OCEANFIRST FINANCIAL CORP (OCFC)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.

(2) Ratios are annualized.

(3) Ratios are based on net income available to common stockholders.

(4) Performance ratios for the quarter ended March 31, 2026 included a net expense related to a net loss on equity investments, restructuring charges, and merger related expenses of $4.6 million, or $3.8 million, net of tax benefit. Performance ratios for the quarter ended December 31, 2025 included a net expense related to net gain on equity investments, restructuring charges, credit risk transfer execution expense and merger related expenses of $12.7 million, or $10.4 million, net of tax benefit. Performance ratios for the quarter ended March 31, 2025 included a net benefit related to a net gain on equity investments of $205,000, or $156,000, net of tax expense.

(5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(6) Net interest margin represents net interest income as a percentage of average interest-earning assets.

(7) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.

(8) Total loans receivable excludes loans held-for-sale.

(9) Non-performing assets consist of non-performing loans and real estate acquired through foreclosure. Non-performing loans and assets generally consist of all loans 90 days or more past due and other loans in the process of foreclosure. It is the Company’s policy to cease accruing interest on all such loans and to reverse previously accrued interest.

(10) Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $3.8 million, $4.0 million, and $5.6 million at March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

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Table of Contents

Summary

OceanFirst Financial Corp. is the holding company for the Bank, a regional bank serving business and retail customers throughout New Jersey and the major metropolitan areas from Massachusetts through Virginia. The term “Company” refers to OceanFirst Financial Corp., the Bank and all their subsidiaries on a consolidated basis. The Company’s results of operations are primarily dependent on net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and the interest expense on its interest-bearing liabilities, such as deposits and borrowings. The Company also generates non-interest income such as income from bankcard services, trust and asset management products and services, deposit account services, sales of loans and investments, bank owned life insurance and commercial loan swap income. The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses. The Company’s results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies, including the imposition of tariffs and retaliatory responses, and actions of regulatory agencies.

Key developments relating to the Company’s financial results and corporate activities for the quarter ended March 31, 2026, as compared to the linked quarter, were as follows:

•Margin and Net Interest Expansion: Net interest margin increased six basis points to 2.93%, from 2.87%, and net interest income increased by $1.2 million, to $96.4 million.

•Sustained Growth: Total loans increased $91.9 million, a 3% annualized growth rate, and included commercial and industrial loan growth of $105.1 million, a 19% annualized growth rate.

•Controlled Expenses: Non-interest expense decreased by 13%, or $10.7 million, to $73.4 million.

Net income available to common stockholders for the quarter ended March 31, 2026 was $20.5 million, or $0.36 per diluted share, as compared to $20.5 million, or $0.35 per diluted share, for the corresponding prior year period. Dividends paid to preferred stockholders were $1.0 million for the quarter ended March 31, 2025. No such dividends were paid during the three months ended March 31, 2026 as the preferred stock was redeemed in the second quarter of 2025.

On April 15, 2026, the Company’s Board declared a quarterly cash dividend on common stock of $0.20 per share. The dividend, related to the quarter ended March 31, 2026, will be paid on May 8, 2026 to common stockholders of record on April 27, 2026.

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Table of Contents

Analysis of Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the three months ended March 31, 2026, interest income included net loan fees of $1.1 million, as compared to $1.4 million for the same prior year period.

The following tables set forth certain information relating to the Company for the three months ended March 31, 2026 and 2025. The yields and costs, which are annualized, are derived by dividing the income or expense by the average balance of the related assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances. The yields and costs include certain fees and costs which are considered adjustments to yields.

(1)Average yields a

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company conducts business primarily through its ownership of the Bank, which, at December 31, 2025, primarily operated out of its headquarters located in Toms River, New Jersey and its administrative office located in Red Bank, New Jersey. The Bank also conducts its business at 41 branch offices and various deposit production facilities located throughout central and southern New Jersey and major metropolitan areas of New York City and Philadelphia. The Bank also operates commercial loan production offices in New Jersey, New York City, the greater Philadelphia area, Pittsburgh, Washington D.C., Baltimore, Boston and Northern Virginia.

The Company’s results of operations are primarily dependent on net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and the interest expense on its interest-bearing liabilities, such as deposits and borrowings. The Company also generates non-interest income such as income from bankcard services, trust and asset management products and services, deposit account services, sales of loans and investments, bank owned life insurance and commercial loan swap income. The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses. The Company’s results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies, including the imposition of tariffs and retaliatory responses, and actions of regulatory agencies.

Strategy

The Company operates as a full-service regional community bank delivering comprehensive financial products and services, which includes commercial financing, deposit services, and wealth management products and services, throughout New Jersey and in the major metropolitan areas from Massachusetts through Virginia. The Company competes with larger, out-of-market financial service providers through its entrenched presence in local markets, digital delivery channels, and agility to provide superior service at speed. The Company also competes with smaller in-market financial service providers by offering a broad array of products and services as well as the ability to extend larger credits.

