OceanFirst Financial
Annual Report 2023

Plain-text annual report

2023 AN NUAL REPORT DEPOSITS ($ in billions) Loans ($ in billions) Loans ($ in billions) DEPOSITS ($ in billions) LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) TOTAL ASSETS ($ in billions) Deposits: 10.4 9.7 9.7 9.4 6.3 Loan Receivable : 10.1 9.9 8.6 7.7 6.2 Total assets : 13.5 13.1 11.7 11.4 8.2 12 10 8 6 4 2 0 12 10 8 6 4 2 0 30 25 20 15 10 5 0 20 15 15 12 9 6 3 0 BOOK VALUE PER COMMON SHARE $30 25 20 15 10 5 0 $20 15 ’19 ’20 ’21 ’22 ’23 TANGIBLE BOOK VALUE PER COMMON SHARE $15 12 9 6 3 0 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 $12 10 8 6 4 2 0 FINANCIAL SUMMARY 2023 DEPOSITS ($ in billions) $12 10 8 6 4 2 0 $12 10 8 6 4 2 0 $12 10 8 6 4 2 0 LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) TOTAL ASSETS ($ in billions) $15 12 9 6 3 0 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 At or for the year ended December 31, (dollars in thousands, except per share amounts) 2023 2022 2021 2020 2019 10 10 “OCEANFIRST IS A STRONG FINANCIAL INSTITUTION WITH A WELL-ESTABLISHED HISTORY OF OUTSTANDING 5 ASSET QUALITY, A SOUND CAPITAL FOUNDATION, AND SOLID PROFITABILITY.” 0 0 5 Selected Financial Condition Data Total assets Loans receivable, net of allowance for loan credit losses Deposits Total stockholders’ equity Selected Operating Data Net interest income ’19 ’20 ’21 ’22 ’23 Other income(1) Operating expenses(1) Net income available to common stockholders(1) Diluted earnings per share(1) Selected Financial Ratios and Other Data(1) Tangible book value per common share(2) Book value per common share Cash dividends per common share Tangible stockholders’ equity to tangible assets(2) Stockholders’ equity to total assets Return on average assets(1) (3) Return on average tangible stockholders’ equity(1) (2) (3) Return on average stockholders’ equity(1) (3) Net interest margin Operating expenses to average assets(1) Efficiency ratio(1) Common equity tier 1 (CET1) capital ratio Non-performing loans as a percent of total loans receivable $13,538,253 10,136,721 10,434,949 1,661,945 $13,103,896 $11,739,616 $11,448,313 $8,246,145 9,868,718 8,583,352 7,704,857 6,207,680 9,675,206 9,732,816 9,427,616 6,328,777 1,585,464 1,516,553 1,484,130 1,153,119 369,731 33,624 248,912 100,013 1.70 18.35 27.96 0.80 8.80 % 12.28 0.74 8.97 6.13 3.02 1.85 61.71 10.86 0.29 377,477 59,094 234,881 142,587 2.42 17.08 26.81 0.74 305,338 51,931 226,860 106,060 1.78 15.93 25.63 0.68 8.47 % 8.89 % 12.10 1.15 13.96 9.24 3.37 1.90 53.80 9.93 0.23 12.92 0.91 10.73 7.02 2.93 1.94 63.50 10.26 0.30 312,951 255,971 73,926 246,431 61,212 1.02 42,165 189,142 88,574 1.75 14.98 24.57 0.68 8.79 % 12.96 0.55 6.59 4.20 3.16 2.20 63.70 11.05 0.60 15.13 22.88 0.68 9.71 % 13.98 1.10 11.96 7.84 3.62 2.35 63.44 12.14 0.40 (1) Performance ratios for 2023 included a net expense related to merger related expenses, net branch consolidation expense, Federal Deposit Insurance Corporation (“FDIC”) special assessment, net loss on sale of investments and net gain on equity investments of $6.2 million, or $4.7 million, net of tax benefit. Performance ratios for 2022 included a net benefit related to merger related expenses, net branch consolidation expense, and gain on equity investments of $6.2 million, or $4.6 million, net of tax expense. Performance ratios for 2021 include merger related expenses, branch consolidation expenses, and a net gain on equity investments of $6.7 million or $5.1 million, net of tax benefit. Performance ratios for 2020 include a net gain on equity investments, gain on sale of Paycheck Protection Program (“PPP”) loans, Federal Home Loan Bank (“FHLB”) advance prepayment fees, merger related expenses, branch consolidation expenses, and Two River Bancorp (“Two River”) and Country Bank Holding Company, Inc. (“Country Bank”) opening credit loss expense under the current expected credit losses (“CECL”) model of $14.3 million or $11.0 million, net of tax benefit. Performance ratios for 2019 include merger related expenses, branch consolidation expenses, non-recurring professional fees, compensation expense due to the retirement of an executive officer, and the reduction in income tax expense from revaluation of state deferred tax assets as a result of a change in the New Jersey tax code of $20.6 million, or $16.3 million, net of tax benefit. (2) These are non-GAAP measures; refer to “Explanation of