株探米国株
英語
エドガーで原本を確認する
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________________________________ 
FORM 10-Q
 ________________________________________________  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-11713
________________________________________________  
OceanFirst Financial Corp.
(Exact name of registrant as specified in its charter)
 ________________________________________________ 
Delaware 22-3412577
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
110 West Front Street, Red Bank, NJ 07701
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (732) 240-4500
________________________________________________  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common stock, $0.01 par value per share OCFC NASDAQ
Depositary Shares (each representing a 1/40th interest in a share of 7.0% Series A Non-Cumulative, perpetual preferred stock) OCFCP NASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No   ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer   Accelerated Filer  
Non-accelerated Filer   Smaller Reporting Company  
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


YES ☐ NO ☒.
As of April 29, 2024, there were 58,713,469 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.


OceanFirst Financial Corp.
INDEX TO FORM 10-Q
 
    PAGE
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FINANCIAL SUMMARY(1)
At or for the Quarters Ended
(dollars in thousands, except per share amounts) March 31, 2024 December 31, 2023 March 31, 2023
SELECTED FINANCIAL CONDITION DATA:
Total assets $ 13,418,978  $ 13,538,253  $ 13,555,175 
Loans receivable, net of allowance for loan credit losses 10,068,209  10,136,721  9,986,949 
Deposits 10,236,851  10,434,949  9,993,095 
Total stockholders’ equity 1,665,837  1,661,945  1,610,371 
SELECTED OPERATING DATA:
Net interest income 86,224  87,824  98,802 
Provision for credit losses 591  3,153  3,013 
Other income 12,286  11,861  2,073 
Operating expenses 58,672  60,189  61,309 
Net income 28,610  27,752  27,899 
Net income attributable to OceanFirst Financial Corp. 28,667  27,682  27,883 
Net income available to common stockholders 27,663  26,678  26,879 
Diluted earnings per share 0.47  0.46  0.46 
SELECTED FINANCIAL RATIOS:
Book value per common share at end of period 28.32  27.96  27.07 
Cash dividend per share 0.20  0.20  0.20 
Dividend payout ratio per common share 42.55  % 43.48  % 43.48  %
Stockholders’ equity to total assets 12.41  12.28  11.88 
Return on average assets (2) (3) (4)
0.82  0.78  0.82 
Return on average stockholders’ equity (2) (3) (4)
6.65  6.41  6.77 
Net interest rate spread (5)
2.23  2.25  2.94 
Net interest margin (2) (6)
2.81  2.82  3.34 
Operating expenses to average assets (2) (4)
1.74  1.76  1.88 
Efficiency ratio (4) (7)
59.56  60.38  60.78 
Loan-to-deposit ratio (8)
98.90  97.70  100.50 
ASSET QUALITY (9):
Non-performing loans (10)
$ 35,011  $ 29,548  $ 22,437 
Allowance for loan credit losses as a percent of total loans receivable (8) (11)
0.66  % 0.66  % 0.60  %
Allowance for loan credit losses as a percent of total non-performing loans (10) (11)
191.86  227.21  268.28 
Non-performing loans as a percent of total loans receivable (8) (10)
0.35  0.29  0.22 
Non-performing assets as a percent of total assets (10)
0.26  0.22  0.17 
(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Ratios are annualized.
(3) Ratios for each period are based on net income available to common stockholders.
(4) Performance ratios for the quarter ended March 31, 2024 included a net benefit related to a net gain on equity investments, a net gain on sale of trust business and the Federal Deposit Insurance Corporation (“FDIC”) special assessment of $2.7 million, or $2.0 million, net of tax expense. Performance ratios for the quarter ended December 31, 2023 included a net benefit related to a net gain on equity investments and the FDIC special assessment of $513,000, or $384,000, net of tax expense. Performance ratios for the quarter ended March 31, 2023 included a net expense related to merger related expenses, net branch consolidation expense, net loss on equity investments, and net loss on sale of investments of $7.6 million, or $5.8 million, net of tax benefit.
(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) At March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a single commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.
(10) 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.
(11) Loans acquired from prior bank acquisitions were recorded at fair value. The net unamortized credit and purchased with credit deterioration (“PCD”) marks on these loans, not reflected in the allowance for loan credit losses, was $7.0 million, $7.5 million, and $10.5 million at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

4

Summary
OceanFirst Financial Corp. is the holding company for OceanFirst Bank N.A. (the “Bank”), a regional bank serving business and retail customers throughout New Jersey and the major metropolitan areas of Philadelphia, New York, Baltimore, and Boston. 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, 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 and actions of regulatory agencies.
Key developments relating to the Company’s financial results and corporate activities for the quarter ended March 31, 2024 were as follows:

•Net Interest Margin: Net interest margin of 2.81%, reflecting a level of stabilization.
•Capital Accretion: The Company continued to build capital, while also resuming share repurchases. The Company’s common equity tier 1 capital ratio and book value per share were 11.01% and $28.32, respectively, and increased 15 basis points and $0.36 from the prior linked quarter. The Company repurchased 957,827 shares totaling $15.1 million.
•Expense Management: The Company continued to exercise disciplined expense control. Non-interest expense was $58.7 million, which included a FDIC special assessment charge of $418,000.
•Asset Quality: Asset quality metrics remain strong as criticized and classified assets, non-performing loans, and loans 30 to 89 days past due as a percentage of total loans receivable were 1.65%, 0.35%, and 0.17%, respectively. These metrics continue to reflect strong credit performance and remain low compared to pre-pandemic levels.
The current quarter results were impacted by the following matters. Net interest income and margin were modestly impacted by a continued mix-shift to and repricing of higher-cost funding that offset the increase in yields on interest-earning assets. Deposit beta, which is the change in rates paid to customers relative to the change in federal funds target rate, increased modestly to 40%, from 38% in the prior linked quarter. Additionally, the results included several non-recurring matters, which included a $1.2 million gain on sale of a portion of the Company’s trust business, a $1.2 million write-off in income tax expense, $418,000 in FDIC special assessments, and $345,000 in bank owned life insurance death benefits.
Net income available to common stockholders for the quarter ended March 31, 2024 increased to $27.7 million, or $0.47 per diluted share, as compared to $26.9 million, or $0.46 per diluted share, for the corresponding prior year period. The dividends paid to preferred stockholders were $1.0 million for each of the three months ended March 31, 2024 and 2023, respectively.
On April 18, 2024, the Company’s Board of Directors declared a quarterly cash dividend on common stock of $0.20 per share. The dividend, related to the quarter ended March 31, 2024, will be paid on May 17, 2024 to common stockholders of record on May 6, 2024. The Board also declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing a 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 15, 2024 to preferred stockholders of record on April 30, 2024.
5

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, 2024, interest income included net loan fees of $737,000, as compared to $598,000 for the same prior year period.
The following table sets forth certain information relating to the Company for the three months ended March 31, 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.
  For the Three Months Ended March 31,
  2024 2023
(dollars in thousands) Average Balance Interest
Average
Yield/
Cost (1)
Average Balance Interest
Average
Yield/
Cost (1)
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments $ 163,192  $ 2,226  5.49  % $ 129,740  $ 938  2.93  %
Securities (2)
2,098,421  22,255  4.27  1,955,399  16,376  3.40 
Loans receivable, net (3)
Commercial 6,925,048  104,421  6.06  6,840,006  92,780  5.50 
Residential real estate 2,974,468  28,596  3.85  2,872,049  25,161  3.50 
Home equity loans and lines and other consumer (“other consumer”) 248,396  4,104  6.65  263,404  3,779  5.82 
Allowance for loan credit losses, net of deferred loan costs and fees (59,141) —  —  (50,554) —  — 
Loans receivable, net 10,088,771  137,121  5.46  9,924,905  121,720  4.96 
Total interest-earning assets 12,350,384  161,602  5.26  12,010,044  139,034  4.68 
Non-interest-earning assets 1,206,336  1,234,549 
Total assets $ 13,556,720  $ 13,244,593 
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing checking $ 3,925,965  20,795  2.13  % $ 3,863,338  6,269  0.66  %
Money market 1,092,003  9,172  3.38  705,631  1,759  1.01 
Savings 1,355,718  4,462  1.32  1,369,118  334  0.10 
Time deposits 2,414,063  25,426  4.24  1,826,662  12,968  2.88 
Total 8,787,749  59,855  2.74  7,764,749  21,330  1.11 
Federal Home Loan Bank (“FHLB”) advances 644,818  7,771  4.85  1,222,791  14,614  4.85 
Securities sold under agreements to repurchase 68,500  411  2.41  71,898  90  0.51 
Other borrowings (4)
500,901  7,341  5.89  306,156  4,198  5.56 
Total borrowings 1,214,219  15,523  5.14  1,600,845  18,902  4.79 
Total interest-bearing liabilities 10,001,968  75,378  3.03  9,365,594  40,232  1.74 
Non-interest-bearing deposits 1,634,583  2,028,507 
Non-interest-bearing liabilities (4)
247,129  240,815 
Total liabilities 11,883,680  11,634,916 
Stockholders’ equity 1,673,040  1,609,677 
Total liabilities and equity $ 13,556,720  $ 13,244,593 
Net interest income $ 86,224  $ 98,802 
Net interest rate spread (5)
2.23  % 2.94  %
Net interest margin (6)
2.81  % 3.34  %
Total cost of deposits (including non-interest-bearing deposits) 2.31  % 0.88  %
(1)Average yields and costs are annualized.
(2)Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank (“FRB”) stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
(3)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.
(4)For 2023, includes reclassifications to conform with current period presentation.
(5)Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income divided by average interest-earning assets.
6

Comparison of Financial Condition at March 31, 2024 and December 31, 2023
Total assets decreased by $119.3 million to $13.42 billion, from $13.54 billion, primarily due to decreases in loans and debt securities. Total loans decreased by $68.9 million to $10.13 billion, from $10.19 billion, due to loan payoffs and lower loan originations. For more information on the composition of the loan portfolio, see “Lending Activities.” Held-to-maturity debt securities decreased by $31.1 million to $1.13 billion, from $1.16 billion, primarily due to principal repayments. Other assets increased by $20.3 million to $200.0 million, from $179.7 million, primarily due to an increase in market values associated with customer interest rate swap programs.
Total liabilities decreased by $123.2 million to $11.75 billion, from $11.88 billion primarily related to lower deposits and a funding mix shift. Deposits decreased by $198.1 million to $10.24 billion, from $10.43 billion. Time deposits decreased to $2.32 billion, from $2.45 billion, or 22.7% and 23.4% of total deposits, respectively, which was primarily related to planned runoff of brokered time deposits, which decreased by $88.1 million. The loan-to-deposit ratio was 98.9%, as compared to 97.7%. FHLB advances decreased by $190.2 million to $658.4 million, from $848.6 million due to mix shift in funding sources to other borrowings, which increased by $229.3 million to $425.7 million, from $196.5 million, as a result of lower cost funding availability.
Other liabilities increased by $36.4 million to $337.1 million, from $300.7 million, primarily due to an increase in the market values 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 March 31, 2024, including the Company’s common equity tier one capital ratio which increased to 11.01%, up 15 basis points from December 31, 2023.
Total stockholders’ equity increased to $1.67 billion, as compared to $1.66 billion, primarily reflecting net income, partially offset by capital returns comprising of share repurchases and dividends. For the quarter ended March 31, 2024, the Company repurchased 957,827 shares totaling $15.1 million representing a weighted average cost per share of $15.64. The Company had 1,976,611 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $1.4 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax. The Company’s stockholders’ equity to assets ratio was 12.41%, as compared to 12.28% and book value per share increased to $28.32, as compared to $27.96.

