Financial Performance - Net income available to common stockholders increased to $27,663 thousand, or $0.47 per diluted share, compared to $26,879 thousand, or $0.46 per diluted share, for the same period last year[14] - Net income available to common stockholders increased to $27.7 million, or $0.47 per diluted share, compared to $26.9 million, or $0.46 per diluted share in the prior year[27] - Other income increased to $12.3 million from $2.1 million, positively impacted by net gains on equity investments and a net gain on the sale of a portion of its trust business[32] - Operating expenses were $58,672 thousand, reflecting disciplined expense control[16] - The dividend payout ratio per common share was 42.55% for the quarter ended March 31, 2024[10] - The Company declared a quarterly cash dividend of $0.20 per share on common stock, payable on May 17, 2024[15] Asset and Liability Management - Total assets decreased to $13,418,978 thousand as of March 31, 2024, from $13,538,253 thousand at December 31, 2023[10] - Total assets decreased by $119.3 million to $13.42 billion, primarily due to decreases in loans and debt securities[23] - Total liabilities decreased by $123.2 million to $11.75 billion, mainly due to lower deposits and a shift in funding mix[24] - Time deposits decreased to $2.32 billion from $2.45 billion, representing a decline of 22.7% of total deposits[24] - The Company maintained a stockholders' equity to total assets ratio of 12.41% as of March 31, 2024, compared to 12.28% as of December 31, 2023[52] Loan Performance - Non-performing loans increased to $35,011 thousand, representing 0.35% of total loans receivable[10] - The total non-performing loans and assets increased to $35,011,000 from $29,548,000 as of December 31, 2023, reflecting a rise of approximately 18.5%[62] - Non-performing loans as a percentage of total loans increased to 0.35% from 0.29%[63] - The allowance for loan credit losses was maintained at 0.66% of total loans, while the allowance as a percentage of total non-performing loans decreased to 191.86% from 227.21%[62] - Special Mention loans rose to $69,283,000 from $40,385,000, primarily due to new downgrades totaling $33.5 million[64] - The level of delinquent loans (30-89 days) decreased to $17,534,000 from $19,202,000, indicating improved asset quality[63] Capital Management - Total stockholders' equity rose to $1,665,837 thousand, up from $1,661,945 thousand in the previous quarter[10] - The capital ratio increased to 11.01%, with book value per share rising to $28.32[16] - The Company's common equity tier one capital ratio increased to 11.01%, up 15 basis points from December 31, 2023, indicating strong capital levels[25] - The Bank's Tier 1 capital to average assets ratio was 9.38% as of March 31, 2024, exceeding the regulatory requirement of 4.00%[51] - The Company performed capital stress tests and maintained adequate capital under all stress scenarios as of March 31, 2024[50] Shareholder Actions - The Company repurchased 957,827 shares totaling $15.1 million during the quarter[16] - For the quarter ended March 31, 2024, the Company repurchased 957,827 shares of common stock totaling $15.1 million[46] - Cash dividends declared and paid during the first three months of 2024 amounted to $11.9 million for common stock and $1.0 million for preferred stock[47] Interest Rate Risk Management - The Asset Liability Committee (ALCO) regularly reviews the Company's interest rate risk position and trends[77] - The Company actively manages interest rate risk through various strategies, including the use of interest rate swaps and managing the maturity profiles of its liabilities[78] - As of March 31, 2024, the Company exhibited modest asset sensitivity with net interest income changes of 3.0% under a 300 basis point rate shock, compared to a decrease of 2.2% as of December 31, 2023[82] - The Economic Value of Equity (EVE) at risk decreased across all rate scenarios from December 31, 2023, to March 31, 2024, primarily due to a shift in deposit mix and changes in loan prepayments[83] - The Company experienced a 4.9% decrease in EVE under a 300 basis point rate shock as of March 31, 2024, compared to a 12.8% decrease at the end of 2023[82] - The model used for EVE and net interest income measurements has inherent shortcomings, including assumptions that may oversimplify actual yield and cost responses to market interest rate changes[84] - The deposit mix shift involved non-maturity deposits with lower betas and longer average lives, impacting the sensitivity results[83] - The Company’s net interest income sensitivity showed a 1.5% increase under a 100 basis point rate shock as of March 31, 2024, compared to a decrease of 0.4% at the end of 2023[82] - The model does not account for the Company's strategic plans or actions in response to interest rate changes, which may affect the accuracy of projections[84] - Prepayment, rate sensitivity, and average life assumptions significantly impact the IRR model results, indicating potential variability in actual outcomes[84] - The Company’s projections on EVE and net interest income are expected to differ significantly from actual results due to the unique post-pandemic interest rate environment[84] - The sensitivity results were partially offset by an increase in overnight borrowings and a reduction in short-term time deposits[82]