non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” table” in the Company’s Earnings Release furnished as Exhibit 99.1 to Form 8-K as filed with the SEC on January 18, 2024. (3) Ratios for each period are based on net income available to common stockholders. ANNUAL REPORT 2023 1 Christopher D. Maher Chairman of the Board and Chief Executive Officer $100M NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (FULL-YEAR 2023) $276.5M INCREASE IN TOTAL LOANS (YEAR-END 2022-2023) $759.7M INCREASE IN DEPOSITS (YEAR-END 2022-2023) DEAR FELLOW STOCKHOLDERS: WE ARE PLEASED TO REPORT THAT OCEANFIRST DELIVERED PROFITABLE GROWTH IN 2023, WHILE ALSO STRENGTHENING OUR FINANCIAL POSITION IN RESPONSE TO A DIFFICULT OPERATING ENVIRONMENT. Among our more noteworthy accomplish- ments, we produced the third highest net income in the Company’s history, increased deposits, and prudently grew our loan portfolio, while continuing to invest in the capabilities needed to serve our customers and communities, build value for stockholders, and attract and retain talented employees. Significantly, our team achieved these accomplishments while also taking decisive action to protect our business, our customers, and our stockholder value against external economic and market challenges. The past year saw the continuation of an inflationary environment, coupled with high interest rates stemming from the Federal Reserve’s anti-inflationary policies. Early in 2023, a small number of banking institutions experienced liquidity issues that ultimately required regulatory intervention. That intervention negatively impacted their customers and resulted in severe losses to common shareholders at those institutions, a reminder of the need for a conservative bias when operating a leveraged financial institution. More recently, questions have been raised about some lenders’ exposure to the commercial real estate (CRE) sector. Overall, the U.S. banking system is sound and secure, and it is important to note that these issues have been limited to a few individual institutions. That said, as an organization that has navigated many economic cycles over our 122-year his- tory, we know that challenging times call for thoughtful and decisive action. The environment in 2023 was a case in point, and OceanFirst was well prepared. We grew our customer deposits by 7.9% and at the same time enhanced the stability of our deposit mix, including a reduction of brokered time deposits. We substantially strengthened OceanFirst’s capital base; total stockholders’ equity increased to $1.66 billion and our common equity Tier 1 ratio ended the year at 10.86%. Despite the impact on operating expenses of non-core items such as an industry-wide Federal Deposit Insurance Corporation (FDIC) special assessment in the current year, and merger-related and branch consolidation expenses in the prior year, we drove core non-interest expenses down by $815,000 comparing the fourth quarters of 2023 and 2022. Delivering Profitable Growth The Company’s performance for the past year reflected continued profitability, responsible loan growth, and pristine asset quality. For full-year 2023, we reported net income available to common stockholders of $100.0 million, or $1.70 per diluted share, compared to $142.6 million, or $2.42 per diluted share, for the prior year. Our results largely reflected a decrease in net interest income due to our measured loan growth, a shift in our deposit mix, and repricing of deposits that outpaced the increase in yields on interest-earning assets. As noted earlier, we produced the third highest earnings performance in the Company’s history and delivered a return on average assets of 0.74% and return on average tangible common equity of 9.44%. Taking a prudent approach to loan underwriting, while continuing to serve our customers’ credit needs, total loans increased by $276.5 million to $10.19 billion. Deposits increased by $759.7 million, to reach $10.43 billion. Our efforts to achieve a more stable deposit mix resulted in an increase in retail time deposits of $1.13 billion, while brokered time deposits decreased $242.0 million. We also were able to reduce Federal Home Loan Bank (FHLB) advances by $362.5 million due to the mix shift in funding sources from FHLB advances to deposits. Significantly, at a time when high interest rates and rising office vacancies in certain markets have posed a challenge to some