OCEANFIRST FINANCIAL CORP

Note 1. Basis of Presentation

The consolidated financial statements include the accounts of: the Company; its wholly-owned subsidiaries, the Bank; the Bank’s direct and indirect wholly-owned subsidiaries, OceanFirst REIT Holdings, Inc., OceanFirst Management Corp., OceanFirst Realty Corp., Casaba Real Estate Holdings Corporation, Country Property Holdings, Inc., OFB Acquisition LLC, Spring Garden Capital Group, LLC (and its subsidiaries), FSB Properties Inc., Flushing Service Corporation, and Flushing Remsen Units, Inc. The Company disposed of its 60% controlling interest in Trident Abstract Title Agency, LLC on October 1, 2025, and dissolved OceanFirst Risk Management, Inc. on June 26, 2026, which were included in the Company’s consolidated financial statements for previous periods. 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 and nine months ended September 30, 2026 are not necessarily indicative of the results of operations that may be expected for the full year 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 GAAP have been condensed or omitted pursuant to the rules and regulations of 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, 2025.

Segment Reporting

The Company’s operations are solely in the financial services industry and provide a range of regional community banking services to retail and commercial customers. The Company operates throughout New Jersey, New York, Long Island, and the major metropolitan areas from Massachusetts through Virginia.

Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the CODM. The CODM makes operating decisions and manages the activities of the business on a consolidated basis. Therefore, management concluded the Company has a single operating segment, and thereforeone reportable segment.

Further, the CODM allocates resources and assesses performance based on an ongoing review of the Company’s consolidated financial results. Specifically, the CODM reviews net income, reported within the Consolidated Statements of Income, along with information in the Consolidated Statements of Financial Condition, to decide whether to reinvest profits into the Company or other strategic investments. Refer to the Consolidated Statements of Financial Condition and Consolidated Statements of Income for net income and all significant expenses regularly provided to and reviewed by the CODM.

Note 2. Business Combination

Flushing Acquisition

On June 1, 2026, the Company completed its acquisition of Flushing, pursuant to which Apollo Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), merged with and into Flushing (the “First-Step Merger”), with Flushing continuing as the surviving entity. Immediately following the First-Step Merger, Flushing merged with and into the Company, with the Company continuing as the surviving corporation (the “Second-Step Merger” and together with the First-Step Merger, the “Merger”). On the day immediately following the closing date of June 1, 2026, Flushing Bank, a New York-chartered non-member bank and, prior to the Second-Step Merger, a wholly-owned subsidiary of Flushing merged with and into the Bank, with the Bank continuing as the surviving bank.

Each share of common stock, par value $0.01 per share, of Flushing issued and outstanding immediately prior to the completion of the Merger, was converted into the right to receive 0.85 of a share of common stock, par value $0.01 per share, of the Company. Holders of Flushing common stock also became entitled to receive cash in lieu of fractional shares of the Company’s common stock.

Concurrent with the completion of the Merger, the Company raised $225 million of equity from affiliates of funds managed by Warburg Pincus, in which the Company issued and sold to Warburg Pincus 9.6 million shares of the Company’s common stock, at $19.76 per share,1,812 shares of a new class of NVCE Stock representing the economic equivalent of approximately 1.8 million shares of the Company’s common stock, at $19,760 per share of NVCE Stock, and issued to Warburg Pincus a warrant to purchase approximately 11.4 million shares of NVCE Stock with an exercise price of $19,760 per share of NVCE Stock.

The NVCE Stock was issued as a series of preferred stock, in accordance with the Investment Agreement dated December 29, 2025. The NVCE Stock is not listed or traded on any national securities exchange or automated quotation system, and there currently is no established trading market for such stock. The NVCE Stock does not have voting rights and ranks equally with, and has identical rights, preferences and privileges as the voting common stock with respect to dividends or distributions (including regular quarterly dividends) declared by the Board and rights upon any liquidation, dissolution, winding up or similar proceeding of the Company.