Comparison of Operating Results for the Three Months Ended March 31, 2024 and March 31, 2023
General
Net income available to common stockholders increased to $27.7 million, or $0.47 per diluted share, as compared to $26.9 million, or $0.46 per diluted share. Net income for the quarter ended March 31, 2024 included net gains on equity investments of $1.9 million, a net gain on sale of a portion of its trust business of $1.2 million, and the special FDIC assessment of $418,000. These items increased net income by $2.0 million, net of tax, for the quarter ended March 31, 2024. Net income for the quarter ended March 31, 2023 included merger related expenses of $22,000, net branch consolidation expense of $70,000, net loss on equity investments of $2.2 million and net loss on sale of investments of $5.3 million. These items decreased net income by $5.8 million, net of tax, for the quarter ended March 31, 2023.
Interest Income
Interest income increased to $161.6 million, from $139.0 million and the yield on average interest-earning assets increased to 5.26%, from 4.68%. The average balance of interest-earning assets increased by $340.3 million, primarily driven by growth of $163.9 million in total loans and $143.0 million in securities.
Interest Expense
Interest expense increased to $75.4 million, from $40.2 million, primarily due to a $1.02 billion increase in the average balance of deposits and a $194.7 million increase in the average balance of other borrowings, partly offset by a $578.0 million decrease in the average balance of FHLB advances, which reflect a shift in funding sources. The cost of average interest-bearing liabilities increased to 3.03%, from 1.74%, primarily due to higher cost of deposits. The total cost of deposits (including non-interest-bearing deposits) increased to 2.31%, from 0.88%.
7

Net Interest Income and Margin
Net interest income decreased to $86.2 million, from $98.8 million, primarily reflecting the net impact of the higher interest rate environment. The net interest margin decreased to 2.81%, from 3.34%, primarily due to the increase in cost of funds outpacing the increase in yield on average interest-earning assets.
Provision for Credit Losses
Provision for credit losses was $591,000, as compared to $3.0 million. The current quarter provision was driven by the net effect of continued uncertainty impacting the banking industry and improvements in macro-economic forecasts. Net loan charge-offs were $349,000 primarily related to a single consumer borrower, as compared to net loan recoveries of $47,000.
Non-interest Income
Other income increased to $12.3 million, as compared to $2.1 million. Other income was favorably impacted by net gains on equity investments of $1.9 million and a net gain on sale of a portion of its trust business of $1.2 million. The prior year period’s other income was adversely impacted by a net loss equity investments of $2.2 million and net loss on sale of investment of $5.3 million. The remaining decrease of $370,000 was driven by a decrease in fees and service charges of $686,000 on lower retail deposit fees and title activity.
Non-interest Expense
Operating expenses decreased to $58.7 million, as compared to $61.3 million. Operating expenses were adversely impacted by an FDIC special assessment of $418,000 in the current year, and $92,000 from merger-related and net branch consolidation expenses in the prior year. The remaining decrease of $3.0 million was driven by decreases in professional fees of $2.4 million and compensation and employee benefits expenses of $1.2 million, which reflect the net realization of the Company’s performance improvements initiatives and strategic investments made over the past year.
Income Tax Expense
The provision for income taxes was $10.6 million, as compared to $8.7 million. The effective tax rate was 27.1%, as compared to 23.7%. The current quarter's effective tax rate was negatively impacted by 3.0% due to a write-off of a deferred tax asset of $1.2 million.
8

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 March 31, 2024, 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 March 31, 2024, total on-balance sheet liquidity and funding capacity was $3.7 billion.
The Company has a highly operational and granular deposit base, with long-standing client relationships across multiple customer segments providing stable funding. The vast majority of the government deposits are protected by the Federal Deposit Insurance Corporation 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 March 31, 2024, the Bank reported in its Call Report $5.36 billion of estimated uninsured deposits. This total included $2.45 billion of collateralized government deposits and $1.40 billion of intercompany deposits of fully consolidated subsidiaries, leaving estimated adjusted uninsured deposits of $1.52 billion, or 14.7% of total deposits. On-balance-sheet liquidity and funding capacity represented 243.8% of the estimated adjusted uninsured deposits.
The primary sources of liquidity specifically available to the Parent Company are dividends from the Bank, proceeds from sale of investments, and the issuance of debt, preferred and common stock. For the three months ended March 31, 2024, the Parent Company received dividend payments of $41.0 million from the Bank. At March 31, 2024, the Parent Company held $90.5 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, and other borrowings. 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 March 31, 2024, the Company pledged $7.34 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 municipal letter of credit to collateralize certain municipal deposits. The Company also pledged $1.35 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law. The Company had $658.4 million of FHLB advances, including $49.8 million of overnight borrowings as of March 31, 2024, as compared to $848.6 million of FHLB term advances at December 31, 2023, and no outstanding overnight borrowings from the FHLB. The Company had $425.7 million of other borrowings as of March 31, 2024, as compared to $196.5 million at December 31, 2023, reflecting a shift in funding sources from FHLB advances to other borrowings. The Company had no outstanding borrowings from the FRB discount window at both March 31, 2024 or December 31, 2023.
The Company’s cash needs for the quarter ended March 31, 2024 were primarily satisfied by the increase in other borrowings. The cash was utilized for the reduction of FHLB advances and deposits.
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 March 31, 2024, outstanding commitments to originate loans totaled $136.5 million and outstanding undrawn lines of credit totaled $1.40 billion, of which $1.07 billion were commitments to commercial and commercial construction borrowers and $330.4 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.
9

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.
At March 31, 2024, the Company also had various contractual obligations, which included debt obligations of $1.15 billion, including finance lease obligations of $1.6 million, and an additional $19.1 million in operating lease obligations included in other liabilities. 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 $2.24 billion at March 31, 2024.
Liquidity Used in Stock Repurchases and Cash Dividends
Under the Company’s stock repurchase program, shares of OceanFirst Financial Corp. 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 quarter ended March 31, 2024, the Company resumed repurchase activity, repurchasing 957,827 shares of its common stock totaling $15.1 million. At March 31, 2024, there were 1,976,611 shares available to be repurchased under the authorized stock repurchase program.
Cash dividends on common stock declared and paid during the first three months of March 31, 2024 were $11.9 million. Cash dividends on preferred stock declared and paid during the first three months of March 31, 2024 were $1.0 million.
The Company’s ability to continue to repurchase shares of common stock and pay dividends remain dependent upon capital distributions from the Bank, which may be adversely affected by capital restraints imposed by applicable regulations. If applicable regulations or regulatory bodies prevent the Bank from paying a dividend to the Company, the 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 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 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.
Additionally, management performs multiple capital stress test scenarios periodically, 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 March 31, 2024, the Bank and Parent Company continued to maintain adequate capital under all stress scenarios, including a scenario where all losses related to the investment securities portfolio are realized. 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.
10

Regulatory Capital Requirements
As of March 31, 2024 and December 31, 2023, the Company and the Bank satisfied all regulatory capital requirements currently applicable as follows (dollars in thousands):
Actual For capital adequacy
purposes
To be well-capitalized
under prompt
corrective action
As of March 31, 2024 Amount Ratio Amount Ratio Amount Ratio
Company:
Tier 1 capital (to average assets) $ 1,223,658  9.38  % $ 521,831  4.00  % N/A N/A
Common equity Tier 1 (to risk-weighted assets)
1,093,935  11.01  695,214  7.00 
(1)
N/A N/A
Tier 1 capital (to risk-weighted assets) 1,223,658  12.32  844,189  8.50 
(1)
N/A N/A
Total capital (to risk-weighted assets) 1,419,157  14.29  1,042,821  10.50 
(1)
N/A N/A
Bank:
Tier 1 capital (to average assets) $ 1,148,120  8.87  % $ 517,815  4.00  % $ 647,269  5.00  %
Common equity Tier 1 (to risk-weighted assets)
1,148,120  11.68  687,868  7.00 
(1)
638,734  6.50 
Tier 1 capital (to risk-weighted assets) 1,148,120  11.68  835,268  8.50 
(1)
786,134  8.00 
Total capital (to risk-weighted assets) 1,218,619  12.40  1,031,802  10.50 
(1)
982,668  10.00 
As of December 31, 2023
Company:
Tier 1 capital (to average assets) $ 1,218,142  9.31  % $ 523,588  4.00  % N/A N/A
Common equity Tier 1 (to risk-weighted assets)
1,088,542  10.86  701,778  7.00 
(1)
N/A N/A
Tier 1 capital (to risk-weighted assets) 1,218,142  12.15  852,159  8.50 
(1)
N/A N/A
Total capital (to risk-weighted assets) 1,413,400  14.10  1,052,667  10.50 
(1)
N/A N/A
Bank:
Tier 1 capital (to average assets) $ 1,155,896  8.90  % $ 519,690  4.00  % $ 649,612  5.00  %
Common equity Tier 1 (to risk-weighted assets)
1,155,896  11.65  694,620  7.00 
(1)
645,004  6.50 
Tier 1 capital (to risk-weighted assets) 1,155,896  11.65  843,467  8.50 
(1)
793,852  8.00 
Total capital (to risk-weighted assets) 1,226,154  12.36  1,041,930  10.50 
(1)
992,315  10.00 
(1)Includes the Capital Conservation Buffer of 2.50%.
The Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action regulations.
At March 31, 2024 and December 31, 2023, the Company maintained a stockholders’ equity to total assets ratio of 12.41% and 12.28%, respectively.
11