lenders with large, non-diversified CRE concentrations, our asset quality remained exceptionally strong. Our diverse loan portfolio held less than 1% of assets in loans secured by office properties in central business districts, and less than 0.30% of total assets secured by rent-regulated multi-family properties. Non-performing assets at year-end remained among the lowest we have ever recorded at 0.22% of total assets. The Company held no foreclosed property for the second year in a row. We continued our responsible stewardship of stockholder value. Book value and tangible book value per share at year- end 2023 were $27.96 and $18.35, respectively, growing $1.15 and $1.27 respectively from the prior year. Tangible book value per share increased 7.4% after the payment of $0.80 per share in common dividends. Following the 2023 fourth quarter, the Board of Directors declared our 108th consecutive quarterly cash dividend on the common stock. While the Company did not repurchase any common shares during 2023, we believe we are in a strong position to resume repurchases during 2024 and there are more than 2.9 million shares available under the existing buyback authorization. While operating performance for 2023 was solid, the market value of our shares reflected a tumultuous year in the capital markets for bank stocks. Our share price decreased by 18.3%, reflecting industry trends as several sources of concern emerged during the year. These concerns, which included interest rate risk positions, liquidity profiles, and concentrated CRE credit exposures, have weighed heavily on bank stocks for some time. Our Company is positioned well in all aspects, but more time – and an extended period of stability – will be needed for the market to overcome these concerns about the financial industry. In the meantime, the Board and management are highly focused on building a business that should be substantially more valuable as economic conditions in the sector normalize. It is important to note that the Board of Directors, management, employees, and the OceanFirst Foundation own over 4.4 million shares collectively and we are strongly aligned with all common stockholders in the desire to create value with your investment. 2 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 3 Joseph J. Lebel III President and Chief Operating Officer “WE CONTINUE TO MAKE INVESTMENTS TO ENHANCE THE SERVICES AND SOLUTIONS AVAILABLE TO OUR CUSTOMERS AND TO EXPAND OUR CAPACITY FOR LONG-TERM PROFITABLE GROWTH AND VALUE CREATION.” Expanding Services and Solutions While maintaining a robust capital position and controlling operating expenses were major priorities over the past year, given the challenging economic environment, OceanFirst continued to make investments to enhance the services and solutions available to our customers and to expand our capacity for long-term profitable growth and value creation. To enhance our customer service and support future growth, we have invested in both talent and technology. For example, we added 18 experienced bankers to expand our commercial lending and residential lending teams in the past year. And we implemented an advanced digital portal powered by an auto decision engine to accelerate our approval process for small business loans and lines of credit. We demonstrated our commitment to serving the financing needs of small businesses within our communities. During the past year, we introduced an unsecured line of credit product with accelerated approvals. For credit lines of up to $25,000 to qualified borrowers, decisions are provided within 48 hours. At the same time, we have continued to optimize our retail branch network to better serve our markets and respond to customers’ evolving banking needs. In December, we opened our first-ever retail branch in New Brunswick, NJ, and we are very appreciative of the warm welcome we have received from the community. Plans are underway to modernize our branches in Brick and Bridgeton, NJ, in the coming year, with a completely new building constructed to replace the facility that has been our home in Brick since 1961, and a complete renovation at the Bridgeton office that will be followed by replacement of the existing standalone drive-thru with new video teller machines offering efficient extended banking hours. Although home mortgage lending on a nationwide scale has recently been hampered by higher interest