The Company’s strategy has been to grow profitability while limiting exposure to credit, interest rate, and operational risks. To accomplish these objectives, the Company has sought to: (1) diversify and strengthen its deposit base through product offerings appealing to a broadened customer base; (2) grow the commercial banking business, with a particular focus on strengthening commercial and industrial banking; and (3) improve operating efficiency through the ongoing investment in information technology and infrastructure.

On October 15, 2025, the Company outsourced its residential loan originations, which also included home equity loans and lines and other consumer, to a national mortgage banking company. The Company continued to process outstanding commitments to originate residential and consumer loans through December 2025. As of December 31, 2025, the Company had $9.5 million of residential loans and no consumer loans in the pipeline, which represents the remaining commitments expected to close in 2026.

The Company focuses on prudent growth to create value for stockholders, which may include opportunistic acquisitions. Refer to Item 1 - Recent Developments for further discussion on the pending merger with Flushing.

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The Company has continued to maintain and strengthen its liquidity and capital position, while servicing its customers and communities. Refer to ‘Liquidity and Capital Resources’ for further discussion.

Diversify and Strengthen Deposit Base

The Company continues to focus on deposit growth through a series of initiatives intended to both grow deposits and diversify sources of liquidity. The Company seeks to increase deposits in its primary market area by improving market penetration, expanding deposit gathering initiatives and investing in deposit focused talent acquisition. In 2025, the Company added Premier Banking teams for relationship driven, team based approach to service resulting in superior high touch client experience. As a result, the Company is focused on growing commercial deposit relationships through this stable low cost deposit vertical as another funding lever to support future loan growth.

The Company has benefited from and remains focused on efforts to attract business deposits in conjunction with its commercial lending operations and from an expanded mix of retail products and services. Ongoing product development and design to deepen market penetration will allow the Company to rely on competencies in commercial lending and the retail branch network to drive growth and diversification of deposits. The Company continues to invest in the overall customer experience with the Company’s customer satisfaction performance and digital capabilities on par with national banks and fintech companies.

Commercial Banking

The Company continues to distinguish itself from the mega-bank competition with access to responsive, local decision-makers and from the smaller bank competition that are unable to deliver the same depth of products, services, and technology. The Company supports commercial business clients of varying sizes and complexity through the extension of credit and cash management services through its advisory relationship management model. The Company has had success in developing new client relationships in the Company’s focused expansion markets, which include Boston, Northern Virginia and Baltimore. Expanding the Company’s geographies and diversifying the loan book provides a hedge on risks deriving from concentration in a single market.

While these growth markets are important to the Company’s strategy, the Company has continued efforts to keep the community bank feel for customers, employees, and stakeholders, which has been a focal point for longstanding stable funding, brand reputation, and community development efforts in the Company’s legacy markets.

The Company’s early expansion efforts were dependent on CRE lending; however, its path forward as a regional bank includes a transition away from CRE dependence and a focus on future growth predominately around the C&I portfolio. The Company has continued to make significant efforts to recruit new relationship managers that specialize in clients operating in deposit heavy industries. The Company anticipates that the acquisition of these customers will continue to help drive quality funding through deeper deposit relationships. Additionally, the Company continues to improve its treasury management capabilities by enhancing services through expanded product offerings and thoughtfully evaluating opportunities to further bolster talent and technology to better serve the Company’s customers.

At December 31, 2025, commercial loans (which includes multi-family and commercial real estate loans, commercial construction loans, and commercial and industrial loans) represented 69.2% of the Company’s total loans, as compared to 67.4% at December 31, 2024, of which commercial and industrial loans represented 20.1% of total loans as compared to 15.3% at December 31, 2024.

Commercial loan products entail a higher degree of credit risk than other real estate lending activity. As a result, management continues to employ a well-defined credit policy focusing on quality underwriting and close oversight and Board monitoring. See Risk Factors – Risks Related to Lending Activities – The Company’s emphasis on commercial lending may expose the Company to increased lending risks.

Operating Efficiency

The Company relies on technology and the resources that support its operations to provide a broad suite of financial services and experience to its customers and employees, to differentiate the Company in its diverse markets, and to drive operational efficiencies that yield performance with strong customer services. The Company’s investment in technology, including modern data model incorporating artificial intelligence into processing efforts, lays a foundation for future growth, scale, and operational efficiency while maintaining a secure and robust cybersecurity framework. Focus areas include digital-direct customer engagement, efficient customer servicing, supporting safe banking operations and strategic technology change, and competitively delivering new lending and customer self-service capabilities.

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Capital Management

The Company actively manages its capital position to ensure adequate coverage and improve return on stockholders’ equity. The Company conducts capital stress testing, which includes evaluating the effects of various scenarios on capital, as one means of evaluating capital adequacy. The results of stress testing are considered in the capital planning process and strategy development.

The Company also analyzes the need to raise additional capital in the future, through issuance of debt or equity, to meet its commitments and business needs. During 2025, the Company redeemed in full its preferred stock for $55.5 million and issued $185.0 million of subordinated notes in October 2025 at an initial rate of 6.375% and stated maturity of November 15, 2035. The proceeds were primarily used to redeem the Company’s subordinated notes due May 15, 2030, with a principal amount of $125.0 million, in November 2025. Further, in December 2025, the Bank executed a credit risk transfer consisting of 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 optimize regulatory capital levels and reduce credit risk.