Lending Activities
Loan Portfolio Composition. At March 31, 2024, the Company had total loans outstanding of $10.13 billion, of which $6.24 billion, or 61.6% of total loans, were commercial real estate, multi-family, and land loans (collectively, “commercial real estate”). The remainder of the portfolio consisted of $677.2 million of commercial and industrial loans, or 6.7% of total loans; $2.97 billion of residential real estate loans, or 29.3% of total loans; and $245.9 million of consumer loans, primarily home equity loans and lines of credit, or 2.4% of total loans.
Commercial real estate. The Bank originates commercial real estate loans that are secured by properties, or properties under construction, that are generally used for business purposes such as office, industrial, multi-family or retail facilities. Commercial real estate loans are provided on owner-occupied properties and on investor-owned properties. At March 31, 2024, of the total commercial real estate portfolio, $5.32 billion or 85.3% was considered investor-owned and $914.6 million or 14.7% was considered owner-occupied.
The Bank performs extensive due diligence in underwriting commercial real estate loans due to the larger loan amounts and the riskier nature of such loans. The Bank assesses and mitigates the risk in several ways, including inspection of all such properties and the review of the overall financial condition of the borrower and guarantors, which include, for example, the review of the rent rolls and applicable leases/lease terms and conditions and the verification of income. A tenant analysis and market analysis are part of the underwriting.
For investor-owned properties, because repayment is often dependent on the successful management of the properties, repayment of commercial real estate loans may be affected by adverse conditions in the real estate market or the economy. As a result, the Bank is particularly vigilant of this portfolio. The Bank believes this portfolio is highly diversified with loans secured by a variety of property types in multiple geographies and the portfolio exhibits stable credit quality.
The following tables present additional information on the Company’s commercial real estate - investor owned loans. The Company’s commercial real estate - investor owned loans by industry as of March 31, 2024:
As of March 31, 2024
(dollars in thousands) Amount Percent of Total
Weighted Average LTV (1)
Weighted Average Debt Service Coverage Ratio (2)
Office $ 531,666  11  % 52  % 1.7x
Medical 311,497  57  1.7
Credit Tenant 262,224  64  1.5
Total Office (3)
1,105,387  24  56  1.7
Retail 1,081,900  23  57  1.9
Multi-family (4)
883,877  19  58  1.6
Industrial/warehouse 721,762  15  52  2.0
Hospitality 153,524  48  1.9
Other (5)
739,773  16  46  1.8
Total $ 4,686,223  100  % 54  1.8
Construction 636,532 
Total CRE Investor owned and construction $ 5,322,755 
(1) Represents the weighted average of loan balances as of March 31, 2024 divided by their most recent appraisal value, which is generally obtained at the time of origination.
(2) Represents the weighted average of net operating income on the property before debt service divided by the loan’s respective annual debt service based on the most recent credit review of the borrower.
(3) Central business district (“CBD”) exposure represents $123 million, or 11.1%, of the total office loan balance. Office CBD loans had a weighted average LTV of 66% and weighted average debt service coverage ratio of 1.6x. $82 million, or 67%, of the total office CBD exposure are to credit tenants, life sciences and medical borrowers. New York City office CBD loans represent $16 million, or 0.12% of the Company’s total assets.
(4) New York City rent-regulated multi-family loans, where the property has more than 50% of its units rent-regulated, represent $36 million, or 0.27% of the Company’s total assets.
(5) Other includes co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.
12

The following table presents total commercial real estate - investor owned loans by geography (generally based on location of collateral) as of March 31, 2024:
As of March 31, 2024
(dollars in thousands) Amount Percent of Total
New York $ 1,546,423  33  %
Pennsylvania and Delaware 1,254,500  27 
New Jersey 1,177,786  25 
Maryland and District of Columbia 149,624 
Massachusetts 149,020 
Other 408,870 
Total $ 4,686,223  100  %
Construction 636,532 
Total CRE investor owned and construction $ 5,322,755 
Asset quality. The following table sets forth information regarding the Company’s non-performing assets, consisting of non-performing loans. It is the policy of the Company to cease accruing interest on loans 90 days or more past due or in the process of foreclosure.
March 31, December 31,
2024 2023
  (dollars in thousands)
Non-performing loans (1):
Commercial real estate – investor $ 21,507  $ 20,820 
Commercial real estate – owner occupied 3,355  351 
Commercial and industrial 567  304 
Residential real estate 7,181  5,542 
Other consumer 2,401  2,531 
Total non-performing loans and assets $ 35,011  $ 29,548 
PCD loans, net of allowance for loan credit losses
$ 16,700  $ 16,122 
Delinquent loans 30-89 days $ 17,534  $ 19,202 
Allowance for loan credit losses as a percent of total loans (2)
0.66  % 0.66  %
Allowance for loan credit losses as a percent of total non-performing loans (2)
191.86  227.21 
Non-performing loans as a percent of total loans receivable 0.35  0.29 
Non-performing assets as a percent of total assets 0.26  0.22 
(1)As of March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a single commercial real estate relationship that was partially charged-off during 2023
(2)Loans acquired from prior bank 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, were $7.0 million and $7.5 million at March 31, 2024 and December 31, 2023, respectively.
Overall asset quality metrics remained strong for the quarter. The Company’s non-performing loans represented 0.35% and 0.29% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 191.86%, as compared to 227.21%. The level of 30 to 89 days delinquent loans decreased to $17.5 million, from $19.2 million. The Company’s allowance for loan credit losses was 0.66% of total loans for each period.
13


The Company classifies loans and other assets in accordance with regulatory guidelines. The table below excludes any loans held-for-sale and represents Special Mention and Substandard assets (in thousands):
March 31, December 31,
2024 2023
Special Mention $ 69,283  $ 40,385 
Substandard 98,241  106,552 
The increase in special mention loans was primarily due to new downgrades of three commercial relationships totaling $33.5 million, partly offset by three commercial loans totaling $3.5 million which were upgraded during the quarter. Additionally, the decrease in substandard loans was primarily due to two CRE-Investor Owned relationships totaling $7.6 million that migrated from substandard to pass.
14

Critical Accounting Policies and Estimates

Note 1 to the Company’s Audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), as supplemented by this report, 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 and high level of subjectivity. 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 of Directors.
Goodwill in accordance with ASC 350, Intangibles – Goodwill and Other was a critical accounting estimate in the preparation of the consolidated financial statements.

Impact of New Accounting Pronouncements

Accounting Pronouncements Adopted in 2024
In June 2022, the financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, this update introduces new disclosure requirements to provide information about the contractual sales restriction including the nature and remaining duration of the restriction. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023. Early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
In March 2023, FASB issued ASU 2023-02, “Investments - Equity Method and Joint Venture (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”. The amendments in this ASU permit reporting entities to account for the tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023. Early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted
In August 2023, 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 Company does not expect this standard to have a material impact to the consolidated financial statements.
In November 2023, FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in this ASU require improved reportable segment information on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect this standard to have an impact on the consolidated financial statements.
In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements.
15

Private Securities Litigation Reform Act Safe Harbor Statement
In addition to historical information, this quarterly report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of OceanFirst Financial Corp. (the “Company”). These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those items discussed under Item 1A. Risk Factors herein and the following: changes in interest rates, inflation, general economic conditions, potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio, including the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the effect of the Company’s rating under the Community Reinvestment Act, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations.
These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
16

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Management of Interest Rate Risk (“IRR”)
Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the IRR inherent in its lending, investment, deposit-taking, and funding activities. The Company’s profitability is affected by fluctuations in interest rates. Changes in interest rates may negatively or positively impact the Company’s earnings to the extent that the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis. Changes in interest rates may also negatively or positively impact the market value of the Company’s investment securities, in particular fixed-rate instruments. Net gains or losses in available-for-sale securities can increase or decrease accumulated other comprehensive income or loss and total stockholders’ equity. Management actively monitors and manages IRR. The extent of the movement of interest rates, higher or lower, is an uncertainty that could have a substantial impact on the earnings and stockholders’ equity of the Company.
The principal objectives of the IRR management function are to: evaluate the IRR inherent in the Company’s business; determine the level of risk appropriate given the Company’s business focus, operating and interest rate environment, capital and liquidity requirements, and performance objectives; and manage the risk consistent with Board approved guidelines. The Company’s Board maintains an Asset Liability Committee (“ALCO”) consisting of members of management, responsible for reviewing asset liability policies and the IRR position. ALCO meets regularly and reports the Company’s IRR position and trends to the Board on a regular basis.
The Company utilizes a number of strategies to manage IRR including, but not limited to: (1) managing the origination, purchase, sale, and retention of various types of loans with differing IRR profiles; (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing stable relationship-based deposits and longer-term deposits; (3) selectively purchasing interest rate swaps and caps converting the rates for customer loans to manage individual loans and the Bank’s overall IRR profile; (4) managing the investment portfolio IRR profile; (5) managing the maturities and rate structures of borrowings and time deposits; and (6) purchasing interest rate swaps to manage overall balance sheet interest rate risk.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” Interest rate sensitivity is monitored through the use of an IRR model, which measures the change in the institution’s economic value of equity (“EVE”) and net interest income under various interest rate scenarios. EVE is the difference between the net present value of assets, liabilities and off-balance-sheet contracts. Interest rate sensitivity is monitored by management through the use of a model which measures IRR by modeling the change in EVE and net interest income over a range of interest rate scenarios. Modeled assets and liabilities are assumed to reprice at respective repricing or maturity dates. Pricing caps and floors are included in the results, where applicable. The Company uses prepayment expectations set forth by market sources as well as Company generated data where applicable. Generally, cash flows from loans and securities are assumed to be reinvested to maintain a static balance sheet. Other assumptions about balance sheet mix are generally held constant. The Company’s interest rate sensitivity should be reviewed in conjunction with the financial statements and notes thereto contained in the 2023 Form 10-K.
The methodologies and assumptions used in this analysis are periodically evaluated and refined in response to changes in the market environment, changes in the Company’s balance sheet composition, enhancements in the Company’s modeling and other factors. Such changes may affect historical comparisons of these results.

17

The Company performs a variety of EVE and twelve-month net interest income sensitivity scenarios. The following table sets forth sensitivity for a specific range of interest rate scenarios as of March 31, 2024 and December 31, 2023.
  March 31, 2024 December 31, 2023
Change in Interest Rates in Basis Points Economic Value of Equity Net Interest Income Economic Value of Equity Net Interest Income
(Rate Shock) % Change % Change % Change % Change
300 (4.9) % 3.0  % (12.8) % (2.2) %
200 (3.0) 2.3  (9.1) (1.3)
100 (1.4) 1.5  (5.2) (0.4)
Static —  —  —  — 
(100) 1.8  (1.6) 7.0  (0.5)
(200) 2.7  (3.7) 8.8  (1.9)
(300) 0.3  (6.6) 6.8  (4.2)
The net interest income sensitivity results indicate that at March 31, 2024 the Company was modestly asset sensitive. The change in sensitivity between March 31, 2024 and December 31, 2023 was impacted by a deposit mix shift within non-maturity deposits with lower betas as well as a change in loan prepayments, partially offset by an increase in overnight borrowings and reduction in short-term time deposits.

Overall, the measure of EVE at risk decreased in all rate scenarios from December 31, 2023 to March 31, 2024. This decrease was the result of a deposit mix shift within non-maturity deposits with lower betas and longer average lives, as well as a change in loan prepayments.
Certain shortcomings are inherent in the methodology used in the EVE and net interest income IRR measurements. The model requires the making of certain assumptions which may tend to oversimplify the manner in which actual yields and costs respond to changes in market interest rates. First, the model assumes that the composition of the Company’s interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured. Second, the model assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Third, the model does not take into account the Company’s business or strategic plans or any steps it may take to respond to changes in rates. Fourth, prepayment, rate sensitivity, and average life assumptions can have a significant impact on the IRR model results. Lastly, the model utilizes data derived from historical performance. Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates. Given the unique nature of the post-pandemic interest rate environment and the speed with which interest rates have been changing, the projections noted above on the Company’s EVE and net interest income can be expected to significantly differ from actual results.