rates and limited housing inventory for sale, we continue to view residential lending as both a long-term opportunity to gather quality assets and a vital part of OceanFirst’s service portfolio. In 2023, we strengthened our offerings in this area with the appointment of Stephen Adamo as President of Residential and Consumer Lending. Steve is responsible for making residential and consumer lending a center of excellence for the Company, with a focus on the growth and expansion of all residential home lending and consumer lending products, as well as our sales, servicing, and delivery channels. OceanFirst’s initiatives in commercial, small business, residential and consumer lending, and branch banking are consistent with our goal of providing a comprehensive range of financial services and solutions, delivered with the engagement and personal touch of a community bank. Our successful track record of investing in an enhanced customer experience has included the NestEgg financial advisory platform, our partnership in the Auxilior Capital equipment leasing and supply chain financing unit, and our majority investment in Trident Abstract Title Agency. 4 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 5 “BY MEETING WITH LOCAL ORGANIZATIONS AND COMMUNITY LEADERS, WE CAN SEE FIRSTHAND WHAT LOCAL PEOPLE AND BUSINESSES WANT AND NEED FROM THEIR BANKING PARTNERS.” Investing in Our Community Banks play a unique role in the American financial services system. As bankers, we generate deposits, originate loans, and deliver services directly to the neighborhoods where our customers live and work – helping residents to thrive and businesses to grow. During the past year, we embarked on an initiative to “take to the streets” and get to know our communities and their needs even better. A number of senior OceanFirst executives participated in a series of what we call “walkabouts” – meeting with local organizations and community leaders on their own turf, walking around the neighborhoods, and seeing firsthand what local people and businesses want and need from their banking partners. In the past year, we visited Asbury Park, Atlantic City, Bridgeton, Camden, Neptune, New Brunswick, Trenton and Vineland, NJ; Bronx, NY; and Philadelphia, PA – with more to come in 2024. What we’ve seen and learned on our walkabouts will help us focus the Bank’s resources where our communities need them most. That not only applies to banking services such as loans, but also grants provided by OceanFirst Foundation, and volunteer efforts like our CommUNITYFirst Day and WaveMakers programs. A number of new or enhanced initiatives have resulted from the walkabouts. The New Brunswick banking center, noted earlier, was inspired by our visit to that community. Another example is the expansion of our NeighborFirst program, launched in 2022, which makes mortgages more accessible and affordable for first-time homebuyers in New Jersey, New York and Pennsylvania. The program currently offers qualified applicants a discounted mortgage interest rate, lower down payment, and reduced fees, among other features. Eligible first- time homebuyers also may qualify for grants towards closing costs. During 2023, we originated $42.5 million in loans to over 150 borrowers through our NeighborFirst program. As a result of the insights gained from the walkabouts, OceanFirst Foundation announced an additional $385,000 for grants to several dozen organizations that provide housing assistance, food pantries, education, job placement and other much-needed services in our communities, bringing total Foundation support for our communities to $2.3 million in grants awarded for 2023. Over half ($1.2 million) of these grants helped nonprofit organizations serve low- and moderate- income communities and individuals. The walkabouts were just the latest addition to our extensive range of initiatives to expand access to economic opportunity across our communities. OceanFirst Bank also provided approximately $21.7 million in community development investments, and community development loans of $103 million for a range of projects in 2023. Loans to minority-owned and women-owned businesses last year amounted to $106 million. The Bank also provided 332 hours of financial literacy program, in partnership with local nonprofit organizations and schools, helping hundreds of community members to learn about healthy financial habits. Volunteer efforts are another way we give back to our communities. For our annual CommUNITYFirst Day, held in September 2023, more than 730 employees volunteered 2,900 hours to work with over 90 nonprofit organizations across New Jersey, New York City, Philadelphia, Baltimore, and Boston. In addition, our employees, whom we call WaveMakers, are active all year-round, volunteering thousands of hours to local nonprofits. OceanFirst Foundation, established in 1996 in conjunction with our initial public offering, has contributed over $48 million since inception to support charitable efforts in our communities. 