The warrant carries a term ofseven years and can be exercised voluntarily following the third anniversary of the investment. The warrant can also be voluntarily exercised prior to the third anniversary of the investment, in the event the market price of the Company’s common stock reaches or exceeds $30 per share at the closing of any trading day or in connection with certain change of control transactions involving the Company. The warrant is subject to mandatory exercise, at any time, in the event the market price of Company’s common stock reaches or exceeds $30 per share for a certain number of trading days over a specified period. In the event of a change of control transaction where less than 90% of the consideration in such transaction is comprised of equity securities traded on the NASDAQ or NYSE, Warburg Pincus will be entitled to receive additional shares if it exercises the warrant in connection with such transaction. The warrants are accounted as equity-classified instruments.

The acquisition was accounted for under the acquisition method of accounting, with the Company as the accounting acquirer. Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values, net of tax. The excess of consideration paid over the estimated fair value of the net assets acquired has been recorded as goodwill.

After purchase accounting adjustments, the Merger added $8.69 billion to total assets, including $6.20 billion to loans and loans held for sale, and $7.44 billion to deposits. Total consideration paid for Flushing was $538.4 million, including cash consideration of $2.8 million. The application of the acquisition method of accounting resulted in goodwill of $13.4 million.

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Flushing, net of total consideration paid (in thousands):

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to the recorded carrying values may be required.

Fair Value Measurement of Assets Assumed and Liabilities Assumed

The methods used to determine the fair value of the assets acquired and liabilities assumed in the Flushing acquisition were as follows. Refer to Note 8, Fair Value Measurements, for a discussion of the fair value hierarchy.

Securities

The estimated fair values of the securities were generally calculated utilizing Level 1 and Level 2 inputs using quoted market prices, observable market data or subsequent sale prices as this was determined to be the best indicator of fair value. The securities acquired are generally traded in active markets. Prices for these instruments were obtained through security industry sources actively participating in these markets or using other observable inputs. Certain municipal securities are fair valued using a discounted cash flow methodology and therefore, are classified as Level 3.

Loans and loans held-for-sale

The Company evaluated whether acquired loans have experienced more-than-insignificant deteriorations in credit quality since origination, using a combination of qualitative and quantitative factors. Loans meeting this criteria were classified as purchased credit deteriorated (“PCD”) loans. In accordance with the adoption of ASU 2025-08, all loans acquired that are not identified as PCD loans are classified as purchased seasoned loans (“PSL”), with the exception of credit cards. For both PSL and PCD loans, the Company recorded an initial allowance through an adjustment to acquired loan balances and a related purchase accounting mark under the gross up approach.

The acquired loan portfolio held for investment was valued utilizing Level 3 inputs and included the use of present value techniques employing cash flow estimates and incorporated assumptions that marketplace participants would use in estimating fair values. The acquired loans were grouped into pools based on similar characteristics such as loan type, interest rate type, payment type, risk rating and performance status. Specifically, the Company utilizedtwo separate fair value analyses which a market participant would employ in estimating the total fair value adjustment: 1) interest rate loan fair value analysis and 2) credit fair value adjustment.

The credit fair value adjustment was calculated using expected credit losses derived from probability of default and loss given default assumptions over the estimated life of the loans. The analysis also incorporated market participant assumptions regarding economic conditions and other qualitative factors. These inputs were obtained from various external data sources and reviewed by management for reasonableness. A discounted cash flow approach was utilized to calculate the credit fair value adjustment.

For the interest rate fair value analysis, market rate spreads and prepayment assumptions were developed for each loan pool using data obtained from various external sources and were reviewed by management for reasonableness. A discounted cash flow approach was utilized to calculate the interest rate fair value adjustment. The non-credit discount on the acquired loans will be recognized over the life of the loans on a level yield basis as an adjustment to yield.