Item 4.    Controls and Procedures
(a) Disclosure Controls and Procedures
The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. Disclosure controls and procedures are the controls and other procedures that are designed to ensure that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

18

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
March 31, December 31,
2024 2023
  (Unaudited)  
Assets
Cash and due from banks $ 130,422  $ 153,718 
Debt securities available-for-sale, at estimated fair value 744,944  753,892 
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,058 at March 31, 2024 and $1,133 at December 31, 2023 (estimated fair value of $1,029,965 at March 31, 2024 and $1,068,438 at December 31, 2023)
1,128,666  1,159,735 
Equity investments 103,201  100,163 
Restricted equity investments, at cost 85,689  93,766 
Loans receivable, net of allowance for loan credit losses of $67,173 at March 31, 2024 and $67,137 at December 31, 2023
10,068,209  10,136,721 
Loans held-for-sale 4,702  5,166 
Interest and dividends receivable 52,502  51,874 
Premises and equipment, net 119,211  121,372 
Bank owned life insurance 266,615  266,498 
Assets held for sale 28  28 
Goodwill 506,146  506,146 
Core deposit intangible 8,669  9,513 
Other assets 199,974  179,661 
Total assets $ 13,418,978  $ 13,538,253 
Liabilities and Stockholders’ Equity
Deposits $ 10,236,851  $ 10,434,949 
Federal Home Loan Bank (“FHLB”) advances 658,436  848,636 
Securities sold under agreements to repurchase with customers 66,798  73,148 
Other borrowings 425,722  196,456 
Advances by borrowers for taxes and insurance 28,187  22,407 
Other liabilities 337,147  300,712 
Total liabilities 11,753,141  11,876,308 
Stockholders’ equity:
Preferred stock, $0.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, and 57,370 shares issued at both March 31, 2024 and December 31, 2023
Common stock, $0.01 par value, 150,000,000 shares authorized, 62,505,408 and 62,182,767 shares issued at March 31, 2024 and December 31, 2023, respectively; and 58,812,498 and 59,447,684 shares outstanding at March 31, 2024 and December 31, 2023, respectively
613  613 
Additional paid-in capital 1,163,282  1,161,755 
Retained earnings 608,355  592,542 
Accumulated other comprehensive loss (19,415) (20,862)
Less: Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") (3,470) (3,780)
Treasury stock, 3,692,910 and 2,735,083 shares at March 31, 2024 and December 31, 2023, respectively
(84,254) (69,106)
OceanFirst Financial Corp. stockholders’ equity 1,665,112  1,661,163 
Non-controlling interest 725  782 
Total stockholders’ equity 1,665,837  1,661,945 
Total liabilities and stockholders’ equity $ 13,418,978  $ 13,538,253 

See accompanying Notes to Unaudited Consolidated Financial Statements.
19

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
  For the Three Months Ended March 31,
  2024 2023
  (Unaudited)
Interest income:
Loans $ 137,121  $ 121,720 
Debt securities 19,861  14,286 
Equity investments and other 4,620  3,028 
Total interest income 161,602  139,034 
Interest expense:
Deposits 59,855  21,330 
Borrowed funds 15,523  18,902 
Total interest expense 75,378  40,232 
Net interest income 86,224  98,802 
Provision for credit losses 591  3,013 
Net interest income after provision for credit losses 85,633  95,789 
Other income:
Bankcard services revenue 1,416  1,330 
Trust and asset management revenue 526  612 
Fees and service charges 4,473  5,159 
Net gain on sales of loans 357  20 
Net gain (loss) on equity investments 1,923  (6,801)
Income from bank owned life insurance 1,862  1,281 
Commercial loan swap income 138  701 
Other 1,591  (229)
Total other income 12,286  2,073 
Operating expenses:
Compensation and employee benefits 32,759  33,920 
Occupancy 5,199  5,239 
Equipment 1,130  1,205 
Marketing 990  982 
Federal deposit insurance and regulatory assessments 3,135  1,749 
Data processing 5,956  6,154 
Check card processing 1,050  1,281 
Professional fees 2,732  5,098 
Amortization of core deposit intangible 844  1,027 
Branch consolidation expense, net —  70 
Merger related expenses —  22 
Other operating expense 4,877  4,562 
Total operating expenses 58,672  61,309 
Income before provision for income taxes 39,247  36,553 
Provision for income taxes 10,637  8,654 
Net income 28,610  27,899 
Net (loss) income attributable to non-controlling interest (57) 16 
Net income attributable to OceanFirst Financial Corp. 28,667  27,883 
Dividends on preferred shares 1,004  1,004 
Net income available to common stockholders $ 27,663  $ 26,879 
Basic earnings per share $ 0.47  $ 0.46 
Diluted earnings per share $ 0.47  $ 0.46 
Average basic shares outstanding 58,789  58,774 
Average diluted shares outstanding 58,791  58,918 
See accompanying Notes to Unaudited Consolidated Financial Statements.
20

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
 
  For the Three Months Ended March 31,
  2024 2023
  (Unaudited)
Net income $ 28,610  $ 27,899 
Other comprehensive income:
Net unrealized gain on debt securities (net of tax expense of $634 in 2024 and $1,766 in 2023)
1,993  5,547 
Accretion of unrealized loss on debt securities reclassified to held-to-maturity (net of tax expense of $42 in 2024 and $56 in 2023)
61  79 
Unrealized (loss) gain on derivative hedges (net of tax benefit of $302 in 2024 and tax expense of $131 in 2023)
(949) 412 
Reclassification adjustment for losses included in net income (net of tax expense of $109 in 2024 and $201 in 2023)
342  629 
Total other comprehensive income, net of tax 1,447  6,667 
Total comprehensive income 30,057  34,566 
Less: comprehensive (loss) income attributable to non-controlling interest (57) 16 
Comprehensive income attributable to OceanFirst Financial Corp. 30,114  34,550 
Less: Dividends on preferred shares 1,004  1,004 
Total comprehensive income available to common stockholders $ 29,110  $ 33,546 
See accompanying Notes to Unaudited Consolidated Financial Statements.
21


OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(dollars in thousands, except per share amounts)
(Unaudited)
For the Three Months Ended March 31, 2024 and 2023
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Employee
Stock
Ownership
Plan
Treasury
Stock
Non-Controlling Interest Total
Balance at December 31, 2022 $ $ 612  $ 1,154,821  $ 540,507  $ (35,982) $ (6,191) $ (69,106) $ 802  $ 1,585,464 
Net income —  —  —  27,883  —  —  —  16  27,899 
Other comprehensive income, net of tax —  —  —  —  6,667  —  —  —  6,667 
Stock compensation —  —  1,828  —  —  —  —  —  1,828 
Allocation of ESOP stock —  —  61  —  —  603  —  —  664 
Cash dividend $0.20 per share
—  —  —  (11,755) —  —  —  —  (11,755)
Exercise of stock options —  1,297  (690) —  —  —  —  608 
Preferred stock dividend —  —  —  (1,004) —  —  —  —  (1,004)
Balance at March 31, 2023 $ $ 613  $ 1,158,007  $ 554,941  $ (29,315) $ (5,588) $ (69,106) $ 818  $ 1,610,371 
Balance at December 31, 2023 $ $ 613  $ 1,161,755  $ 592,542  $ (20,862) $ (3,780) $ (69,106) $ 782  $ 1,661,945 
Net income —  —  —  28,667  —  —  —  (57) 28,610 
Other comprehensive income, net of tax —  —  —  —  1,447  —  —  —  1,447 
Stock compensation —  —  1,541  —  —  —  —  —  1,541 
Allocation of ESOP stock —  —  (43) —  —  310  —  —  267 
Cash dividend $0.20 per share
—  —  —  (11,850) —  —  —  —  (11,850)
Repurchase of 957,827 shares of common stock
—  —  29  —  —  —  (15,148) —  (15,119)
Preferred stock dividend —  —  —  (1,004) —  —  —  —  (1,004)
Balance at March 31, 2024 $ $ 613  $ 1,163,282  $ 608,355  $ (19,415) $ (3,470) $ (84,254) $ 725  $ 1,665,837 
See accompanying Notes to Unaudited Consolidated Financial Statements.
22

OceanFirst Financial Corp.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
  For the Three Months Ended March 31,
  2024 2023
  (Unaudited)
Cash flows from operating activities:
Net income $ 28,610  $ 27,899 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment 2,869  3,094 
Allocation of ESOP stock 267  664 
Stock compensation 1,541  1,828 
Net excess tax expense on stock compensation 365  250 
Amortization of servicing asset 19  15 
Net premium amortization in excess of discount accretion on securities 14  1,093 
Net amortization of deferred costs on borrowings 152  147 
Amortization of core deposit intangible 844  1,027 
Net accretion of purchase accounting adjustments (947) (1,267)
Net amortization of deferred fees/costs and premiums/discounts on loans (588) (138)
Provision for credit losses 591  3,013 
Net gain on sale of fixed assets —  (6)
Net loss on sales of available-for-sale securities 110  697 
Net (gain) loss on equity investments (1,923) 6,801 
Net gain on sales of loans (357) (20)
Proceeds from sales of residential loans held for sale 30,322  3,881 
Residential loans originated for sale (29,501) (5,056)
Increase in value of bank owned life insurance (1,862) (1,281)
Increase in interest and dividends receivable (628) (2,638)
Deferred tax provision (benefit) 1,422  (16)
(Increase) decrease in other assets (20,997) 23,221 
Increase (decrease) in other liabilities 35,789  (38,834)
Total adjustments 17,502  (3,525)
Net cash provided by operating activities 46,112  24,374 
Cash flows from investing activities:
Net decrease (increase) in loans receivable 69,501  (120,505)
Purchase of debt securities available-for-sale (6,628) (4,287)
Purchase of debt securities held-to-maturity (1,994) (55,444)
Purchase of equity investments (1,282) (6,736)
Proceeds from maturities and calls of debt securities available-for-sale 5,610  15,500 
Proceeds from maturities and calls of debt securities held-to-maturity 9,002  6,980 
Proceeds from sales of debt securities available-for-sale 390  1,300 
Proceeds from sale of equity investments —  661 
Principal repayments on debt securities available-for-sale 12,491  — 
Principal repayments on debt securities held-to-maturity 24,371  24,273 
Proceeds from bank owned life insurance 1,745  230 
Proceeds from the redemption of restricted equity investments 20,850  58,129 
Purchases of restricted equity investments (12,773) (64,596)
Purchases of premises and equipment (680) (2,153)
Net cash provided by (used in) investing activities 120,603  (146,648)
23