6 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 7 Deposits: 10.4 9.7 9.7 9.4 6.3 Loan Receivable : 10.1 9.9 8.6 7.7 6.2 Deposits: 10.4 9.7 9.7 9.4 6.3 Total assets : 13.5 13.1 11.7 11.4 8.2 Loan Receivable : 10.1 9.9 8.6 7.7 6.2 Total assets : 13.5 13.1 11.7 11.4 8.2 “OCEANFIRST’S INITIATIVES ARE CONSISTENT WITH OUR GOAL OF PROVIDING A COMPREHENSIVE RANGE OF FINANCIAL SERVICES AND SOLUTIONS, DELIVERED WITH THE ENGAGEMENT AND PERSONAL TOUCH OF A COMMUNITY BANK.” Strengthening Governance OceanFirst’s commitment to strong governance includes periodically refreshing the membership of our Board of Directors. In 2023, we welcomed three new members to the Board: John F. Barros, Managing Principal of Civitas Builder – Boston, MA; Robert C. Garrett, CEO of Hackensack Meridian Health – Morris Township, NJ; and Dalila Wilson- Scott, EVP and Chief Diversity Officer of Comcast Corporation and President, Comcast NBCUniversal Foundation – Philadelphia, PA. Our new Board members bring significant professional experience with large and complex organizations, a breadth of geographic and industry knowledge, and diverse backgrounds. Director John Walsh, a Board member since 2000, will retire from service when his current term expires in 2024. In addition to being our longest tenured director, John served as Independent Lead Director for over 19 years, a role that was critical to our success, and we are deeply grateful for his leadership and dedication. We want to take this opportunity to honor the memory of Director Emeritus and former President Robert Knemoller, who passed away in 2023. Bob held several positions at the Bank beginning in the 1960s, serving as President from 1982–1985 and as a member of the Board of Directors from 1982 until his retirement in 2002, when he was named Director Emeritus. Bob’s career spanned a period of growth and transformation for the Company, including branch expansion, our initial public offering, and the transition from Ocean Federal to OceanFirst. We appreciate his many contributions, which provided the foundation for the Company as we know it today. We also note with sadness the passing of John Lloyd, who served on OceanFirst Financial Corp. and Bank Boards from 2018 through 2022. John built a distinguished career in health care, as President of Jersey Shore Medical Center, and was a leading force in the series of mergers that led to the creation of Hackensack Meridian Health, where he served as co-CEO until 2019. Respected throughout the healthcare industry, John contributed to the success of OceanFirst through his unfailing professionalism, wisdom, generosity and compassion. DEPOSITS ($ in billions) DEPOSITS ($ in billions) 12 10 12 8 10 6 8 4 6 2 4 0 2 0 Loans ($ in billions) Loans ($ in billions) 12 10 12 8 10 6 8 4 6 2 4 0 2 0 30 25 30 +4.8% 25 20 15 20 INCREASE IN TOTAL STOCKHOLDERS’ EQUITY (YEAR-END 2022-2023) 15 10 5 10 0 5 0 20 20 15 15 10 +7.4% 10 5 INCREASE IN TANGIBLE BOOK VALUE PER COMMON SHARE (YEAR-END 2022-2023) 5 0 0 Loans ($ in billions) Loans ($ in billions) 15 12 15 9 12 6 9 3 6 0 3 0 $12 10 $12 8 10 6 8 4 6 2 4 0 2 0 DEPOSITS ($ in billions) DEPOSITS ($ in billions) LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) TOTAL ASSETS ($ in billions) TOTAL ASSETS ($ in billions) ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 $12 10 $12 8 10 6 8 4 6 2 4 0 2 0 $12 10 $12 8 10 6 8 4 6 2 4 0 2 0 $15 12 $15 9 12 6 9 3 6 0 3 0 $15 12 $15 12 9 6 9 3 6 0 3 0 DEPOSITS ($ in billions) DEPOSITS ($ in billions) LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) TOTAL ASSETS ($ in billions) TOTAL ASSETS ($ in billions) ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 BOOK VALUE PER COMMON SHARE BOOK VALUE PER COMMON SHARE ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 TANGIBLE BOOK VALUE PER COMMON