Over the past five years, the Company has implemented or announced two stock repurchase programs. On June 25, 2021, the Company announced the authorization to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. On July 16, 2025, the Company announced its Board authorized a 2025 Stock Repurchase Program to repurchase up to an additional 3.0 million shares. For the year ended December 31, 2025, the Company repurchased 1,433,537 shares of its common stock. Of these repurchased shares, 108,621 shares were repurchased outside of the Company’s stock repurchase program. The Company repurchased these shares from employees that elected to sell shares to cover their withholding tax obligations on vested stock awards and options. At December 31, 2025, the Company remains authorized to repurchase 3,226,284 shares and will prudently evaluate repurchase opportunities while maintaining existing capital levels.

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Selected Financial Data

The selected consolidated financial and other data of the Company set forth below is derived in part from, and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto presented elsewhere in this Annual Report.

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(continued)

(1)With the exception of end of year ratios, all ratios are based on average daily balances.

(2)Performance ratios for 2025 included a net expense related to net gain on equity investments, restructuring charges, loss on redemption of preferred stock, credit risk transfer execution expense, FDIC special assessment release and merger related expenses of $15.9 million, or $12.9 million, net of tax benefit. Performance ratios for 2024 included a net benefit related to Spring Garden opening provision for credit losses, a net gain on equity investments, a net gain on sale of trust business, FDIC special assessment and merger related expenses of $3.2 million, or $2.5 million, net of tax expense. Performance ratios for 2023 included a net expense related to merger related expenses, net branch consolidation expense, FDIC special assessment, net loss on sale of investments and net gain on equity investments of $6.2 million, or $4.7 million, net of tax benefit.

(3)Ratios for each period are based on net income available to common stockholders.

(4)Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(5)Net interest margin represents net interest income as a percentage of average interest-earning assets.

(6)Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.

(7)Total loans receivable excludes loans held-for-sale.

(8)The years ended December 31, 2023 and 2024 include the addition and subsequent resolution of a single commercial relationship exposure of $7.2 million, which had life-to-date charge-offs of $10.0 million.

(9)Non-performing assets consist of non-performing loans and real estate acquired through foreclosure. Non-performing loans and assets generally consist of all loans 90 days or more past due and other loans in the process of foreclosure. It is the Company’s policy to cease accruing interest on all such loans and to reverse previously accrued interest.

(10)Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $4.0 million, $6.0 million, and $7.5 million at December 31, 2025, 2024, and 2023, respectively.

(11)During 2024, the Company sold a portion of its trust business resulting in gain on sale of $2.6 million.

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Summary

Highlights of the Company’s financial results for the year ended December 31, 2025 as compared to December 31, 2024 were as follows:

Total assets increased by $1.14 billion to $14.56 billion, from $13.42 billion, primarily due to increases in loans and securities. Total loans increased by $913.9 million to $11.03 billion, from $10.12 billion, primarily due to an increase of $797.1 million in the total commercial portfolio. Debt securities available-for-sale increased by $404.3 million to $1.23 billion, from $827.5 million, primarily due to new purchases. Debt securities held-to-maturity decreased by $164.3 million to $881.6 million, from $1.05 billion, primarily due to principal repayments.

Total liabilities increased by $1.18 billion to $12.90 billion, from $11.72 billion primarily related to an increase in deposits and FHLB advances. Deposits increased by $898.1 million to $10.96 billion, from $10.07 billion, primarily due to increases in time deposits of $387.9 million and interest bearing deposits of $353.9 million. FHLB advances increased by $324.6 million to $1.40 billion, from $1.07 billion as a result of lower-cost funding availability.

Net income available to common stockholders decreased to $67.1 million, or $1.17 per diluted share, as compared to $96.0 million, or $1.65 per diluted share. Net income available to common stockholders for the year ended December 31, 2025 included a net gain on equity investments of $916,000, restructuring charges of $11.5 million, merger related expenses of $4.3 million, credit risk transfer execution expense of $1.3 million, a $210,000 release of FDIC special assessment fees, and a net loss on redemption of preferred stock of $1.8 million. These items decreased net income in the current year by $14.8 million, net of tax. The above items decreased diluted earnings per share by $0.26.

Net income available to common stockholders for the year ended December 31, 2024 included an opening provision for credit losses related to the acquisition of Spring Garden of $1.4 million, net gain on equity investments of $4.2 million, net gain on sale of trust business of $2.6 million, merger related expenses of $1.8 million, and a special assessment charge of $418,000 related to the FDIC’s final rule to recover the loss on the DIF. These items increased net income in the prior year by $2.5 million, net of tax, and diluted earnings per share by $0.05.

The Company's common equity tier 1 capital ratio was 10.72% at December 31, 2025. Additionally, the Company remains well-capitalized with a stockholders’ equity to total assets ratio of 11.42% at December 31, 2025.