OceanFirst Financial Corp.
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
(dollars in thousands)
  For the Three Months Ended March 31,
  2024 2023
  (Unaudited)
Cash flows from financing activities:
(Decrease) increase in deposits $ (198,053) $ 317,973 
(Decrease) increase in short-term borrowings (6,373) 1,814 
Net (repayment) proceeds from FHLB advances (190,200) 135,400 
Net proceeds from other borrowings 229,000  — 
Increase in advances by borrowers for taxes and insurance 5,780  9,793 
Exercise of stock options —  608 
Payment of employee taxes withheld from stock awards and phantom stock units (2,192) (2,308)
Purchase of treasury stock (15,119) — 
Dividends paid (12,854) (12,759)
Net cash (used in) provided by financing activities (190,011) 450,521 
Net (decrease) increase in cash and due from banks and restricted cash (23,296) 328,247 
Cash and due from banks and restricted cash at beginning of period 153,718  167,986 
Cash and due from banks and restricted cash at end of period $ 130,422  $ 496,233 
Supplemental Disclosure of Cash Flow Information:
Cash and due from banks at beginning of period $ 153,718  $ 167,946 
Restricted cash at beginning of period —  40 
Cash and due from banks and restricted cash at beginning of period $ 153,718  $ 167,986 
Cash and due from banks at end of period $ 130,422  $ 496,193 
Restricted cash at end of period —  40 
Cash and due from banks and restricted cash at end of period $ 130,422  $ 496,233 
Cash paid during the period for:
Interest $ 62,818  $ 33,914 
Income taxes 1,898  1,268 
Non-cash activities:
Accretion of unrealized loss on securities reclassified to held-to-maturity 103  135 
Net loan charge-offs (recoveries) 349  (47)
Transfer of securities from held-to-maturity to available-for-sale 500  — 

See accompanying Notes to Unaudited Consolidated Financial Statements.
24

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements


Note 1. Basis of Presentation
The consolidated financial statements include the accounts of: OceanFirst Financial Corp. (the “Company”); its wholly-owned subsidiaries, OceanFirst Bank N.A. (the “Bank”) and OceanFirst Risk Management, Inc.; the Bank’s direct and indirect wholly-owned subsidiaries, OceanFirst REIT Holdings, Inc., OceanFirst Management Corp., OceanFirst Realty Corp., Casaba Real Estate Holdings Corporation, and Country Property Holdings, Inc; and a majority controlling interest in Trident Abstract Title Agency, LLC (“Trident”). All significant intercompany accounts and transactions have been eliminated in consolidation.
The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results of operations that may be expected for the full year 2024 or any other period. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and the results of operations for the periods presented. Actual results could differ from these estimates.
Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

25

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 2. Earnings per Share
The following reconciles shares outstanding for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands):
Three Months Ended
March 31,
  2024 2023
Weighted average shares outstanding 59,207  59,291 
Less: Unallocated ESOP shares (189) (302)
 Unallocated incentive award shares (229) (215)
Average basic shares outstanding 58,789  58,774 
Add: Effect of dilutive securities:
Incentive awards 144 
Average diluted shares outstanding 58,791  58,918 
For the three months ended March 31, 2024 and 2023, antidilutive stock options of 1,801,000 and 852,000, respectively, were excluded from the earnings per share calculation.
26

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 3. Securities
The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities available-for-sale and held-to-maturity at March 31, 2024 and December 31, 2023 are as follows (in thousands):
Amortized
Cost (1)
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
Allowance for Securities Credit Losses
At March 31, 2024
Debt securities available-for-sale:
U.S. government and agency obligations $ 65,818  $ —  $ (6,166) $ 59,652  $ — 
Corporate debt securities 11,831  17  (1,178) 10,670  — 
Asset-backed securities 289,632  113  (1,619) 288,126  — 
Mortgage-backed securities (“MBS”):
Agency residential 291,759  1,460  (12) 293,207  — 
Agency commercial 109,352  —  (16,063) 93,289  — 
Total mortgage-backed securities 401,111  1,460  (16,075) 386,496  — 
Total debt securities available-for-sale $ 768,392  $ 1,590  $ (25,038) $ 744,944  $ — 
Debt securities held-to-maturity:
State and municipal debt obligations $ 213,231  $ 188  $ (15,535) $ 197,884  $ (36)
Corporate debt securities 66,583  192  (3,543) 63,232  (916)
Mortgage-backed securities:
Agency residential 747,094  178  (75,407) 671,865  — 
Agency commercial 82,208  (4,312) 77,898  — 
Non-agency commercial 20,608  —  (1,522) 19,086  (106)
Total mortgage-backed securities 849,910  180  (81,241) 768,849  (106)
Total debt securities held-to-maturity $ 1,129,724  $ 560  $ (100,319) $ 1,029,965  $ (1,058)
Total debt securities $ 1,898,116  $ 2,150  $ (125,357) $ 1,774,909  $ (1,058)
At December 31, 2023
Debt securities available-for-sale:
U.S. government and agency obligations $ 66,490  $ —  $ (5,796) $ 60,694  $ — 
Corporate debt securities 10,096  11  (981) 9,126  — 
Asset-backed securities 295,796  —  (4,252) 291,544  — 
Mortgage-backed securities:
Agency residential 298,107  183  (97) 298,193  — 
Agency commercial 109,590  —  (15,255) 94,335  — 
Total mortgage-backed securities 407,697  183  (15,352) 392,528  — 
Total debt securities available-for-sale $ 780,079  $ 194  $ (26,381) $ 753,892  $ — 
Debt securities held-to-maturity:
State, municipal, and sovereign debt obligations $ 222,009  $ 251  $ (14,550) $ 207,710  $ (39)
Corporate debt securities 69,809  391  (3,941) 66,259  (987)
Mortgage-backed securities:
Agency residential 765,632  901  (70,040) 696,493  — 
Agency commercial 82,734  10  (3,678) 79,066  — 
Non-agency commercial 20,684  —  (1,774) 18,910  (107)
Total mortgage-backed securities 869,050  911  (75,492) 794,469  (107)
Total debt securities held-to-maturity $ 1,160,868  $ 1,553  $ (93,983) $ 1,068,438  $ (1,133)
Total debt securities $ 1,940,947  $ 1,747  $ (120,364) $ 1,822,330  $ (1,133)

27

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity for the three months ended March 31, 2024 and 2023 (in thousands):
Three Months Ended March 31,
2024 2023
Allowance for securities credit losses
Beginning balance $ (1,133) $ (1,128)
Benefit for credit losses 75  85 
Total ending allowance balance $ (1,058) $ (1,043)
The Company monitors the credit quality of debt securities held-to-maturity on a quarterly basis through the use of internal credit analysis supplemented by external credit ratings. Credit ratings of BBB- or Baa3 or higher are considered investment grade. Where multiple ratings are available, the Company considers the lowest rating when determining the allowance for securities credit losses. Under this approach, the amortized cost of debt securities held-to-maturity at March 31, 2024, aggregated by credit quality indicator, are as follows (in thousands):
Investment Grade Non-Investment Grade/Non-rated Total
As of March 31, 2024
State and municipal debt obligations $ 213,231  $ —  $ 213,231 
Corporate debt securities 53,047  13,536  66,583 
Non-agency commercial MBS 20,608  —  20,608 
Total debt securities held-to-maturity $ 286,886  $ 13,536  $ 300,422 
There were $110,000 and $697,000 of realized losses on sale of debt securities available-for-sale for the three months ended March 31, 2024 and 2023, respectively. These realized gains/losses on debt securities are presented within Other under Total other income of the Consolidated Statements of Income.
The amortized cost and estimated fair value of debt securities at March 31, 2024 by contractual maturity are shown below (in thousands):
March 31, 2024 Amortized
Cost
Estimated
Fair Value
Less than one year $ 32,582  $ 32,182 
Due after one year through five years 194,788  180,665 
Due after five years through ten years 194,267  189,112 
Due after ten years 225,458  217,605 
$ 647,095  $ 619,564 
Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At March 31, 2024, corporate debt securities, state and municipal obligations, and asset-backed securities with an amortized cost of $77.4 million, $60.8 million, and $289.6 million, respectively, and an estimated fair value of $72.9 million, $59.0 million, and $288.1 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.
28

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at March 31, 2024 and December 31, 2023, segregated by the duration of the unrealized losses, are as follows (in thousands):
  Less than 12 months 12 months or longer Total
  Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
At March 31, 2024
Debt securities available-for-sale:
U.S. government and agency obligations $ 5,383  $ (14) $ 54,269  $ (6,152) $ 59,652  $ (6,166)
Corporate debt securities 1,432  (25) 7,496  (1,153) 8,928  (1,178)
Asset-backed securities 9,291  (9) 216,864  (1,610) 226,155  (1,619)
MBS:
Agency residential 23,921  (12) —  —  23,921  (12)
Agency commercial —  —  93,289  (16,063) 93,289  (16,063)
Total MBS 23,921  (12) 93,289  (16,063) 117,210  (16,075)
Total debt securities available-for-sale 40,027  (60) 371,918  (24,978) 411,945  (25,038)
Debt securities held-to-maturity:
State and municipal debt obligations 2,675  (30) 185,307  (15,505) 187,982  (15,535)
Corporate debt securities 2,996  (568) 57,739  (2,975) 60,735  (3,543)
MBS:
Agency residential 104,295  (1,702) 530,150  (73,705) 634,445  (75,407)
Agency commercial 19,736  (440) 57,153  (3,872) 76,889  (4,312)
Non-agency commercial —  —  19,086  (1,522) 19,086  (1,522)
Total MBS 124,031  (2,142) 606,389  (79,099) 730,420  (81,241)
Total debt securities held-to-maturity 129,702  (2,740) 849,435  (97,579) 979,137  (100,319)
Total debt securities $ 169,729  $ (2,800) $ 1,221,353  $ (122,557) $ 1,391,082  $ (125,357)
At December 31, 2023
Debt securities available-for-sale:
U.S. government and agency obligations $ 833  $ (2) $ 59,861  $ (5,794) $ 60,694  $ (5,796)
Corporate debt securities 1,543  (165) 6,116  (816) 7,659  (981)
Asset-backed securities —  —  291,544  (4,252) 291,544  (4,252)
MBS:
Agency residential 169,000  (97) —  —  169,000  (97)
Agency commercial —  —  94,335  (15,255) 94,335  (15,255)
Total MBS 169,000  (97) 94,335  (15,255) 263,335  (15,352)
Total debt securities available-for-sale 171,376  (264) 451,856  (26,117) 623,232  (26,381)
Debt securities held-to-maturity:
State and municipal debt obligations 6,671  (23) 191,511  (14,527) 198,182  (14,550)
Corporate debt securities 3,084  (473) 58,386  (3,468) 61,470  (3,941)
MBS:
Agency residential 95,776  (693) 525,751  (69,347) 621,527  (70,040)
Agency commercial 18,902  (370) 55,051  (3,308) 73,953  (3,678)
Non-agency commercial —  —  18,910  (1,774) 18,910  (1,774)
Total MBS 114,678  (1,063) 599,712  (74,429) 714,390  (75,492)
Total debt securities held-to-maturity 124,433  (1,559) 849,609  (92,424) 974,042  (93,983)
Total debt securities $ 295,809  $ (1,823) $ 1,301,465  $ (118,541) $ 1,597,274  $ (120,364)

The Company concluded that debt securities were not impaired at March 31, 2024 based on consideration of several factors. The Company noted that each issuer made all contractually due payments when required. There were no defaults on principal or interest payments, and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the net unrealized losses were primarily due to changes in the general credit and interest rate environment and not credit quality. Additionally, the Company has not utilized securities sales as a source of liquidity and the Company’s liquidity plans include adequate sources of liquidity outside securities sales.
29