SHARE TANGIBLE BOOK VALUE PER COMMON SHARE $12 10 $12 8 10 6 8 4 6 2 4 0 2 0 ’19 ’20 ’21 ’22 ’23 ’19 ’20 ’21 ’22 ’23 $30 25 $30 20 25 15 20 10 15 5 10 0 5 0 $20 $20 15 15 10 10 5 5 0 0 8 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 9 Moving Forward With Confidence As a result of our longstanding unwavering focus on our customers, communities and shareholders, and demonstrated admirably by the Company’s actions in 2023, we can say with confidence that OceanFirst is a strong financial institution with a history of outstanding asset quality, a sound capital foundation, and solid profitability, even in turbulent economic environments. Our confidence is reinforced by a set of differentiating strengths – including our team of extremely talented and highly motivated professionals, our presence in a robust Northeast market with a diverse and resilient economic base, and a successful business model that combines a relationship-based community approach with a breadth of services competitive with much larger banks. In the years ahead, we will continue to pursue the strategies that have enabled OceanFirst to grow and thrive across more than a century of shifting economic cycles. We will meet the needs of our customers with a broad range of quality financial services and solutions, provide a rewarding workplace environment that encourages and retains talented employees, and support the communities in which we live and work. Importantly, we will continue to maintain a sharp focus on sound credit risk management, a stable retail deposit base, a solid capital foundation, and disciplined expense control. This focus should create an increasingly valuable business for the benefit of all. OceanFirst enters 2024 as a dynamic community-oriented financial institution with a longstanding commitment to serving the needs of our stakeholders. We deeply appreciate the loyalty of our customers and stockholders, the dedication of our team members, and the guidance of our Board of Directors, and we look forward to reporting on our future progress. Christopher D. Maher Chairman of the Board and Chief Executive Officer Joseph J. Lebel III President and Chief Operating Officer “ WE CONTINUE TO PURSUE THE STRATEGIES THAT HAVE ENABLED OCEANFIRST TO GROW AND THRIVE ACROSS MORE THAN A CENTURY OF SHIFTING ECONOMIC CYCLES.” 10 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 11 OCEANFIRST BANK SERVING THE NORTHEASTERN UNITED STATES MEGALOPOLIS POPULATION OVER 50 MILLION “OUR FOCUS IN RECENT YEARS ON EXPANDING THROUGHOUT THE MIDDLE ATLANTIC REGION HAS PROVIDED OCEANFIRST WITH A FOOTHOLD IN A GROWING AND HISTORICALLY RESILIENT MARKET AND GIVEN US ACCESS TO A DIVERSE GROUP OF CUSTOMERS ARRAYED ALONG THE NORTHEAST CORRIDOR FROM BALTIMORE TO BOSTON.” MA NY NY NJ PA MD Regional/Market Presidents R. Thomas Crawford Baltimore Vincent M. D’Alessandro Community & Retail Banking George Destafney New Jersey Region Bradley J. Fouss Greater Philadelphia Daniel L. Griggs Boston Region Daniel J. Harris New York Region and Chief Commercial Real Estate Officer AnnMarie Sorena Metropolitan New York Susanne Svizeny Mid-Atlantic Region and Chief Commercial and Industrial Loans Officer 12 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 13 COMMITMENT TO OUR COMMUNITIES: OceanFirst Foundation FOR MORE THAN 27 YEARS, OCEANFIRST FOUNDATION HAS PLAYED A VITAL ROLE BY HELPING TO INSPIRE PROGRESS AND IMPROVE LIVES ACROSS OUR MARKET AREA. DEPOSITS ($ in billions) $12 10 8 6 4 OceanFirst’s commitment to our communities is expressed in many ways – from our programs to increase and extend access to financial services; to our loans and investments supporting affordable housing, community revitalization and economic development; to efforts of our WaveMaker employee volunteers. Another important way that we support our communities is through the activities of OceanFirst Foundation. For more than 27 years, OceanFirst Foundation has played a vital role by partnering with local nonprofit organizations and schools, and providing the financial resources and expertise to help inspire progress and improve lives across our market area. The Foundation was created in 1996 in connection with OceanFirst’s initial public offering. As the first foundation ever created as part of a mutual-to-stock conversion, this community-spirited innovation has inspired at least 85 other 2 0 ’19 ’20 banks nationwide to adopt a similar