Agreements to Repurchase with Customers\n\nFair value approximates the carrying amount as these borrowings are payable on demand and the interest rate adjusts monthly.\n\n115\n\nThe 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):\n\n Fair Value Measurements at Reporting Date Using\n\nBook\nValueLevel 1\nInputsLevel 2\nInputsLevel 3\nInputs\n\nDecember 31, 2025\n\nFinancial Assets:\n\nCash and due from banks$135,130 $135,130 $— $— \n\nDebt securities held-to-maturity\n881,568 — 825,790 — \n\nRestricted equity investments\n129,329 — — 129,329 \n\nLoans receivable, net and loans held-for-sale\n10,976,434 — — 10,665,389 \n\nFinancial Liabilities:\n\nDeposits other than time deposits (1)\n8,495,555 — 8,495,555 — \n\nTime deposits\n2,468,850 — 2,455,199 — \n\nFHLB advances and other borrowings\n1,652,412 — 1,662,638 — \n\nSecurities sold under agreements to repurchase with customers54,434 54,434 — — \n\nDecember 31, 2024\n\nFinancial Assets:\n\nCash and due from banks\n$123,615 $123,615 $— $— \n\nDebt securities held-to-maturity\n1,045,875 — 952,917 — \n\nRestricted equity investments\n108,634 — — 108,634 \n\nLoans receivable, net and loans held-for-sale\n10,076,640 — — 9,551,156 \n\nFinancial Liabilities:\n\nDeposits other than time deposits (1)\n7,985,370 — 7,985,370 — \n\nTime deposits\n2,080,972 — 2,074,698 — \n\nFHLB advances and other borrowings\n1,270,157 — 1,264,260 — \n\nSecurities sold under agreements to repurchase with customers60,567 60,567 — — \n\n(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.\n\nLimitations\n\nFair 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.\n\nFair 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.\n\n116\n\nNote 16. Derivatives and Hedging Activities\n\nThe 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.\n\nCustomer Derivatives – Interest Rate Swaps and Cap Contracts\n\nDerivatives Not Designated as Hedging Instruments\n\nInterest Rate Swaps and Cap Contracts\n\nThe 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.\n\nThese 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.\n\nCredit Default Swap\n\nIn 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.\n\nDerivatives Designated as Hedging Instruments\n\nInterest Rate Swap Contracts - Fair Value Hedge\n\nDuring 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.\n\n117\n\nFor 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.\n\nThe following table presents the amortized cost and cumulative basis adjustment for closed portfolios of securities used to designate fair value hedging relationships (in thousands):\n\nAs of December 31, 2025\n\nAFS securities:\n\nAmortized cost (excluding fair value hedge basis adjustment)$682,878 \n\nFair value hedge basis adjustment(4,038)\n\nThe 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):\n\nLocation of Gain/(Loss) Recognized in Income For the Year Ended December 31, 2025\n\nAFS securities:\n\nGain recognized on derivativesInterest income - debt securities$4,030 \n\nLoss recognized on hedged itemsInterest income - debt securities(4,038)\n\nNet loss recognized on fair value hedgesInterest income - debt securities$(8)\n\nInterest Rate Swap Contract - Cash Flow Hedge\n\nDuring 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.\n\nThe 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):\n\nFor the Year Ended December 31,\n\n202520242023\n\nAOCL balance at beginning of period, net of tax\n$(87)$(36)$(25)\n\nUnrealized losses recognized in OCI(108)(956)(808)\n\nLosses reclassified from AOCL into interest income\n195 905 797 \n\nAOCL balance at end of period, net of tax\n$— $(87)$(36)\n\nThe cash flow hedge matures on January 1, 2026, and there will be no additional reclassifications into interest income.