Loan and Credit Losses - The Bank's loan allowance for credit losses (ACL) as a percentage of total loans increased to 0.66% in 2023 from 0.57% in 2022[70] - The net charge-offs for the year ended December 31, 2023, amounted to $8.4 million, primarily related to one commercial real estate relationship[72] - The total ACL at the end of 2023 was $67.1 million, up from $56.8 million in 2022[74] - The provision for credit losses for 2023 was $18.7 million, compared to $7.6 million in 2022[72] - The ACL for commercial real estate loans was $32.3 million, representing 48.04% of total ACL as of December 31, 2023[74] Loans and Deposits - The Bank's average net loans outstanding during 2023 were $10,016.9 million, an increase from $9,323.6 million in 2022[73] - The Company's deposits increased by $759.7 million to $10.43 billion at December 31, 2023, compared to $9.68 billion in the prior year[85] - Total uninsured deposits were $5.32 billion at December 31, 2023, representing 15.2% of total deposits, down from 19.6% in the prior year[86] - The average balance of time deposits was $2.44 billion, with an average rate of 3.74%[87] Interest Rates and Securities - The weighted average yield on total debt securities was 4.40% as of December 31, 2023[81] - The total debt securities held by the Bank amounted to $1,940.9 million as of December 31, 2023[81] - The average rate paid on total deposits increased to 1.68% in 2023 from 0.31% in 2022[87] Capital and Regulatory Compliance - As of December 31, 2023, the Company exceeded all regulatory capital requirements, with Tier 1 capital to average assets at 9.31%, compared to the required 4.00%[123] - The Company reported a Common Equity Tier 1 capital ratio of 10.86%, exceeding the required 7.00%[123] - The total capital to risk-weighted assets ratio was 14.10%, above the required 10.50%[123] - The Bank satisfies the criteria to be classified as well-capitalized as of December 31, 2023[145] CRA Evaluation and Compliance - The Bank's CRA Performance Evaluation resulted in a rating of "Needs to Improve," which may restrict certain expansionary activities, including mergers and acquisitions[157] - The Bank's management is committed to addressing deficiencies cited in the CRA evaluation by enhancing compliance staff and implementing corrective actions[157] - The next CRA examination is expected to commence in 2024, covering the evaluation period from 2021 to 2023[159] Employee Diversity and Workforce - As of December 31, 2023, the Bank had 920 employees, with 67% being female and 20% being persons of color[98][103] - The Company is committed to diversity, with 20% of employees being persons of color and 61% of managers being female[103] Financial Performance and Risk Management - The Bank incurred total deposit insurance assessment expenses of $9.9 million in 2023, up from $5.9 million in 2022, primarily due to a special assessment of $1.7 million related to the protection of uninsured depositors[149] - The Company experienced a 12.8% decrease in Economic Value of Equity (EVE) under a 300 basis point interest rate increase scenario as of December 31, 2023[389] - The net interest income sensitivity results indicated that the Company was modestly asset sensitive to falling rates as of December 31, 2023[389] - The Company actively manages interest rate risk through various strategies, including the use of interest rate swaps and managing the investment portfolio[384] Acquisitions and Investments - The Company completed the acquisition of 60% of Trident Abstract Title Agency, LLC for $7.1 million, enhancing its service offerings[93] - The Bank's investment in FHLB New York stock was $53.7 million as of December 31, 2023, down from $69.4 million in 2022[161] - The Bank's total investment in Federal Reserve Bank of Philadelphia stock was $39.7 million at December 31, 2023, compared to $39.5 million in 2022[163] - Dividends received from the Federal Reserve Bank of Philadelphia for 2023 totaled $1.6 million, an increase from $1.3 million in the prior year[165]