The following table presents the PCD and PSL activity on loans held for investment (in thousands):

Upon completion of the acquisition, the Company sold $1.31 billion of multifamily loans that were classified as loans held-for-sale, with servicing released. The held-for-sale loans were valued based on the executed sales price, net of estimated costs to sell, from an observable transaction completed shortly after the acquisition date, as this was determined to be the best indicator of fair value. Management determined that no significant changes in market conditions or loan characteristics occurred between the acquisition date and the sale date.

Leases

Flushing operated 31 properties that were subject to separate lease agreements, in addition to owned properties. The fair value of acquired leases was determined using a discounted cash flow methodology based on the present value of the difference between contractual rents and estimated market rents for comparable properties over the remaining lease terms.

Deposits and Core Deposit Premium

Core deposit premium represents the value assigned to certain non-interest-bearing demand deposits, interest-bearing checking, money market and savings accounts acquired as part of the acquisition. The core deposit premium value represents the future economic benefit, including the present value of future tax benefits, of the potential cost savings from acquiring the core deposits as part of an acquisition compared to the cost of alternative funding sources and is valued utilizing Level 3 inputs. The core deposit premium totaled $85.0 million for the acquisition of Flushing, and is being amortized over its estimated useful life of approximately 7 years using a sum of the years’ digits method.

Time deposits are not considered to be core deposits as they are assumed to have a low expected average life upon acquisition. The fair value of time deposits represents the present value of the expected contractual payments discounted by market rates for similar time deposits and is valued utilizing Level 2 inputs.

Borrowings

The fair value of the acquired subordinated debt is valued using observable market prices and trading data for this instrument. Accordingly, the valuation utilized Level 2 inputs.

The fair value for the junior subordinated debt, or trust preferred securities, was determined using a discounted cash flow methodology. Contractual cash flows were discounted using market rates for similar debt instruments adjusted for differences in credit risk, liquidity, and time to maturity. Accordingly, the valuation utilized Level 3 inputs.

Supplemental Pro Forma Financial Information

The following table presents financial information regarding the former Flushing operations included in the Consolidated Statements of Income from the date of the acquisition (June 1, 2026) through September 30, 2026. In addition, the table provides unaudited condensed pro forma financial information assuming the Merger had been completed as of January 1, 2025 for the nine months ended September 30, 2025. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results.

The unaudited pro forma information does not reflect management’s estimates of any revenue-enhancing opportunities or anticipated cost savings that may be realized as a result of the integration and consolidation of Flushing’s operations. The pro forma information presented gives effect to estimated purchase accounting fair value adjustments, merger-related expenses of $84.0 million assumed to have been incurred in 2025 and therefore excluded from 2026 results, the removal of Flushing’s 2025 goodwill impairment charge, and related income tax effects, including the application of the combined entity’s effective tax rate. Average diluted shares outstanding include shares issued in connection with the Flushing acquisition, as well as common stock and NVCE Stock issued to Warburg Pincus.

Note 3. Earnings per Share

The following reconciles shares outstanding for basic and diluted earnings per share for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The Company calculates earnings per share using the two-class method, as NVCE Stock qualifies as a participating security under ASC 260. Since earnings per share attributable to common stock and NVCE Stock are identical, a single basic and diluted earnings per share amount is presented for both classes of stock. All NVCE shares presented in this document are reported on an as-converted common stock equivalent basis.

The following table presents the antidilutive stock options and warrants that were excluded from the earnings per share calculation for the three and nine months ended September 30, 2026 and 2025.

Note 4. Securities

The amortized cost, estimated fair value, and allowance for securities credit losses of debt securities AFS and HTM at September 30, 2026 and December 31, 2025 are as follows (in thousands):

(1)Refer to Note 9, Derivatives and Hedging Activities for additional information.