model. Since inception, the Foundation has provided more than $48 million in grants to nonprofit organizations that promote ’23 access to housing, health and wellness, youth development and education, the arts and culture, and overall quality of life. The Foundation also matches charitable donations by OceanFirst Bank employees to eligible organizations, up to a total of ’22 ’21 $50,000 annually. $12 10 8 6 4 2 0 $48M TOTAL GRANTS SINCE INCEPTION Improving Quality of Life 29.5% Disaster Response 2.4% Youth Development/Education 27.7% Supporting First Responders 2.2% Health/Wellness 18.6% Military/Veteran 1.6% Housing 8.7% Environment 1.0% Arts/Culture 8.3% New Brunswick Tomorrow New Brunswick Tomorrow (NBT) is a New Jersey-based nonprofit organization whose ideas, partnerships and initiatives are moving people forward. NBT is dedicated to fostering public/private networks of agencies, institutions, and community organizations that enrich the lives of the people of New Brunswick, promoting self-sufficiency and personal dignity for every individual. The LOANS RECEIVABLE (Net of allowance for loan credit losses) ($ in billions) TOTAL ASSETS ($ in billions) $15 12 9 New Brunswick Tomorrow—163 French Street NHSNYC 6 ’19 ’19 3 0 ’22 ’21 ’20 ’23 IN 2023, THE FOUNDATION AWARDED 675 GRANTS TOTALING $2.3 MILLION TO LOCAL ORGANIZATIONS. organization is focused on improving the quality of life for all city residents, identifying critical community needs, and responding to those needs. They believe ’20 that a thriving neighborhood must include a thriving economy built on the success and growth of small businesses. ’21 ’23 ’22 With a grant from the Foundation, NBT will focus on putting into action a model for small business incubation and acceleration, targeting neighborhood and economic development through equitable growth strategies in the city. A key element of this effort will be supporting local businesses and their owners and employees along the French Street Commercial Corridor. This support will include technical assistance in areas such as training and coaching to aspiring and established entrepreneurs, and helping small businesses, particularly women- and minority-owned businesses, access resources and capital to ensure sustainable success. NBT also is taking a multi-pronged approach to enrich the overall safety and aesthetics of the Corridor by implementing physical and aesthetic improvements. Neighborhood Housing Services of New York City, Inc. Offering a comprehensive continuum of services for low- and moderate-income individuals and families, Neighborhood TOTAL ASSETS ($ in billions) Housing Services of New York City, Inc. (NHSNYC) works to provide low- and moderate-income New Yorkers with a pathway to purchase affordable homes – and to access the financial and personal opportunities that come with home ownership. Established in 1982, NHSNYC’s programs have helped individuals and families realize their home ownership dreams, while building vital communities. Core programs include Community Development Financial Institution Lending Services; free Homebuyer Orientation Seminars, Education and Counseling; Financial Education Seminars and Coaching; Landlord Training Seminars; and Foreclosure Prevention Seminars and Counseling. ’20 ’23 ’19 ’22 ’21 The Foundation’s grant to NHSNYC will help support their general operations, sustaining programs and services for low- and moderate-income New Yorkers in pursuit of lasting homeownership and overall financial wellness. 14 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC ANNUAL REPORT 2023 15 Improving Quality of Life 14,197,562.59 Youth Development/Education 13,296,487.8 Heath/Wellness 8,919,040.10 Housing 4,197,121 Arts/Culture 4,011,907.36 Disaster Response 1,131,750 Supporting First Responders 1,058,350 Military/Veteran 782,869.26 Environment 474,640.00 OCEANFIRST HAS BEEN DEEPLY COMMITTED TO SUPPORTING THE COMMUNITIES WHERE OUR COLLEAGUES AND CUSTOMERS LIVE AND WORK. PIDC Community Capital Active throughout Philadelphia, PIDC Community Capital finances growing businesses of all sizes, across all industry sectors, and delivers business support services to increase the capacity and resilience of diverse entrepreneurs. By coupling flexible capital with business education, PIDC provides small businesses with the capital and knowledge to scale and grow. The organization focuses on driving investment into