Financial Performance - Net income available to common stockholders for Q3 2023 was $19.7 million, down 47.5% from $37.6 million in Q3 2022, resulting in diluted earnings per share of $0.33 compared to $0.64 in the prior year[16]. - For the three months ended September 30, 2023, net income available to common stockholders decreased to $19.7 million, or $0.33 per diluted share, compared to $37.6 million, or $0.64 per diluted share for the same period in 2022[33]. - Other income for Q3 2023 decreased to $10.8 million from $15.2 million in Q3 2022, impacted by lower commercial loan swap income and fees[39]. - Operating expenses increased to $64.5 million in Q3 2023, up from $59.0 million in Q3 2022, primarily due to higher professional fees and compensation expenses[41]. - The effective tax rate for Q3 2023 was 23.9%, slightly down from 24.1% in Q3 2022[43]. Asset and Liability Management - Total assets decreased to $13,498.2 million as of September 30, 2023, from $13,538.9 million in the previous quarter, and increased from $12,683.5 million year-over-year[10]. - Total liabilities rose by $342.1 million to $11.86 billion, with deposits increasing by $858.7 million to $10.53 billion[29]. - Stockholders' equity increased to $1.64 billion, up from $1.59 billion, primarily due to net income net of dividends[31]. - The Company reported a stockholders' equity to total assets ratio of 12.13% as of September 30, 2023, slightly up from 12.10% at December 31, 2022[61]. Loan and Deposit Activity - Total deposits increased by $375.6 million, or 4%, compared to the prior linked quarter, with a loan-to-deposit ratio of 96.10%[18]. - Total loans increased by $205.5 million to $10.12 billion, reflecting strong loan originations[28]. - Time deposits increased to $2.65 billion, representing a 25.2% increase of total deposits[29]. - The loan-to-deposit ratio improved to 96.10% from 102.50%[29]. Credit Quality - Non-performing loans increased to $30.1 million, representing 0.30% of total loans receivable, up from 0.23% in the previous quarter[10]. - The Company recognized a provision for credit losses of $10.3 million in Q3 2023, significantly higher than $1.2 million in the previous quarter[10]. - Provision for credit losses rose to $10.3 million in Q3 2023, compared to $1.0 million in Q3 2022, driven by elevated macroeconomic risks[38]. - The allowance for loan credit losses was $63.9 million, or 0.63% of total loans, as of September 30, 2023, up from $56.8 million, or 0.57% of total loans, at December 31, 2022[63]. - The Company's non-performing loans increased to $30.1 million as of September 30, 2023, compared to $23.3 million at December 31, 2022, reflecting a rise of approximately 29.5%[63]. - Substandard assets increased to $86,597 thousand as of September 30, 2023, compared to $50,776 thousand at December 31, 2022, indicating a significant rise in credit risk[64]. Interest Income and Expense - Net interest income for Q3 2023 was $91.0 million, down from $96.0 million in Q3 2022, reflecting a net interest margin of 2.91%[10]. - Interest income for the three months ended September 30, 2023, increased to $158.4 million, up from $110.5 million in the prior year, driven by a yield increase on average interest-earning assets to 5.08% from 3.88%[35]. - Interest expense increased to $67.4 million for Q3 2023, up from $14.5 million in Q3 2022, reflecting rising rates and a shift to higher-cost deposits[36]. - Net interest income for Q3 2023 decreased to $91.0 million from $96.0 million in Q3 2022, while net interest margin fell to 2.91% from 3.36% year-over-year[37]. Capital Adequacy - The common equity tier 1 capital ratio remained strong at 10.36%, indicating a well-capitalized status[18]. - As of September 30, 2023, the Company maintained Tier 1 capital of $1,200,832 thousand, representing a ratio of 11.62% to risk-weighted assets, exceeding the required 8.50%[60]. - The total capital to risk-weighted assets ratio for the Company was 13.47% as of September 30, 2023, exceeding the required 10.50%[60]. Regulatory and Accounting Updates - The Company adopted certain practical expedients in Topic 848, which did not have a material impact on its consolidated financial statements[76]. - The Company is currently evaluating the impact of ASU 2023-02 on its consolidated financial statements, effective after December 15, 2023[79]. - The Company does not expect ASU 2023-05 to have a material impact on its consolidated financial statements, effective for joint venture formations on or after January 1, 2025[80]. - The Company bypassed the qualitative assessment for goodwill impairment testing and proceeded directly to the quantitative test, which indicated no impairment loss as of August 31, 2023[71]. Risk Management - The Company actively monitors and manages interest rate risk (IRR) through various strategies, including managing loan origination and deposit structures[85]. - The Company’s interest rate sensitivity is monitored using an IRR model that measures changes in EVE and net interest income under various interest rate scenarios[86]. - The Economic Value of Equity (EVE) decreased by 5.8% to $1,259,131 thousand under a 200 basis points rate shock as of September 30, 2023[90]. - The EVE at risk increased in all rising rate scenarios from December 31, 2022, to September 30, 2023, due to rising market rates and increased deposit costs[91].