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Analysis of Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the years ended December 31, 2025, 2024, and 2023, interest income included net loan fees of $5.7 million, $3.3 million, and $2.9 million, respectively.

The following table sets forth certain information relating to the Company for each of the years ended December 31, 2025, 2024 and 2023. The yields and costs, which are annualized, are derived by dividing the income or expense by the average balance of the related assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances. The yields and costs include certain fees and costs which are considered adjustments to yields.

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(1)Amounts represent debt and equity securities, including FHLB and FRB stock, and are recorded at average amortized cost, net of allowance for securities credit losses.

(2)Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held-for-sale and non-performing loans.

(3)Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(4)Net interest margin represents net interest income divided by average interest-earning assets.

Rate Volume Analysis

The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company’s interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

(1)Amounts represent debt and equity securities, including FHLB and FRB stock, and are recorded at average amortized cost, net of allowance for securities credit losses.

(2)Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held-for-sale and non-performing loans.

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Comparison of Financial Condition at December 31, 2025 and December 31, 2024

Total assets increased by $1.14 billion to $14.56 billion, from $13.42 billion, primarily due to increases in loans and, to a lesser extent, securities. Total loans increased by $913.9 million to $11.03 billion, from $10.12 billion, primarily due to an increase of $797.1 million in the total commercial portfolio. The loan pipeline increased by $167.4 million to $474.1 million, from $306.7 million, primarily due to an increase in the commercial loan pipeline of $267.1 million. Debt securities available-for-sale increased by $404.3 million to $1.23 billion, from $827.5 million, primarily due to new purchases. Debt securities held-to-maturity decreased by $164.3 million to $881.6 million, from $1.05 billion, primarily due to principal repayments. Other assets decreased by $36.4 million to $149.3 million, from $185.7 million, primarily due to a decrease in market values associated with customer interest rate swap programs.

Total liabilities increased by $1.18 billion to $12.90 billion, from $11.72 billion primarily related to an increase in deposits and, to a lesser extent, FHLB advances. Deposits increased by $898.1 million to $10.96 billion, from $10.07 billion, primarily due to increases in time deposits of $387.9 million and interest bearing deposits of $353.9 million. Time deposits increased by $387.9 million to $2.47 billion, from $2.08 billion, representing 22.5% and 20.7% of total deposits, respectively. Time deposits included an increase in brokered time deposits of $535.1 million, partly offset by a decrease in retail time deposits of $149.0 million. The loans-to-deposit ratio was 100.6%, as compared to 100.5%. FHLB advances increased by $324.6 million to $1.40 billion, from $1.07 billion as a result of lower-cost funding availability. Other borrowings increased by $57.7 million to $255.2 million, from $197.5 million primarily due to the issuance of $185.0 million in subordinated notes in October 2025 at an initial rate of 6.375% and stated maturity of November 15, 2035. The proceeds were primarily used to redeem the Company’s subordinated notes due May 15, 2030, with principal amount of $125.0 million, in November 2025.

Other liabilities decreased by $89.1 million to $209.3 million, from $298.4 million, mostly due to a decrease in the market values of derivatives associated with customer interest rate swaps and related collateral received from counterparties.

Capital levels remain strong and in excess of “well-capitalized” regulatory levels at December 31, 2025, including the Company’s common equity tier one capital ratio of 10.72%. For the year ended December 31, 2025, the ratio was primarily impacted by loan growth, increased lending commitments and share repurchases, partly offset by execution of the credit risk transfer entered into in December 2025.

Total stockholders’ equity decreased to $1.66 billion, as compared to $1.70 billion, primarily due to the redemption of preferred stock for $55.5 million and capital returns comprised of dividends and share repurchases, partially offset by net income. Additionally, accumulated other comprehensive loss decreased by $13.7 million primarily due to increases in the fair market value of available-for-sale debt securities, net of tax. Noncontrolling interest decreased by $1.1 million due to the disposition of the title business.

During the year ended December 31, 2025, the Company repurchased 1,433,537 shares totaling $24.9 million at a weighted average cost of $17.21, which includes repurchases of exercised options and awards from employees outside of the share repurchase program. On July 16, 2025, the Company announced its Board of Directors authorized a 2025 Stock Repurchase Program to repurchase up to an additional 3.0 million shares. As of December 31, 2025, the Company had 3,226,284 shares available for repurchase under the authorized repurchase programs.

The Company’s stockholders’ equity to assets ratio was 11.42%, as compared to 12.69% and book value per common share decreased to $28.97, as compared to $29.08.

Comparison of Operating Results for the Years Ended December 31, 2025 and December 31, 2024

General

Net income available to common stockholders decreased to $67.1 million, or $1.17 per diluted share, as compared to $96.0 million, or $1.65 per diluted share. Net income available to common stockholders for the year ended December 31, 2025 included a net gain on equity investments of $916,000, restructuring charges of $11.5 million, merger related expenses of $4.3 million, credit risk transfer execution expense of $1.3 million, a $210,000 FDIC special assessment release, and a net loss on redemption of preferred stock of $1.8 million. These items decreased net income in the current year by $14.8 million, net of tax. The above items decreased diluted earnings per share by $0.26. Net income for the year ended December 31, 2024 included the Spring Garden opening provision for credit losses of $1.4 million, net gain on equity investments of $4.2 million, a net gain on sale of a portion of its trust business of $2.6 million, a FDIC special assessment fees of $418,000 and merger related expenses of $1.8 million. These items increased net income for the prior year by $2.5 million, net of tax.