\n\n118\n\nDerivatives Not Designated as Hedging Instruments and Designated as Hedging Instruments\n\nThe 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):\n\nNotionalFair Value\n\nOther assetsOther liabilities\n\nAs of December 31, 2025\n\nDerivatives Not Designated as Hedging Instruments\n\nInterest rate swaps and cap contracts$1,537,760 $53,768 $53,809 \n\nCredit default swap75,802 — 234 \n\nDerivatives Designated as Hedging Instruments\n\nInterest rate swap contract - cash flow hedge100,000 — — \n\nInterest rate swap contracts - fair value hedge678,921 4,055 26 \n\nTotal Derivatives$2,392,483 $57,823 $54,069 \n\nAs of December 31, 2024\n\nDerivatives Not Designated as Hedging Instruments\n\nInterest rate swaps and cap contracts$1,468,022 $91,352 $91,368 \n\nDerivatives Designated as Cash Flow Hedge\n\nInterest rate swaps contract100,000 — 115 \n\nTotal Derivatives$1,568,022 $91,352 $91,483 \n\nCredit Risk-Related Mitigating Features\n\nThe 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.\n\nThe 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.\n\nThe 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.\n\n119\n\nNote 17. Leases\n\nA 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.\n\nThe following table represents the classification of the Company’s ROU assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nLease ROU Assets\nClassification\n\nOperating lease ROU assets\nOther assets$17,596 $15,452 \n\nFinance lease ROU asset\nPremises and equipment, net838 1,071 \n\nTotal lease ROU assets\n$18,434 $16,523 \n\nLease Liabilities\n\nOperating lease liabilities (1)\nOther liabilities$19,037 $17,114 \n\nFinance lease liabilityOther borrowings1,143 1,421 \n\nTotal lease liabilities$20,180 $18,535 \n\n(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.\n\nThe following table represents the weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases:\n\nDecember 31, 2025December 31, 2024\n\nWeighted-Average Remaining Lease Term\n\nOperating leases5.82 years5.84 years\n\nFinance lease3.59 years4.59 years\n\nWeighted-Average Discount Rate\n\nOperating leases3.57 %3.08 %\n\nFinance lease5.63 5.63 \n\nThe following table represents lease expenses and other lease information (in thousands):\n\nFor the Year Ended December 31,\n\n202520242023\n\nLease Expense\n\nOperating lease expense$5,016 $4,586 $4,634 \n\nFinance lease expense:\n\nAmortization of ROU assets\n233 233 228 \n\nInterest on lease liabilities (1)\n71 86 101 \n\nTotal$5,320 $4,905 $4,963 \n\nOther Information\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows from operating leases$5,242 $4,773 $4,571 \n\nOperating cash flows from finance leases71 86 101 \n\nFinancing cash flows from finance leases279 264 249 \n\n(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.\n\n120\n\nFuture minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):\n\nFinance LeaseOperating Leases\n\nFor the Year Ending December 31,\n\n2026$350 $5,253 \n\n2027350 4,154 \n\n2028350 2,977 \n\n2029209 2,701 \n\n2030— 2,146 \n\nThereafter— 4,038 \n\nTotal1,259 21,269 \n\nLess: Imputed interest(116)(2,232)\n\nTotal lease liabilities$1,143 $19,037 \n\nNote 18. Variable Interest Entity\n\nOn October 1, 2025, the Company disposed its controlling interest in Trident. Prior to the disposal, the Company accounted for Trident as a VIE under ASC 810, Consolidation, for which the Company was considered the primary beneficiary (i.e. the party that has a controlling financial interest). In accordance with ASC 810, Consolidation, the Company consolidated Trident’s assets and liabilities prior to the disposal.\n\nThe summarized financial information for the Company’s consolidated VIE consisted of the following (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nCash and cash equivalents$— $21,642 \n\nOther assets— 457 \n\nTotal assets— 22,099 \n\nOther liabilities— 19,333 \n\nNet assets$— $2,766 \n\n121\n\nNote 19. Parent-Only Financial Information\n\nThe 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.