Financial Performance - Net income available to common stockholders for the quarter ended June 30, 2023, was $26.8 million, down from $28.0 million in the same quarter last year, resulting in diluted earnings per share of $0.45 compared to $0.47[18]. - Net income for the three months ended June 30, 2023, decreased to $26.8 million, or $0.45 per diluted share, compared to $28.0 million, or $0.47 per diluted share, for the same period in 2022[34]. - Net interest income for the quarter was $92,109, a decrease from $98,802 in the previous quarter, impacted by higher cost time deposits[10][17]. - Net interest income for the three and six months ended June 30, 2023 increased to $92.1 million and $190.9 million, respectively, from $90.8 million and $175.0 million in the corresponding prior year periods[38]. - Other income for the three months ended June 30, 2023 increased to $8.9 million, compared to $7.5 million in the prior year, but was adversely impacted by net losses on equity investments of $559,000[40]. - Operating expenses for the three months ended June 30, 2023 increased to $62.9 million, compared to $58.7 million in the prior year, driven by increases in professional fees and compensation expenses[42]. Assets and Liabilities - Total assets as of June 30, 2023, were $13,538,903, a slight decrease from $13,555,175 in the previous quarter and an increase from $12,438,653 a year ago[10]. - Total liabilities increased by $394.2 million to $11.91 billion, with deposits rising by $483.1 million to $10.16 billion[31]. - Total assets increased by $435 million to $13.54 billion from $13.10 billion, driven by higher cash and loans[30]. - Total loans rose by $165.6 million to $10.08 billion, primarily due to commercial loan originations[30]. - The Company maintained elevated on-balance sheet liquidity of $4.0 billion as of June 30, 2023, reflecting precautionary measures taken in response to industry volatility[20][22]. Capital and Equity - The common equity tier 1 capital ratio increased by 19 basis points to 10.21% at June 30, 2023, indicating strong capital levels[20]. - Stockholders' equity per common share increased to $27.37 from $26.81[33]. - The Company maintained a stockholders' equity to total assets ratio of 12.01% as of June 30, 2023, slightly down from 12.10% at December 31, 2022[65]. - The Company satisfied the criteria to be "well-capitalized" under Prompt Corrective Action regulations as of June 30, 2023[65]. Loans and Credit Quality - Non-performing loans as a percentage of total loans receivable remained stable at 0.23% as of June 30, 2023, consistent with the previous quarter[20]. - Total non-performing loans decreased to $22.8 million as of June 30, 2023, from $23.3 million at December 31, 2022, with a non-performing loans ratio of 0.23%[66]. - The allowance for loan credit losses increased to $61.8 million, representing 0.61% of total loans, compared to $56.8 million or 0.57% at December 31, 2022[66]. - The allowance for loan credit losses as a percentage of total non-performing loans was 271.51% as of June 30, 2023, compared to 244.25% at December 31, 2022[66]. - Provision for credit losses for the three and six months ended June 30, 2023 was $1.2 million and $4.2 million, respectively, compared to $1.3 million and $3.1 million for the corresponding prior year periods[39]. Deposits and Funding - Deposits increased by $165.2 million during the quarter, reaching $10,158,337, with a notable shift from non-maturity deposits to time deposits[20]. - Time deposits increased to $2.77 billion, representing a 27.2% increase of total deposits[31]. - The loans-to-deposit ratio improved to 99.3% from 102.5%[31]. - The Company pledged $7.15 billion of loans with the FHLB and FRB to enhance borrowing capacity as of June 30, 2023[53]. Interest Rate Risk Management - The Company is currently evaluating the impact of ASU 2023-02 on its consolidated financial statements, which will be effective after December 15, 2023[75]. - Interest rate risk management strategies include managing loan origination and retention, emphasizing core deposits, and utilizing interest rate swaps[80]. - The Company actively monitors interest rate sensitivity through an IRR model that assesses changes in EVE and net interest income[81]. - The management of interest rate risk is overseen by the Asset Liability Committee (ALCO), which reports regularly to the Board[79]. - The model used for EVE and net interest income measurements has inherent shortcomings, including assumptions that may oversimplify actual market responses[85]. Economic Value of Equity - As of June 30, 2023, the Economic Value of Equity (EVE) decreased by 12.9% to $1,023,376,000 under a 200 basis points interest rate increase scenario[83]. - The net interest income for the same scenario decreased by 3.5% to $391,374,000[83]. - The Company reported a static EVE of $1,174,533,000 with no change in the 0 basis points scenario[83]. - The EVE at risk increased in all rising rate scenarios from December 31, 2022, to June 30, 2023, due to rising market rates and increased deposit costs[84]. - The Company is currently modestly asset sensitive, with changes in sensitivity influenced by floating rate loan growth and a shift in deposit mix[83].