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Interest Income

Interest income remained relatively stable at $642.5 million, from $642.2 million. The yield on average interest-earning assets decreased to 5.17%, from 5.23%, while the average balance of interest-earning assets increased by $149.1 million. This was primarily driven by an increase in commercial and residential loans.

Interest Expense

Interest expense decreased to $282.2 million, from $308.1 million, and the cost of average interest-bearing liabilities decreased to 2.81%, from 3.10%. This was primarily due to lower total cost of deposits, which decreased to 2.08%, from 2.36%. Average interest-bearing liabilities increased by $120.5 million, primarily due to an increase in total deposits.

Net Interest Income and Margin

Net interest income increased to $360.2 million, from $334.0 million. Net interest margin increased to 2.90%, from 2.72%, primarily due to the decrease in cost of funds outpacing the decrease in yield on average interest-earning assets.

Provision for Credit Losses

Provision for credit losses was $16.2 million, as compared to $7.7 million. The prior year included a $1.4 million initial provision for credit losses related to the acquisition of Spring Garden. The current year provision was primarily driven by net loan growth, an increase in unfunded loan balances and commitments, and elevated macroeconomic uncertainty, partly offset by overall improvements in criticized and classified loans.

Net loan charge-offs were $5.4 million for the current year, as compared to $1.6 million in the prior year. The current year included charge-offs of $2.5 million for four commercial relationships related to the Spring Garden acquisition, and charge-offs of $1.5 million related to sales of non-performing residential and consumer loans during the year. The prior year includes the impact of a $1.6 million charge-off related to a single commercial real estate relationship that was sold in the prior year.

Non-interest Income

Other income decreased to $44.7 million, as compared to $50.2 million. Other income for the year ended December 31, 2025 was favorably impacted by net gains on equity investments of $916,000. The prior year was favorably impacted by net gains on equity investments of $4.2 million and a net gain on sale of a portion of its trust business of $2.6 million. The remaining increase of $423,000 was primarily driven by increases in commercial loan swap income of $2.8 million due to new swaps, net gain on sale of loans of $1.3 million, and non-recurring other income of $1.9 million in the current year. These were partly offset by decreases in fees and service charges of $3.9 million related to lower title fees and a decrease of $855,000 related to a non-recurring gain on sale of assets in the prior year.

Non-interest Expense

Operating expenses increased to $296.2 million, as compared to $245.9 million. Operating expenses for the year ended December 31, 2025 were adversely impacted by $11.5 million of restructuring expenses, $4.3 million of merger related expenses, and $1.3 million of credit risk transfer execution expense, partly offset by a $210,000 release of FDIC special assessment fees. The prior year was adversely impacted by $1.8 million of merger related expenses and $418,000 of FDIC special assessment fees. The remaining increase of $35.7 million, was primary driven by an increase in compensation and benefits expense of $21.0 million related to acquisitions at the end of the prior year and the addition of commercial banking teams during the current year. Additional drivers were increases in professional fees of $4.3 million, partly related to Premier Banking recruitment fees, data processing expense of $3.4 million, other operating expenses of $3.3 million, primarily related to loan servicing expenses, occupancy expense of $2.1 million, partly due to additional space for commercial banking teams, and federal deposit insurance and regulatory assessments of $1.3 million.

Income Tax Expense

The provision for income taxes was $21.5 million, as compared to $30.3 million. The effective tax rate was 23.2% for both years. The current year’s effective tax rate was adversely impacted by non-deductible merger expenses. The prior year’s effective tax rate was adversely impacted by a non-recurring write-off of a deferred tax asset of $1.2 million net of other state effects and credits.

Comparison of Operating Results for the Years Ended December 31, 2024 and December 31, 2023

Refer to the Company’s 2024 Form 10-K on pages 50-51.

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Liquidity and Capital Resources

Liquidity Management

The Company manages its liquidity and funding needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses liquidity, and management monitors the adherence to policy limits to satisfy current and future cash flow needs. The policy includes internal limits, monitoring of key indicators, deposit concentrations, liquidity sources and availability, stress testing, collateral management, and other qualitative and quantitative metrics.

Management monitors cash on a daily basis to determine the liquidity needs of the Bank and OceanFirst Financial Corp. (the “Parent Company”), a separate legal entity from the Bank. Additionally, management performs multiple liquidity stress test scenarios on a periodic basis. As of December 31, 2025, the Bank and the Parent Company continued to maintain adequate liquidity under all stress scenarios. The Company also has a detailed contingency funding plan and obtains comprehensive reporting of funding trends on a monthly and quarterly basis, which are reviewed by management.