The following table presents the activity in the allowance for credit losses for debt securities HTM for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The Company monitors the credit quality of debt securities HTM 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 HTM at September 30, 2026, aggregated by credit quality indicator, are as follows (in thousands):

There were $577,000 of realized losses on sale of debt securities AFS for the three and nine months ended September 30, 2026, as compared to $8,000 and $64,000 realized losses for the corresponding prior year periods. These realized gains/losses on debt securities are presented within Other and included within Total other income on the Consolidated Statements of Income.

The amortized cost and estimated fair value of debt securities at September 30, 2026 by contractual maturity are shown below (in thousands):

(1)The amortized cost of AFS securities excludes the portfolio layer fair value hedge basis adjustments of $37.4 million at September 30, 2026.

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 September 30, 2026, corporate debt securities, state and municipal obligations, and asset-backed securities with an amortized cost, excluding the fair value hedge basis adjustments, of $226.0 million, $104.2 million, and $456.5 million, respectively, and an estimated fair value of $224.0 million, $99.0 million, and $456.0 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.

The estimated fair value and unrealized losses for debt securities AFS and HTM at September 30, 2026 and December 31, 2025, segregated by the duration of the unrealized losses, are as follows (in thousands):

(1)The unrealized losses of AFS securities excludes the portfolio layer fair value hedge basis adjustments of $37.4 million and $4.0 million at September 30, 2026 and December 31, 2025, respectively.

The Company concluded that no debt securities were impaired at September 30, 2026 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.

Equity Investments

At September 30, 2026 and December 31, 2025, the Company held equity investments of $65.8 million and $91.9 million, respectively. The equity investments are primarily comprised of investments in other financial institutions and funds, and select financial services institutions’ preferred stocks.

The realized and unrealized gains or losses on equity securities for the three and nine months ended September 30, 2026 and 2025 are shown in the table below (in thousands):

Note 5. Loans Receivable, Net

Loans receivable, net at September 30, 2026 and December 31, 2025 consisted of the following (in thousands):

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 Company’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. These loans have a well-defined weakness or weaknesses that jeopardize the collection or the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

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.

The following tables summarize total loans (in thousands) by year of origination, internally assigned credit grades, and risk characteristics. The tables also include gross charge-offs that were recorded for the year to date periods presented, by year of origination (in thousands):

(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.

(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.

An analysis of the allowance for credit losses on loans for the three and nine months ended September 30, 2026 and 2025 was as follows (in thousands):

(1)The allowance for credit losses for the nine months ended September 30, 2026 reflects the initial allowance recorded on purchased seasoned loans and purchased credit deteriorated loans acquired in the Flushing merger, in accordance with ASU 2025-08.

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 September 30, 2026 and December 31, 2025, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $103.2 million and $13.6 million, respectively, commercial and industrial - real estate of $20.1 million and $4.8 million, respectively, and commercial and industrial - non-real estate of $3.6 million and $603,000, respectively. In addition, the Company had collateral dependent residential and consumer loans with an amortized cost balance of $8.4 million and $5.5 million at September 30, 2026 and December 31, 2025, respectively.

The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of September 30, 2026 and December 31, 2025 (in thousands):

At September 30, 2026 and December 31, 2025, 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 September 30, 2026 and December 31, 2025, there wereno loans greater than 90 days past due that were accruing interest.

The following table presents the aging of the recorded investment in past due loans as of September 30, 2026 and December 31, 2025 by loan portfolio segment (in thousands):

Loan Modifications to Borrowers Experiencing Financial Difficulty

In accordance with ASU 2022-02, the Company has modified and may modify in the future certain loans to borrowers experiencing financial difficulty. These modifications may include a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is subsequently adjusted by an amount equal to the total loss rate as applied to the reduced amortized cost basis. As of September 30, 2026 and December 31, 2025, loans with modifications to borrowers experiencing financial difficulty totaled $24.8 million and $24.9 million, respectively. There wereno outstanding commitments to lend additional funds to such borrowers with loan modifications as of September 30, 2026 or December 31, 2025.