Financial Performance - Net income available to common stockholders for Q1 2023 was $26.9 million, or $0.46 per diluted share, up from $24.8 million, or $0.42 per diluted share, in Q1 2022[17]. - Net income available to common stockholders was $26.9 million, or $0.46 per diluted share, compared to $24.8 million, or $0.42 per diluted share in the prior year[38]. - The effective tax rate was 23.7%, slightly up from 23.6% in the prior year[45]. Assets and Liabilities - Total assets increased to $13.56 billion as of March 31, 2023, compared to $13.10 billion at December 31, 2022, and $12.16 billion at March 31, 2022[10]. - Total assets increased by $451.3 million to $13.56 billion, driven by higher cash and loans[33]. - Total liabilities increased by $426.4 million to $11.94 billion, with deposits rising by $317.9 million to $9.99 billion[34]. - Stockholders' equity increased to $1.61 billion, representing 11.88% of total assets as of March 31, 2023[18]. - The Company maintained a stockholders' equity to total assets ratio of 11.88% as of March 31, 2023[62]. - Total capital to risk-weighted assets ratio was 13.08% for the Company as of March 31, 2023, exceeding the well-capitalized requirement of 10.50%[61]. Income and Interest - Net interest income for Q1 2023 was $98.8 million, an increase of $14.6 million from the prior year, but a decrease of $7.7 million from the previous quarter[20]. - Interest income rose to $139.0 million from $91.0 million, reflecting an increase in average interest-earning assets and higher yield[39]. - Net interest income increased to $98.8 million from $84.2 million, with a net interest margin of 3.34% compared to 3.18%[41]. - The net interest margin was 3.34% for Q1 2023, compared to 3.18% in Q1 2022 and 3.64% in the previous quarter[20]. Loans and Credit Quality - Total loans increased by $121.8 million to $10.04 billion, primarily due to loan originations[33]. - Non-performing loans decreased to $22.4 million, or 0.22% of total loans receivable, as of March 31, 2023[10]. - Non-performing loans totaled $22.4 million at March 31, 2023, down from $23.3 million at December 31, 2022[64]. - The allowance for loan credit losses was $60.2 million, or 0.60% of total loans, as of March 31, 2023, compared to $56.8 million, or 0.57% at December 31, 2022[64]. - Provision for credit losses was $3.0 million, up from $1.9 million, influenced by slowing loan prepayment experience[42]. Dividends and Shareholder Returns - The Company declared a quarterly cash dividend of $0.20 per share, to be paid on May 19, 2023[19]. - The Company declared and paid cash dividends of $11.8 million on common stock and $1.0 million on preferred stock during the first three months of 2023[58]. Operational Efficiency - The efficiency ratio for Q1 2023 was 60.78%, compared to 44.56% in the previous quarter[10]. - Operating expenses increased to $61.3 million from $57.5 million, partly due to the acquisition of Trident[44]. Risk Management - The Company faces various risks including changes in interest rates, inflation, and economic conditions that could adversely affect operations and financial results[72]. - Interest rate sensitivity is monitored through an IRR model, measuring changes in economic value of equity (EVE) and net interest income under various interest rate scenarios[78]. - The change in interest rate sensitivity was influenced by an increase in cash on hand, floating rate loan growth, and longer-term fixed rate funding[80]. - The Company utilizes strategies such as managing loan origination and retention, emphasizing core deposits, and using interest rate swaps to manage interest rate risk[77]. - The Company’s Asset Liability Committee (ALCO) regularly reviews asset liability policies and reports on the IRR position to the Board[76]. Regulatory and Accounting Changes - The Company adopted ASU 2022-02, which enhances disclosure requirements for loan refinancings and restructurings, effective for fiscal years beginning after December 15, 2022[68]. - The Company does not expect ASU 2022-03, effective after December 15, 2023, to have a material impact on consolidated financial statements[69]. - The Company is currently evaluating the impact of ASU 2023-02 on consolidated financial statements, which allows for tax equity investments to be accounted for using the proportional amortization method[70]. Commitments and Obligations - Outstanding commitments to originate loans totaled $318.4 million, with undrawn lines of credit amounting to $1.73 billion as of March 31, 2023[54]. - The Company had various contractual obligations, including debt obligations of $1.6 billion and finance lease obligations of $1.9 million as of March 31, 2023[56].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ 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) (State or other jurisdiction of incorporation or organizat ...