The Company continually evaluates its on-balance sheet liquidity, including cash and unpledged securities and funding capacity at the FHLB and FRB Discount Window, and periodically tests each of its lines of credit. As of December 31, 2025, total on-balance sheet liquidity and funding capacity was $3.8 billion.

The Bank has a highly operational and granular deposit base, with long-standing client relationships across multiple customer segments providing stable funding. The vast majority of government deposits are protected by FDIC insurance as well as the State of New Jersey under the Government Unit Deposit Protection Act, which requires uninsured government deposits to be further collateralized by the Bank. At December 31, 2025, the Bank reported $6.46 billion of estimated uninsured deposits in its Call Report. This total included $2.71 billion of collateralized government deposits and $1.90 billion of intercompany deposits of fully consolidated subsidiaries, leaving estimated adjusted uninsured deposits of $1.85 billion, or 16.8% of total deposits. On balance-sheet liquidity and funding capacity represented 206% of the estimated adjusted uninsured deposits.

The primary sources of liquidity specifically available to the Parent Company are dividends from the Bank, proceeds from the sale of investments, and the issuance of debt and common stock. For the year ended December 31, 2025, the Parent Company received dividend payments of $62.4 million from the Bank. At December 31, 2025, the Parent Company held $87.9 million in cash and cash equivalents.

The Bank’s primary sources of funds are deposits, principal and interest payments on loans and investments, FHLB advances, other borrowings and proceeds from the sale of loans and investments. While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment sales are greatly influenced by interest rates, economic conditions, and competition. The Bank has other sources of liquidity if a need for additional funds arises, including lines of credit at multiple financial institutions and access to the FRB Discount Window.

As of December 31, 2025, the Company pledged $7.92 billion of loans with the FHLB and FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a letter of credit to collateralize certain municipal deposits. The Company also pledged $1.45 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law. The Company had $1.40 billion of FHLB advances, including $929.2 million of outstanding FHLB term advances and $468.0 million of overnight borrowings as of December 31, 2025, as compared to $1.07 billion of FHLB term advances and no outstanding overnight borrowings from the FHLB at December 31, 2024.

The Company issued $185.0 million of subordinated notes in October 2025 at an initial rate of 6.375% and stated maturity of November 15, 2035. The proceeds were primarily used to redeem the Company’s subordinated notes due May 15, 2030, with principal amount of $125.0 million, in November 2025.

The Company’s cash needs for the year ended December 31, 2025 were primarily satisfied by increased deposits, net proceeds from FHLB advances, and principal repayments of securities, and primarily utilized to fund loan growth and to purchase debt securities. The Company’s cash needs for the year ended December 31, 2024 were primarily satisfied by FHLB advances and principal and interest payments on loans and securities and primarily utilized for the reduction of deposits.

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Off-Balance Sheet Commitments and Contractual Obligations

In the normal course of business, the Bank routinely enters into various off-balance-sheet commitments, primarily relating to the origination and funding of loans. At December 31, 2025, outstanding commitments to originate loans totaled $474.1 million and outstanding undrawn lines of credit totaled $1.88 billion, of which $1.60 billion were commitments to commercial and commercial construction borrowers and $278.8 million were commitments to consumer and residential construction borrowers. Commitments to fund undrawn lines of credit and commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the existing contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company’s exposure to credit risk is represented by the contractual amount of the instruments. These commitments are further discussed in Note 13 Commitments, Contingencies and Concentrations of Credit Risk, to the Consolidated Financial Statements.

At December 31, 2025, the Company also had various contractual obligations, which included debt obligations of $1.71 billion, including finance lease obligations of $1.1 million and an additional $19.0 million in operating lease obligations included in other liabilities, and purchase obligations of $70.1 million Refer to Note 9 Borrowed Funds and Note 17 Leases to the Consolidated Financial Statements for further discussion of debt obligations and lease obligations, respectively. Purchase obligations represent legally binding and enforceable agreements to purchase goods and services from third parties and consist primarily of contractual obligations under data processing servicing agreements. Actual amounts expended vary based on transaction volumes, number of users, and other factors. The Company expects to have sufficient funds available to meet current commitments in the normal course of business.

Time deposits scheduled to mature in one year or less totaled $2.43 billion at December 31, 2025. If these deposits do not remain with the Company, it may need to seek other sources of funds, including other deposit products, advances from the Federal Home Loan Bank of New York and other borrowing sources. Depending on market conditions, the Company may be required to pay higher rates on such deposits or borrowings than it currently pays.

Liquidity Used in Stock Repurchases and Cash Dividends

Under the Company’s stock repurchase program, shares of its common stock may be purchased in the open market and through other privately negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate purposes. For the year ended December 31, 2025, the Company repurchased 1,433,537 shares of its common stock totaling $24.9 million. Of these repurchased shares for the year ended December 31, 2025, 108,621 shares were repurchased outside of the Company’s stock repurchase program. The Company repurchased these shares from employees that elected to sell shares to cover their withholding tax obligations on vested stock awards and options. On July 16, 2025, the Company announced its Board authorized a 2025 Stock Repurchase Program to repurchase up to an additional 3.0 million shares. At December 31, 2025, there were 3,226,284 shares available to be repurchased under the authorized stock repurchase program.