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Equity Investments
At March 31, 2024 and December 31, 2023, the Company held equity investments of $103.2 million and $100.2 million, respectively. The equity investments are primarily comprised of select financial services institutions’ preferred stocks, investments in other financial institutions and funds.
The realized and unrealized gains or losses on equity securities for the three months ended March 31, 2024 and 2023 are shown in the table below (in thousands):
Three Months Ended March 31,
2024 2023
Net gain (loss) on equity investments $ 1,923  $ (6,801)
Less: Net losses recognized on equity investments sold —  (4,608)
Unrealized gains (losses) recognized on equity investments still held $ 1,923  $ (2,193)
30

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 4. Loans Receivable, Net
Loans receivable, net at March 31, 2024 and December 31, 2023 consisted of the following (in thousands):
March 31, December 31,
2024 2023
Commercial:
Commercial real estate – investor $ 5,322,755  $ 5,353,974 
Commercial real estate – owner occupied 914,582  943,891 
Commercial and industrial 677,176  666,532 
Total commercial 6,914,513  6,964,397 
Consumer:
Residential real estate 2,965,276  2,979,534 
Home equity loans and lines and other consumer (“other consumer”) 245,859  250,664 
Total consumer 3,211,135  3,230,198 
Total loans receivable 10,125,648  10,194,595 
Deferred origination costs, net of fees 9,734  9,263 
Allowance for loan credit losses (67,173) (67,137)
Total loans receivable, net $ 10,068,209  $ 10,136,721 
The Company categorizes all loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis. The Company uses the following definitions for risk ratings:
    Pass: Loans classified as Pass are well protected by the paying capacity and net worth of the borrower.
    Special Mention: Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Bank’s credit position at some future date.
    Substandard: Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the collection or the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
    Doubtful: Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

31

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The following tables summarize total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands):
2024 2023 2022 2021 2020 2019 and prior Revolving lines of credit Total
March 31, 2024
Commercial real estate - investor
Pass $ 48,428  $ 136,697  $ 1,170,068  $ 1,327,264  $ 525,806  $ 1,352,769  $ 644,938  $ 5,205,970 
Special Mention —  —  —  2,389  —  42,787  12,695  57,871 
Substandard —  —  —  595  4,535  53,784  —  58,914 
Total commercial real estate - investor 48,428  136,697  1,170,068  1,330,248  530,341  1,449,340  657,633  5,322,755 
Commercial real estate - owner occupied
Pass 12,333  65,173  116,684  98,566  57,582  513,115  23,133  886,586 
Special Mention —  —  —  —  —  8,705  —  8,705 
Substandard —  —  —  —  —  18,672  619  19,291 
Total commercial real estate - owner occupied 12,333  65,173  116,684  98,566  57,582  540,492  23,752  914,582 
Commercial and industrial
Pass 12,487  122,952  65,864  18,212  7,671  55,600  377,278  660,064 
Special Mention —  —  —  —  —  170  2,239  2,409 
Substandard —  —  589  69  —  1,217  12,828  14,703 
Total commercial and industrial 12,487  122,952  66,453  18,281  7,671  56,987  392,345  677,176 
Residential real estate (1)
Pass 43,812  279,313  904,132  555,218  378,827  800,232  —  2,961,534 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  869  —  220  732  1,921  —  3,742 
Total residential real estate 43,812  280,182  904,132  555,438  379,559  802,153  —  2,965,276 
Other consumer (1)
Pass 5,247  31,232  19,401  20,089  12,440  126,222  29,339  243,970 
Special Mention —  —  —  —  —  298  —  298 
Substandard —  —  —  —  —  1,591  —  1,591 
Total other consumer 5,247  31,232  19,401  20,089  12,440  128,111  29,339  245,859 
Total loans $ 122,307  $ 636,236  $ 2,276,738  $ 2,022,622  $ 987,593  $ 2,977,083  $ 1,103,069  $ 10,125,648 
(1)For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.


32

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

2023 2022 2021 2020 2019 2018 and prior Revolving lines of credit Total
December 31, 2023
Commercial real estate - investor
Pass $ 137,028  $ 1,165,955  $ 1,328,012  $ 529,745  $ 490,438  $ 930,337  $ 679,804  $ 5,261,319 
Special Mention —  —  2,413  790  1,446  22,147  —  26,796 
Substandard —  —  648  3,750  13,275  48,186  —  65,859 
Total commercial real estate - investor 137,028  1,165,955  1,331,073  534,285  505,159  1,000,670  679,804  5,353,974 
Commercial real estate - owner occupied
Pass 66,642  120,280  103,104  59,179  102,703  441,713  21,052  914,673 
Special Mention —  —  —  —  1,272  8,314  —  9,586 
Substandard —  —  —  —  2,019  16,900  713  19,632 
Total commercial real estate - owner occupied 66,642  120,280  103,104  59,179  105,994  466,927  21,765  943,891 
Commercial and industrial
Pass 112,914  64,770  19,473  8,645  7,778  51,082  383,013  647,675 
Special Mention —  —  —  —  —  184  2,859  3,043 
Substandard —  622  117  —  145  1,385  13,545  15,814 
Total commercial and industrial 112,914  65,392  19,590  8,645  7,923  52,651  399,417  666,532 
Residential real estate (1)
Pass 283,296  916,153  564,515  388,392  223,247  600,118  —  2,975,721 
Special Mention —  —  —  —  131  271  —  402 
Substandard 323  366  —  258  487  1,977  —  3,411 
Total residential real estate 283,619  916,519  564,515  388,650  223,865  602,366  —  2,979,534 
Other consumer (1)
Pass 32,859  19,918  20,737  12,675  12,937  118,486  30,658  248,270 
Special Mention —  172  —  —  —  386  —  558 
Substandard —  —  —  —  1,698  132  1,836 
Total other consumer 32,859  20,090  20,737  12,675  12,943  120,570  30,790  250,664 
Total loans $ 633,062  $ 2,288,236  $ 2,039,019  $ 1,003,434  $ 855,884  $ 2,243,184  $ 1,131,776  $ 10,194,595 
(1)For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.


33

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)


An analysis of the allowance for credit losses on loans for the three months ended March 31, 2024 and 2023 was as follows (in thousands):
  Commercial
Real Estate –
Investor
Commercial
Real Estate –
Owner
Occupied
Commercial
and 
Industrial
Residential
Real Estate
Other Consumer Total
For the three months ended March 31, 2024
Allowance for credit losses on loans
Balance at beginning of period $ 27,899  $ 4,354  $ 6,867  $ 27,029  $ 988  $ 67,137 
(Benefit) provision for credit losses (865) (107) 769  579  385 
Charge-offs (1)
(46) —  —  —  (395) (441)
Recoveries 66  15  92 
Balance at end of period $ 26,990  $ 4,251  $ 7,641  $ 27,104  $ 1,187  $ 67,173 
For the three months ended March 31, 2023
Allowance for credit losses on loans
Balance at beginning of period $ 21,070  $ 4,423  $ 5,695  $ 24,530  $ 1,106  $ 56,824 
Provision (benefit) for credit losses 1,379  (304) 131  2,390  (272) 3,324 
Charge-offs (1)
—  (6) (3) —  (1) (10)
Recoveries 40  57 
Balance at end of period $ 22,451  $ 4,116  $ 5,827  $ 26,928  $ 873  $ 60,195 
(1) Gross charge-offs for the three months ended March 31, 2024 of $441,000 included one commercial real estate loan of $46,000, which was originated in 2021. The remainder of the charge-offs were related to loans that were originated prior to 2019. Gross charge-offs for the three months ended March 31, 2023 of $10,000 related to loans that were originated prior to 2018.
A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral and, therefore, is classified as non-accruing. At March 31, 2024 and December 31, 2023, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $16.0 million and $15.2 million, respectively, commercial real estate - owner occupied of $3.4 million and $352,000, respectively, and commercial and industrial of $567,000 and $304,000, respectively. In addition, the Company had residential and consumer loans collateralized by residential real estate, which are in the process of foreclosure, with an amortized cost balance of $2.3 million and $2.6 million at March 31, 2024 and December 31, 2023, respectively. 
The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of March 31, 2024 and December 31, 2023 (in thousands):
March 31, December 31,
2024 2023
Commercial real estate – investor (1)
$ 21,507  $ 20,820 
Commercial real estate – owner occupied 3,355  351 
Commercial and industrial 567  304 
Residential real estate 7,181  5,542 
Other consumer 2,401  2,531 
$ 35,011  $ 29,548 
(1) At March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.

At March 31, 2024 and December 31, 2023, non-accrual loans were included in the allowance for credit loss calculation and the Company did not recognize or accrue interest income on these loans. At March 31, 2024 and December 31, 2023, there were no loans that were past due 90 days or greater and still accruing interest.
34

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The following table presents the aging of the recorded investment in past due loans as of March 31, 2024 and December 31, 2023 by loan portfolio segment (in thousands):
30-59
Days
Past Due
60-89
Days
Past Due
90 Days or Greater Past Due Total
Past Due
Loans Not
Past Due
Total
March 31, 2024
Commercial real estate – investor (1)
$ 4,746  $ —  $ 16,004  $ 20,750  $ 5,302,005  $ 5,322,755 
Commercial real estate – owner occupied 531  368  318  1,217  913,365  914,582 
Commercial and industrial —  567  570  676,606  677,176 
Residential real estate 10,793  —  3,742  14,535  2,950,741  2,965,276 
Other consumer 795  298  1,591  2,684  243,175  245,859 
$ 16,868  $ 666  $ 22,222  $ 39,756  $ 10,085,892  $ 10,125,648 
December 31, 2023
Commercial real estate – investor (1)
$ 978  $ 684  $ 15,201  $ 16,863  $ 5,337,111  $ 5,353,974 
Commercial real estate – owner occupied 335  352  293  980  942,911  943,891 
Commercial and industrial 163  —  145  308  666,224  666,532 
Residential real estate 14,858  402  3,411  18,671  2,960,863  2,979,534 
Other consumer 872  558  1,836  3,266  247,398  250,664 
$ 17,206  $ 1,996  $ 20,886  $ 40,088  $ 10,154,507  $ 10,194,595 
(1) At March 31, 2024 and December 31, 2023, 90 days or greater past due loans included the remaining exposure of $8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.
35

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)


Loan Modifications to Borrowers Experiencing Financial Difficulty
The Company adopted Accounting Standards Update (“ASU”) 2022-02 on January 1, 2023. Since adoption, the Company has modified and may modify in the future certain loans to borrowers experiencing financial difficulty. These modifications may include a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay. 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 March 31, 2024 and December 31, 2023, loans with modifications to borrowers experiencing financial difficulty totaled $12.0 million and $8.9 million, respectively. There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of March 31, 2024 or December 31, 2023.
The following table presents loans modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023 (in thousands):
Term Extension Combination of Term Extension and Interest Rate Reduction Other Than Insignificant Payment Delay Total % of Total by Loan Portfolio Segment
For the three months ended March 31, 2024
Commercial real estate – owner occupied $ —  $ —  $ 2,994  $ 2,994  0.33  %
Residential real estate 129  —  —  129  — 
Other consumer —  148  —  148  0.06 
$ 129  $ 148  $ 2,994  $ 3,271  —  %
For the three months ended March 31, 2023
Residential real estate $ 435  $ —  $ —  $ 435  0.02  %
Other consumer 40  —  —  40  0.02 
$ 475  $ —  $ —  $ 475  —  %
The modifications during the periods presented had an insignificant financial effect on the Company.
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table provides the performance of loans modified to borrowers experiencing financial difficulty during the twelve months ended March 31, 2024 and since adoption of the standard for March 31, 2023 (in thousands):
Current 60 - 89 Days past due 90 Days or Greater past due Total
March 31, 2024
Commercial real estate – investor $ 7,758  $ —  $ —  $ 7,758 
Commercial real estate – owner occupied 2,994  —  —  2,994 
Residential real estate 258  —  153 
(1)
411 
Other consumer 419  —  —  419 
$ 11,429  $ —  $ 153  $ 11,582 
March 31, 2023
Residential real estate $ 297  $ 138  $ —  $ 435 
Other consumer 40  —  —  40 
$ 337  $ 138  $ —  $ 475 
(1) Represents one residential loan that defaulted during the period and had been modified within the previous 12 months. There were no such loans that defaulted during the three months ended March 31, 2023.