historically marginalized and underdeveloped areas and neighborhoods that stand to benefit most from increased access to amenities, goods, services for residents, and jobs. With support from the Foundation, PIDC Community Capital expects to provide more than $12 million in flexible capital in the coming year to approximately 50 small businesses in Philadelphia, while delivering business support services to more than 800 small businesses, with a focus on BIPOC (Black, Indigenous and people of color) entrepreneurs and women-owned businesses. PIDC Community Capital Client: Shannon Maldonado, Founder & Creative Director of YOWIE Hotel & Shop 16 OCEANFIRST FINANCIAL CORP. NASDAQ:OCFC OceanFirst Bank N.A. Executive Officers Christopher D. Maher Chairman of the Board and Chief Executive Officer Joseph J. Lebel III President and Chief Operating Officer Patrick S. Barrett Executive Vice President and Chief Financial Officer David L. Berninger Executive Vice President and Chief Risk Officer Michele B. Estep Executive Vice President and Chief Administrative Officer Brian Schaeffer Executive Vice President and Chief Information Officer Steven J. Tsimbinos Executive Vice President and General Counsel Corporate Information Board of Directors Director Emeritus Angelo J. Catania John W. Chadwick John R. Garbarino Donald E. McLaughlin Diane F. Rhine James T. Synder OceanFirst Financial Corp. Corporate Officers Christopher D. Maher Chairman of the Board, President and Chief Executive Officer Joseph J. Lebel III Executive Vice President and Chief Operating Officer Patrick S. Barrett Executive Vice President and Chief Financial Officer Steven J. Tsimbinos Executive Vice President and Corporate Secretary David Berninger Executive Vice President and Chief Risk Officer David R. Howard First Senior Vice President and Treasurer Patrick Chong Senior Vice President, Corporate Controller and Principal Accounting Officer Alfred Goon Senior Vice President, Corporate Development and Investor Relations Angela K. Ho Senior Vice President and Chief Compliance Officer B. Matthew McCue Vice President and Assistant Corporate Secretary John F. Barros Managing Principal Civitas Builders Anthony R. Coscia, Esq. Partner Windels Marx Lane & Mittendorf, LLP Michael D. Devlin Retired Cape Bancorp, Inc. Jack M. Farris Retired Verizon Communications, Inc. Robert C. Garrett CEO Hackensack Meridian Health Kimberly M. Guadagno, Esq. President and Executive Director Mercy Center Nicos Katsoulis Retired Sun National Bank Joseph J. Lebel III President and Chief Operating Officer, OceanFirst Bank, N.A. Christopher D. Maher Chairman of the Board and Chief Executive Officer OceanFirst Bank, N.A. Joseph M. Murphy, Jr. Retired Country Bank Holding Company, Inc. Steven M. Scopellite Consultant Retired –Goldman Sachs Grace C. Torres Trustee Prudential Retail Mutual Funds Patricia L. Turner, MD Executive Director and CEO American College of Surgeons John E. Walsh Senior Vice President T&M Associates, Inc. Dalila Wilson-Scott Executive Vice President and Chief Diversity Officer Comcast Corporation Headquarters (HQ1) Operations Center 975 Hooper Avenue Toms River, NJ 08753 Administrative Offices (HQ2) 110 West Front Street Red Bank, NJ 07701 www.oceanfirst.com Virtual Annual Meeting of Stockholders Independent Registered Public Accounting Firm The annual meeting of stockholders will be held virtually on May 21, 2024 at 8:00 a.m. ET. Instructions to access the virtual meeting are referenced in the proxy statement and available at www.oceanfirst.com in the Investor Relations area. Investor Relations Copies of the Company’s earnings releases and financial publications, including the annual report on Form 10-K (without exhibits) filed with the Securities and Exchange Commission are available without charge by contacting: Alfred Goon, Senior Vice President, 1.888.623.2633 Extension 27516 or investorrelations@oceanfirst.com. Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 Stock Transfer and Registrar Shareholders wishing to change the name, address or ownership of stock, to report lost certificates or to consolidate accounts are asked to contact the Company’s stock registrar and transfer agent directly: Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717 (877) 724-6454 NASDAQ: OCFC Equal Opportunity Lender Equal Housing Lender . c n I , n g i s e D k n y W 

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