Cash dividends on common stock declared and paid during the year ended December 31, 2025 were $46.2 million, as compared to $46.9 million for the prior year. Cash dividends on preferred stock declared and paid during the years ended December 31, 2025 were $2.0 million, as compared to $4.0 million for the prior year. On May 15, 2025, the Company redeemed all 57,370 shares of its 7.00% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A. The aggregate payment of $57.4 million, at a redemption price of $25.00 per share, resulted in a net loss on redemption of $1.8 million.

The Parent Company’s ability to continue to repurchase shares of common stock and pay dividends depends on capital distributions from the Bank, which may be adversely affected by capital restraints imposed by applicable regulations. If applicable regulations or regulators prevent the Bank from paying a dividend to the Parent Company, the Parent Company may not have the liquidity necessary to repurchase shares of common stock or pay a dividend in the future or pay a dividend at the same rate as historically paid or be able to meet current debt obligations. Additionally, regulations of the Federal Reserve may prevent the Parent Company from either paying or increasing the cash dividend to common stockholders. These regulatory policies may affect the ability of the Parent Company to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.

Capital Management

The Company manages its capital sources, uses, and expected future needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses capital and management monitors the adherence to policy limits

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to satisfy current and future capital needs. The policy includes internal limits, monitoring of key indicators, sources and availability, intercompany transactions, forecasts and stress testing, and other qualitative and quantitative metrics.

Management performs multiple capital stress test scenarios on a quarterly basis, varying loan growth, earnings, access to the capital markets, credit losses, and mark-to-market losses in the investment portfolio, including both available-for-sale and held-to-maturity. As of December 31, 2025, the Bank and Company continued to maintain adequate capital under all stress scenarios. The Bank and the Parent Company also have detailed contingency capital plans and obtain comprehensive reporting of capital trends on a regular basis, which are reviewed by management and the Board.

In December 2025, the Company executed a credit risk transfer consisting of 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. This transaction reduced the risk-weighted assets for this pool of loans for regulatory capital purposes.

The Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action Regulations. See Regulation and Supervision—Bank Regulation – Capital Requirements.

At December 31, 2025 and 2024, the Company maintained stockholders’ equity to total assets ratio of 11.42% and 12.69%, respectively.

Critical Accounting Policies and Estimates

Note 1 Summary of Significant Accounting Policies to the Company’s Audited Consolidated Financial Statements for the year ended December 31, 2025 contains a summary of significant accounting policies. Various elements of these accounting policies, by their nature, are subject to estimation techniques, valuation assumptions and other subjective assessments. Certain assets are carried on the Consolidated Statements of Financial Condition at estimated fair value or the lower of cost or estimated fair value. Policies with respect to the methodology used to determine the allowance for credit losses is a critical accounting policy and estimate because of its importance to the presentation of the Company’s financial condition and results of operations. The critical accounting policy involves a higher degree of complexity and requires management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions, and estimates could result in material differences in the results of operations or financial condition. The critical accounting policy and its application is reviewed periodically, and at least annually, with the Audit Committee of the Board.

Allowance for credit losses in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), was a critical accounting policy in the preparation of the consolidated financial statements as of and for the period ended December 31, 2025.

Goodwill in accordance with ASC 350, Intangibles - Goodwill and Other, was a critical accounting estimate in the preparation of the consolidated financial statements as of and for the period ended December 31, 2025.

Allowance for Credit Losses

The Company’s methodology to measure the ACL incorporates both quantitative and qualitative information to assess lifetime

expected credit losses at the portfolio segment level.

The quantitative component of the ACL involves assumptions that require a significant level of estimation; these include historical losses as a predictor of future performance, and the accuracy of macro-economic forecasts over a reasonable and supportable forecast period. The Company has elected to use an open pool method and extends its look back period each quarter to capture as many data points as possible in its historical loss rate calculation. A historical data set is expected to provide the best indication of future credit performance. Alternative loss calculation methods, such as vintage and migration methodologies, limit observable data to closed pools of loans, which excludes performance data from the historical loss rate calculation.

Macro-economic forecasts used in the quantitative analysis are provided by a third-party leader in global forecasting. The Company uses the base case macro-economic forecast to reflect the consensus view of future economic conditions. Electing scenarios that are stronger or weaker than the base case would reduce or increase, respectively, the ACL measurement. The Company measures the accuracy of the macro-economic forecasts quarterly to identify any material deviations that would be considered for a qualitative adjustment. The Company assumes a reasonable and supportable forecast period of eight quarters and a reversion period of four quarters based on the analysis of historical U.S. business cycles.

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Prepayment and forward interest rate projections are also assumptions used in the quantitative model subject to estimation. Changes in these assumptions have varying implications to the ACL measurement. For example, faster prepayment rates would shorten the life of loans and reduce the lifetime expected credit loss, whereas slower prepayment rates would have the inverse effect.