36

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 5. Deposits
The major types of deposits at March 31, 2024 and December 31, 2023 were as follows (in thousands):
Type of Account March 31, December 31,
2024 2023
Non-interest-bearing $ 1,639,828  $ 1,657,119 
Interest-bearing checking 3,865,699  3,911,766 
Money market deposit 1,150,979  1,021,805 
Savings 1,260,309  1,398,837 
Time deposits 2,320,036  2,445,422 
Total deposits $ 10,236,851  $ 10,434,949 
Included in time deposits at March 31, 2024 and December 31, 2023 was $373.9 million and $412.0 million, respectively, of deposits of $250,000 or more. Time deposits also include brokered deposits of $543.4 million and $631.5 million at March 31, 2024 and December 31, 2023, respectively.
Note 6. Borrowed Funds
Borrowed funds at March 31, 2024 and December 31, 2023 were as follows (in thousands):
March 31, December 31,
2024 2023
FHLB advances $ 658,436  $ 848,636 
Securities sold under agreements to repurchase with customers 66,798  73,148 
Other borrowings 425,722  196,456 
Total borrowed funds $ 1,150,956  $ 1,118,240 
At March 31, 2024, there were $608.6 million of short-term advances and $49.8 million outstanding in overnight borrowings from the FHLB, as compared to $848.6 million and $0 at December 31, 2023, respectively.
At March 31, 2024, there were $425.7 million of other borrowings as compared to $196.5 million at December 31, 2023 due to a shift in funding sources from FHLB to other borrowings.
Pledged assets
The following table presents the assets pledged to secure borrowings, borrowing capacity, repurchase agreements, letters of credit, and for other purposes required by law at carrying value (in thousands):
Loans Debt securities Total
March 31, 2024
FHLB and FRB $ 7,336,405  $ 1,244,634  $ 8,581,039 
Repurchase agreements —  101,526  101,526 
Total pledged assets $ 7,336,405  $ 1,346,160  $ 8,682,565 
December 31, 2023
FHLB and FRB $ 7,255,671  $ 1,051,558  $ 8,307,229 
Repurchase agreements —  103,416  103,416 
Total pledged assets $ 7,255,671  $ 1,154,974  $ 8,410,645 

The securities pledged, which collateralize the repurchase agreements are delivered to the lender, with whom each transaction is executed, or to a third-party custodian. The lender, who may sell, loan or otherwise dispose of such securities to other parties in the normal course of their operations, agrees to resell to the Company substantially the same securities at the maturity of the repurchase agreements.
37

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 7. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact.
The Company uses valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability and developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability and developed based on the best information available in the circumstances. In that regard, a fair value hierarchy has been established for valuation inputs that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlations or other means.
Level 3 Inputs – Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities.
Assets and Liabilities Measured at Fair Value
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis, that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
Debt Securities Available-for-Sale
Debt securities classified as available-for-sale are reported at fair value. Fair value of U.S. Treasuries are determined using quoted prices in active markets (Level 1). The majority of the other debt securities are determined using inputs other than quoted prices that are based on market observable information (Level 2). Level 2 debt securities are priced through third-party pricing services or security industry sources that actively participate in the buying and selling of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing is a mathematical technique used principally to value certain debt securities without relying exclusively on quoted prices for the specific securities, but comparing the debt securities to benchmark or comparable debt securities.
Equity Investments
Equity investments with readily determinable fair value are reported at fair value. Fair value for these investments is primarily determined using a quoted price in an active market or exchange (Level 1) or using inputs other than quoted prices that are based on market observable information (Level 2). Equity investments without readily determinable fair values are carried at cost less impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer (measurement alternative). Certain equity investments without readily determinable fair values are measured at net asset value (“NAV”) per share as a practical expedient, which are excluded from the fair value hierarchy levels in the table below.
38

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Interest Rate Derivatives
The Company’s interest rate swaps and cap contracts are reported at fair value utilizing discounted cash flow models provided by an independent, third-party and observable market data (Level 2). When entering into an interest rate swap or cap contract, the Company is exposed to fair value changes due to interest rate movements, and also the potential nonperformance of the contract counterparty.
Loans Individually Measured for Impairment
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.
The following table summarizes financial assets and financial liabilities measured at fair value as of March 31, 2024 and December 31, 2023, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):
    Fair Value Measurements at Reporting Date Using:
Total Fair
Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
March 31, 2024
Items measured on a recurring basis:
Debt securities available-for-sale
$ 744,944  $ 46,989  $ 697,955  $ — 
Equity investments
54,788  —  54,788  — 
Interest rate derivative asset 104,149  —  104,149  — 
Interest rate derivative liability (105,118) —  (105,118) — 
Items measured on a non-recurring basis:
Equity investments (1) (2)
48,413  —  —  44,738 
Loans measured for impairment based on the fair value of the underlying collateral (3)
22,206  —  —  22,206 
December 31, 2023
Items measured on a recurring basis:
Debt securities available-for-sale
$ 753,892  $ 43,036  $ 710,856  $ — 
Equity investments
53,166  —  53,166  — 
Interest rate derivative asset 87,776  —  87,776  — 
Interest rate derivative liability (87,848) —  (87,848) — 
Items measured on a non-recurring basis:
Equity investments (1) (2)
46,997  —  —  43,576 
Loans measured for impairment based on the fair value of the underlying collateral (3)
18,509  —  —  18,509 
(1)    As of March 31, 2024 and December 31, 2023, equity investments of $48.4 million and $47.0 million, respectively, included $44.7 million and $43.6 million, respectively, of equity investments measured under the measurement alternative. This included no unrealized gains or losses for the three months ended March 31, 2024 and the year ended December 31, 2023.
(2)    As of March 31, 2024 and December 31, 2023, equity investments of $48.4 million and $47.0 million, respectively, included $3.7 million and $3.4 million, respectively, of certain equity investment funds measured at NAV per share (or its equivalent) as a practical expedient to fair value and these equity investments have not been classified in the fair value hierarchy levels.
(3) Primarily consists of commercial loans, which are collateral dependent. The range may vary but is generally 0% to 8% on the discount for costs to sell and 0% to 10% on appraisal adjustments.

The Company recognizes transfers between levels of the valuation hierarchy at the end of the applicable reporting periods. There were no assets in Level 3 that were recognized at fair value on a recurring basis or transfers into or out of Level 3 for the three months ended March 31, 2024 and 2023.

39

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Assets and Liabilities Disclosed at Fair Value
A description of the valuation methodologies used for assets and liabilities disclosed at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy is set forth below.
Cash and Due from Banks
For cash and due from banks, the carrying amount approximates fair value.
Debt Securities Held-to-Maturity
Debt securities classified as held-to-maturity are carried at amortized cost, as the Company has the positive intent and ability to hold these debt securities to maturity. The Company determines the fair value of the debt securities utilizing Level 2 inputs. Most of the Company’s debt securities are fixed income instruments that are not quoted on an exchange, but are bought and sold in active markets. Prices for these instruments are obtained through third-party pricing vendors or security industry sources that actively participate in the buying and selling of debt securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing is a mathematical technique used principally to value certain debt securities without relying exclusively on quoted prices for the specific debt securities, but comparing the debt securities to benchmark or comparable debt securities.
Management’s policy is to obtain and review all available documentation from the third-party pricing service relating to their fair value determinations, including their methodology and summary of inputs. Management reviews this documentation, makes inquiries of the third-party pricing service and decides as to the level of the valuation inputs. Based on the Company’s review of the available documentation from the third-party pricing service, management concluded that Level 2 inputs were utilized for all securities.
Restricted Equity Investments
The fair value of these investments, which are primarily Federal Home Loan Bank of New York and Federal Reserve Bank stock, is its carrying value since this is the amount for which it could be redeemed. There is no active market for this stock and the Company is required to maintain a minimum investment as stipulated by the respective entities.
Loans Receivable and Loans Held-for-Sale
Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential real estate, consumer and commercial. Each loan category is further segmented into fixed and adjustable rate interest terms.
Fair value of performing and non-performing loans, which is based on an exit price notion, was estimated by discounting the future cash flows, net of estimated prepayments, at market discount rates that reflect the credit and interest rate risk inherent in the loan.
Loans held for sale are carried at the lower of unpaid principal balance, net, or estimated fair value on an aggregate basis. Estimated fair value is generally determined based on bid quotations from secondary markets.
Deposits Other than Time Deposits
The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, and interest-bearing checking accounts and money market accounts is, by definition, equal to the amount payable on demand. The related insensitivity of the majority of these deposits to interest rate changes creates a significant inherent value which is not reflected in the fair value reported.
Time Deposits
The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.
Securities Sold Under Agreements to Repurchase with Customers
Fair value approximates the carrying amount as these borrowings are payable on demand and the interest rate adjusts monthly.
FHLB Advances and Other Borrowings
Fair value estimates are based on discounting contractual cash flows using rates which approximate the rates offered for borrowings of similar remaining maturities.
40

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The book value and estimated fair value of the Company’s significant financial instruments not recorded at fair value as of March 31, 2024 and December 31, 2023 are presented in the following tables (in thousands):
    Fair Value Measurements at Reporting Date Using:
Book
Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
March 31, 2024
Financial Assets:
Cash and due from banks $ 130,422  $ 130,422  $ —  $ — 
Debt securities held-to-maturity 1,128,666  —  1,029,965  — 
Restricted equity investments 85,689  —  —  85,689 
Loans receivable, net and loans held-for-sale 10,072,911  —  —  9,486,375 
Financial Liabilities:
Deposits other than time deposits (1)
7,916,815  —  7,916,815  — 
Time deposits 2,320,036  —  2,313,553  — 
FHLB advances and other borrowings 1,084,158  —  1,068,119  — 
Securities sold under agreements to repurchase with customers 66,798  66,798  —  — 
December 31, 2023
Financial Assets:
Cash and due from banks $ 153,718  $ 153,718  $ —  $ — 
Debt securities held-to-maturity 1,159,735  —  1,068,438  — 
Restricted equity investments 93,766  —  —  93,766 
Loans receivable, net and loans held-for-sale 10,141,887  —  —  9,606,498 
Financial Liabilities:
Deposits other than time deposits (1)
7,989,527  —  7,989,527  — 
Time deposits 2,445,422  —  2,421,058  — 
FHLB advances and other borrowings 1,045,092  —  1,008,351  — 
Securities sold under agreements to repurchase with customers 73,148  73,148  —  — 
(1)    The estimated fair value of non-maturity deposits does not consider any inherent value and represents the amount payable on demand. However, non-maturity deposits do contain significant inherent value to the Company, particularly when overnight funding costs are greater than the deposit costs.

Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because a limited market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other significant unobservable inputs. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include premises and equipment, bank owned life insurance, deferred tax assets 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.
41

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 8. Derivatives and Hedging Activities
The Company enters into derivative financial instruments which involve, to varying degrees, interest rate and credit risk. The Company manages these risks as part of its asset and liability management process and through credit policies and procedures, seeking to minimize counterparty credit risk by establishing credit limits and collateral agreements. The Company utilizes derivative financial instruments to accommodate the business needs of its customers as well as to economically hedge the exposure that this creates for the Company. Additionally, the Company enters into certain derivative financial instruments to enhance its ability to manage interest rate risk that exists as part of its ongoing business operations. The Company does not use derivative financial instruments for trading purposes.
Customer Derivatives – Interest Rate Swaps and Cap Contracts
Derivatives Not Designated as Hedging Instruments
The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The Company also enters into interest rate cap contracts that enable commercial loan customers to lock in a cap on a variable-rate commercial loan agreement. This feature prevents the loan from repricing to a level that exceeds the cap contract’s specified interest rate, which serves to hedge the risk from rising interest rates. The Company then enters into an offsetting interest rate cap contract with a third party in order to economically hedge its exposure through the customer agreement.
These interest rate swaps and cap contracts with both the customers and third parties are not designated as hedges under ASC Topic 815, Derivatives and Hedging, therefore changes in fair value are reported in earnings. As the interest rate swaps and cap contracts are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC Topic 820, Fair Value Measurements. The Company recognized gains of $13,000 and losses of $22,000 in commercial loan swap income resulting from the fair value adjustments for the three months ended March 31, 2024 and 2023, respectively.
Derivatives Designated as Hedging Instruments
During 2022, the Company entered into a three-year interest rate swap intended to add stability to its net interest income and to manage its exposure to future interest rate movements associated with a pool of floating rate commercial loans. The swap requires the Company to pay variable-rate amounts indexed to one-month term Secured Overnight Financing Rate (“SOFR”) to the counterparty in exchange for the receipt of fixed-rate amounts at 4.0% from the counterparty. The swap was designated and qualified as a cash flow hedge under ASC Topic 815, Derivatives and Hedging. The changes in the fair value of cash flow hedges are initially reported in other comprehensive income. Amounts are subsequently reclassified from accumulated other comprehensive income to earnings when the hedged transactions occur, specifically within the same line item as the hedged item (interest income). Therefore, a portion of the balance reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are made or received on the Company’s interest rate swaps.
The table below presents the effect on the Company’s accumulated other comprehensive income/loss (“AOCI” or “AOCL”) attributable to the cash flow hedge derivative, net of tax, and the related gains/(losses) reclassified from AOCI into income (in thousands):
Three Months Ended March 31,
2024 2023
AOCL balance at beginning of period, net of tax $ (36) $ (25)
Unrealized (losses) gains recognized in OCI (949) 412 
Losses reclassified from AOCI into interest income 259  101 
(AOCL) AOCI balance at end of period, net of tax $ (726) $ 488 
During the twelve months ending March 31, 2025, the Company estimates that an additional $932,000 will be reclassified as a reduction to interest income.
42

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The table below presents the notional amount and fair value of derivatives designated and not designated as hedging instruments, as well as their location on the Consolidated Statements of Financial Condition (in thousands):
Notional Fair Value
Other assets Other liabilities
As of March 31, 2024
Derivatives Not Designated as Hedging Instruments
Interest rate swaps and cap contracts $ 1,439,968  $ 104,149  $ 104,161 
Derivatives Designated as Cash Flow Hedge
Interest rate swap contract 100,000  —  957 
Total Derivatives $ 1,539,968  $ 104,149  $ 105,118 
As of December 31, 2023
Derivatives Not Designated as Hedging Instruments
Interest rate swaps and cap contracts $ 1,418,276  $ 87,776  $ 87,801 
Derivatives Designated as Cash Flow Hedge
Interest rate swap contract 100,000  —  47 
Total Derivatives $ 1,518,276  $ 87,776  $ 87,848 
Credit Risk-Related Contingent Features
The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by being a party to International Swaps and Derivatives Association agreements with third-party broker-dealers that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. The amount of collateral posted with third parties was $0 at both March 31, 2024 and December 31, 2023. The amount of collateral received from third parties was $106.2 million and $88.3 million at March 31, 2024 and December 31, 2023, respectively. The amount of collateral posted with third parties and received from third parties is deemed to be sufficient to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. The aggregate fair value of all derivative financial instruments in a liability position with credit measure contingencies and entered into with third parties was $105.1 million and $87.8 million at March 31, 2024 and December 31, 2023, respectively.
The interest rate derivatives which the Company executes with the commercial borrowers are collateralized by the borrowers’ commercial real estate financed by the Company.

43

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

Note 9. Leases
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2038. The Company has one existing finance lease, which has a lease term through 2029.
The following table represents the classification of the Company’s Right of Use (“ROU”) assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):
March 31, December 31,
2024 2023
Lease ROU Assets Classification
Operating lease ROU assets Other assets $ 17,963  $ 18,979 
Finance lease ROU asset Premises and equipment, net 1,246  1,304 
Total lease ROU assets $ 19,209  $ 20,283 
Lease Liabilities
Operating lease liabilities (1)
Other liabilities $ 19,060  $ 20,018 
Finance lease liability Other borrowings 1,620  1,685 
Total lease liabilities $ 20,680  $ 21,703 
(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $5.7 million and $5.9 million at March 31, 2024 and December 31, 2023, respectively.
The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception.
March 31, December 31,
2024 2023
Weighted-Average Remaining Lease Term
Operating leases 6.39 years 6.52 years
Finance lease 5.35 years 5.60 years
Weighted-Average Discount Rate
Operating leases 3.03  % 3.02  %
Finance lease 5.63  5.63 






44

OceanFirst Financial Corp.
Notes to Unaudited Consolidated Financial Statements (Continued)

The following table represents lease expenses and other lease information (in thousands):
Three Months Ended March 31,
2024 2023
Lease Expense
Operating lease expense $ 1,159  $ 1,145 
Finance lease expense:
Amortization of ROU assets 58  58 
Interest on lease liabilities (1)
23  26 
Total $ 1,240  $ 1,229 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 1,101  $ 1,139 
Operating cash flows from finance leases 23  26 
Financing cash flows from finance leases 65  61 
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income.
Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):
Finance Lease Operating Leases
For the Year Ending December 31,
2024 $ 262  $ 3,274 
2025 350  4,401 
2026 350  3,833 
2027 350  2,678 
2028 350  1,524 
Thereafter 209  5,545 
Total 1,871  21,255 
Less: Imputed interest (251) (2,195)
Total lease liabilities $ 1,620  $ 19,060 
Note 10. Variable Interest Entity
The Company accounts for Trident as a variable interest entity (“VIE”) under ASC 810, Consolidation, for which the Company is considered the primary beneficiary (i.e. the party that has a controlling financial interest). In accordance with ASC 810, Consolidation, the Company has consolidated Trident’s assets and liabilities.

The summarized financial information for the Company’s consolidated VIE at March 31, 2024 and December 31, 2023 consisted of the following (in thousands):
March 31, 2024 December 31, 2023
Cash and cash equivalents $ 23,365  $ 22,151 
Other assets 551  606 
Total assets 23,916  22,757 
Other liabilities 22,104  20,803 
Net assets $ 1,812  $ 1,954 

45


PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company and the Bank are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings in the aggregate are believed by management to be immaterial to the Company’s financial condition or results of operations.
Item 1A. Risk Factors
For a summary of risk factors relevant to the Company, see Part I, Item 1A, “Risk Factors,” in the 2023 Form 10-K. There have been no material changes to risk factors relevant to the Company’s operations since December 31, 2023. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also adversely affect the business, financial condition or results of operations.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Purchases of Equity Securities
On June 25, 2021, the Company announced the authorization by the Board of Directors to repurchase up to an additional 5% of the Company’s outstanding common stock, or 3.0 million shares. The Company repurchased 957,827 shares of its common stock during the three month period ended March 31, 2024. At March 31, 2024, there were 1,976,611 shares available for repurchase under the Company’s stock repurchase program.

Total Number of
Shares Purchased
Average Price Paid per Share Total Number of
Shares Purchased as Part of Publicly Announced Plan or Program
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plan or
Program
January 1, 2024 through January 31, 2024 63,436  $ 17.67  63,436  2,871,002 
February 1, 2024 through February 29, 2024 390,714  15.76  390,714  2,480,288 
March 1, 2024 through March 31, 2024 503,677  15.29  503,677  1,976,611 
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information

During the three months ended March 31, 2024, no directors or executive officers of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or any “Rule 10b5-1 trading arrangement.”


46

Item 6. Exhibits
 
Exhibit No: Exhibit Description Reference
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed with this document
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed with this document
Certification pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002 Filed with this document
101.0
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements
104.0 Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)



47

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
OceanFirst Financial Corp.
Registrant
DATE: May 2, 2024 /s/ Christopher D. Maher
Christopher D. Maher
Chairman and Chief Executive Officer
DATE: May 2, 2024 /s/ Patrick S. Barrett
Patrick S. Barrett
Executive Vice President and Chief Financial Officer

48
EX-31.1 2 exhibit311q124.htm EX-31.1 Document
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher D. Maher, certify that:
1.I have reviewed this quarterly report on Form 10-Q of OceanFirst Financial Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2024    /s/ Christopher D. Maher
   Christopher D. Maher
   Chairman and Chief Executive Officer
   (principal executive officer)


EX-31.2 3 exhibit312q124.htm EX-31.2 Document
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Patrick S. Barrett, certify that:
1.I have reviewed this quarterly report on Form 10-Q of OceanFirst Financial Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: May 2, 2024 /s/ Patrick S. Barrett
   Patrick S. Barrett
   Executive Vice President and Chief Financial Officer
   (principal financial officer)


EX-32.0 4 exhibit320q124.htm EX-32.0 Document
Exhibit 32.0
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADDED BY SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of OceanFirst Financial Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.To my knowledge the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
 
 
 
/s/ Christopher D. Maher
Christopher D. Maher
Chairman and Chief Executive Officer
May 2, 2024
/s/ Patrick S. Barrett
Patrick S. Barrett
Executive Vice President and Chief Financial Officer
May 2, 2024