\n\nCondensed Statements of Financial Condition\n\n(in thousands)\n\n December 31,\n\n 20252024\n\nAssets:\n\nCash and due from banks\n$13,275 $13,214 \n\nAdvances to Bank74,629 98,321 \n\nEquity securities84,619 77,327 \n\nESOP loan receivable\n1,461 2,871 \n\nInvestment in subsidiaries\n1,744,188 1,704,037 \n\nGoodwill— 5,827 \n\nOther assets\n4,165 1,817 \n\nTotal assets$1,922,337 $1,903,414 \n\nLiabilities and Stockholders’ Equity:\n\nBorrowings\n$254,094 $196,124 \n\nOther liabilities5,693 4,533 \n\nTotal liabilities259,787 200,657 \n\nOceanFirst Financial Corp. stockholders’ equity1,662,550 1,701,650 \n\nNon-controlling interest— 1,107 \n\n Total stockholders’ equity1,662,550 1,702,757 \n\nTotal liabilities and stockholders’ equity\n$1,922,337 $1,903,414 \n\nCondensed Statements of Operations\n\n(in thousands)\n\n For the Year Ended December 31,\n\n 202520242023\n\nDividend income – subsidiaries$62,398 $86,350 $97,043 \n\nInterest and dividend income – debt and equity securities2,346 3,319 2,981 \n\nInterest income – advances to subsidiary Bank3,043 4,423 2,182 \n\nInterest income – ESOP loan receivable\n93 138 183 \n\nNet gain (loss) on equity investments916 4,225 (3,732)\n\nTotal income\n68,796 98,455 98,657 \n\nInterest expense – borrowings\n16,639 13,840 13,569 \n\nOperating expenses\n8,245 4,875 4,050 \n\nIncome before income taxes and undistributed earnings of subsidiaries43,912 79,740 81,038 \n\nBenefit for income taxes4,202 1,226 3,807 \n\nIncome before undistributed earnings of subsidiaries48,114 80,966 84,845 \n\nUndistributed earnings of subsidiaries22,913 19,424 19,220 \n\nNet income71,027 100,390 104,065 \n\nNet income attributable to non-controlling interest49 325 36 \n\nNet income attributable to OceanFirst Financial Corp.$70,978 $100,065 $104,029 \n\n122\n\nCondensed Statements of Cash Flows\n\n(in thousands)\n\n For the Year Ended December 31,\n\n 202520242023\n\nCash flows from operating activities:\n\nNet income$71,027 $100,390 $104,065 \n\nDecrease (increase) in advances to subsidiary Bank23,692 (31,032)(34,449)\n\nUndistributed earnings of subsidiary Bank(22,913)(19,424)(19,220)\n\nNet (gain) loss on equity investments(916)(4,225)3,732 \n\nNet premium amortization in excess of discount accretion on securities420 584 981 \n\nAmortization of deferred costs on borrowings338 626 598 \n\nNet amortization of purchase accounting adjustments751 727 704 \n\nNet loss on disposal of controlling interest in Trident4,338 — — \n\nChange in other assets and other liabilities(763)4,199 (3,995)\n\nNet cash provided by operating activities75,974 51,845 52,416 \n\nCash flows from investing activities:\n\nProceeds from sales of equity investments365 22,783 4,822 \n\nPurchase of equity investments(7,161)(3,082)(7,661)\n\nRepayments on ESOP loan receivable\n1,410 1,370 2,510 \n\nProceeds from disposal of controlling interest in Trident2,750 — — \n\nNet cash (used in) provided by investing activities(2,636)21,071 (329)\n\nCash flows from financing activities:\n\nNet proceeds from issuance of subordinated notes181,882 — — \n\nRepayments of other borrowings(125,000)— — \n\nDividends paid(48,247)(50,880)(51,274)\n\nPurchase of treasury stock(24,945)(21,476)— \n\nRedemption of preferred stock (57,369)— — \n\nExercise of stock options717 571 702 \n\nDistributions to non-controlling interest(315)— (55)\n\nNet cash used in financing activities(73,277)(71,785)(50,627)\n\nNet increase in cash and due from banks61 1,131 1,460 \n\nCash and due from banks at beginning of year13,214 12,083 10,623 \n\nCash and due from banks at end of year$13,275 $13,214 $12,083 \n\n123"}