The Company considers qualitative adjustments to expected credit loss estimates for information not already captured in the loss estimation process. Qualitative loss factors are grounded in the Company’s long-term credit losses and reflect an assumption that past behavior is a reasonable predictor of future performance. The Company considers the peak two-year net charge off rate to capture maximum potential volatility over the reasonable and supportable forecast period. Historical losses that inform the guardrails for the qualitative adjustments are anchored to 2005 and extended annually. This period is intended to represent the credit profile of the current portfolio and capture prior performance in a severe economic recession. These guardrails are updated annually to capture recent behavior that is indicative of the credit profile of the current portfolio.

Management considers subjective, objective, and unique qualitative factors at each estimation date. Subjective factors incorporate external factors, personnel, and controls, as well as portfolio composition and performances. Subjective factors also include: local competition; portfolio nature, volume and concentration; credit trends; lending policy, procedure and loan review; lending management and staff; regulatory changes and forecast uncertainty. Objective factors address gaps in the quantitative model, such as the limited loss history and the inherent risk of Special Mention commercial real estate loans. Unique factors will capture one-time events, such as environmental threats and model updates that are expected to impact performance over the forecast period. Unique factors are identified, assessed, and documented in the quarter they are applied. Since 2022, the Company incorporated unique factors to address macro-economic uncertainty and alternative economic forecast projections.

Although management believes that it uses the best information available to establish the ACL in conformity with GAAP, future adjustments to the ACL may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. For example, at December 31, 2025, if the Company had elected a scenario using one level more favorable credit trends in the qualitative input in its commercial portfolio, the ACL measurement would have been approximately $2.7 million lower. Alternatively, if the Company had elected a more adverse scenario for its macro-economic forecasts, the ACL measurement would have been approximately $11.5 million higher. These sensitivity scenarios do not represent a change in the Company’s expectations of credit performance or the economic environment but provide hypothetical results to assess the sensitivity of the ACL to changes in key inputs.

Given the level of uncertainty and the material impact on the ACL measurement, all assumptions are reviewed and updated as necessary at each estimation date. Other than discussed above, there were no changes in the estimation methodology for these assumptions in 2025.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions. Goodwill is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates (i.e. triggering events). For the purposes of goodwill impairment testing, management has concluded that the Company has one reporting unit and the annual impairment test is performed as of August 31.

Testing of goodwill impairment comprises a two-step process. First, the Company performs a qualitative assessment to evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. The factors considered in the qualitative assessment include macroeconomic conditions, industry and market conditions and the overall financial performance of the Company, among other factors. If the Company determines that it is more likely than not that the fair value of the Company is less than its carrying amounts, then it proceeds to the quantitative impairment test, whereby it calculates the fair value of the Company. In its performance of impairment testing, management has the unconditional option to proceed directly to the quantitative impairment test, bypassing the qualitative assessment. If the carrying amount of the Company exceeds its fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge. If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the Company that is greater than the carrying amount, then no impairment charge is recorded.

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The Company completed its annual goodwill impairment test as of August 31, 2025. For the annual test, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test based on the stock price of the Company on the measurement date and economic uncertainty. To perform the quantitative assessment, the Company engaged a third-party service provider to assist management with the determination of the fair value of the Company. The Company estimated the fair value of equity using the market capitalization method of the market approach, consideration of initiatives unknown by the market and evaluation of any implied control premium.

The market capitalization method calculated the aggregate market value of the Company based on the total number of outstanding shares of common and preferred stock and the market prices of the shares as of the assessment date. The Company evaluated conditions that were unknown by the market as of the assessment date and how a market participant would evaluate an implied control premium for the Company. The implied control premium was supported using a discounted cash flow analysis that contemplated the present value of assumed market participant cost savings and synergies.

The 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 incurrence, industry and economic trends, and other relevant considerations. For periods beyond those forecasted, a terminal value was estimated based on an assumed long-term growth rate, which was derived using the Gordon Growth Model. The discount rate applied to the forecasted cash flows was calculated using a build-up approach, which starts with the risk-free interest rate, which was then calibrated for market and company specific risk premiums, including a beta, equity risk, size, and company-specific risk premiums to reflect risks and uncertainties in the financial market and in the Company’s business projections.

Significant negative industry or economic trends, including declines in the market price of the Company’s stock, reduced estimates of future cash flows or business disruptions could result in impairments to goodwill in the future, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. Management will continue evaluating the economic conditions at future reporting periods for triggering events.

The results of the quantitative assessment indicated that the fair value of the Company’s reporting unit exceeded its carrying amount, which resulted in no impairment loss at August 31, 2025.

Management continued to carefully assess and evaluate all available information for potential triggering events after the August 31 annual testing date and through December 31, 2025. Management concluded no triggering events were identified subsequent to the August 31, 2025 annual test date.

Impact of New Accounting Pronouncements

For further information regarding accounting pronouncements, refer to Note 1. Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Impact of Inflation and Changing Prices

The consolidated financial statements and notes thereto presented herein have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollar amounts without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of the Company’s operations. Unlike industrial companies, nearly all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a greater impact on the Company’s performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

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