The following table presents loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026 and 2025 (in thousands):

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 September 30, 2026 and 2025 (in thousands):

(1) Represents one commercial real estate - investor loan that defaulted during the nine months ended September 30, 2026, which had been modified within the last 12 months.

Note 6. Deposits

The major types of deposits at September 30, 2026 and December 31, 2025 were as follows (in thousands):

Included in time deposits at September 30, 2026 and December 31, 2025 was $1.02 billion and $474.6 million, respectively, of deposits of $250,000 or more. Time deposits also include brokered deposits of $1.05 billion and $609.8 million at September 30, 2026 and December 31, 2025, respectively.

Note 7. Borrowed Funds

Borrowed funds at September 30, 2026 and December 31, 2025 were as follows (in thousands):

At September 30, 2026 and December 31, 2025, there were $1.40 billion and $929.2 million, respectively, of FHLB term advances and overnight borrowings from the FHLB of $374.0 million and $468.0 million, respectively.

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):

The securities that collateralize the repurchase agreements are delivered to the lender, with whom each transaction is executed, to a third-party custodian, or held at the Company. The lender agrees to resell to the Company substantially the same securities at the maturity of the repurchase agreements.

Note 8. 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 AFS 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. Certain municipal securities are fair valued using a discounted cash flow methodology and, therefore, are classified as Level 3.

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 NAV per share as a practical expedient, which are excluded from the fair value hierarchy levels in the table below.

Interest Rate Derivatives

The Company’s interest rate swaps, caps, and collars 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, cap, or collar contracts, the Company is exposed to fair value changes due to interest rate movements, and also the potential nonperformance of the contract counterparty.

Credit Default Swap

The credit default swap is reported at fair value. The fair value of the credit default swap is estimated utilizing discounted cash flows and is derived from various inputs. The inputs include unobservable inputs to measure the probability of future credit events for a portion of the Company’s underlying residential loan portfolio in which no active market exists. The credit default swap is therefore classified within Level 3 on the hierarchy.

Other Real Estate Owned and Loans Individually Measured for Impairment

Other real estate owned and loans measured for impairment based on the fair value of the underlying collateral are recorded at estimated fair value, less estimated selling costs. Fair value is generally based on independent appraisals (Level 3), which may be adjusted by management for qualitative factors, such as economic factors and estimated liquidation expenses.

The following table summarizes financial assets and financial liabilities measured at fair value as of September 30, 2026 and December 31, 2025, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

(1) As of September 30, 2026 and December 31, 2025, equity investments included $40.2 million and $40.2 million, respectively, of equity investments measured under the measurement alternative. There wereno realized gains/losses for the nine months ended September 30, 2026 and December 31, 2025.

(2) As of September 30, 2026 and December 31, 2025, equity investments included $12.1 million and $6.5 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 of fair value adjustments 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 transfers into or out of Level 3 for the three and nine months ended September 30, 2026 and 2025.

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 HTM 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.

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.

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.

The book value and estimated fair value of the Company’s significant financial instruments not recorded at fair value as of September 30, 2026 and December 31, 2025 are presented in the following tables (in thousands):

(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, 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.

Note 9. 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 may also enter into derivative financial instruments to reduce credit risk and manage regulatory capital levels. The Company does not use derivative financial instruments for trading purposes.

Customer Derivatives – Interest Rate Swaps and Cap Contracts

Derivatives Not Designated as Hedging Instruments

Interest Rate Swaps and Cap Contracts

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, and therefore changes in fair value are reported in earnings. As the interest rate swaps and cap contracts are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC Topic 820, Fair Value Measurements. The Company recognized losses of $10,000 and gains of $7,000 in commercial loan swap income resulting from fair value adjustments for the three and nine months ended September 30, 2026, respectively, as compared to losses of $3,000 and $28,000 for the corresponding prior year periods.

Credit Default Swap

In December 2025, the Company entered into a credit default swap related to a $1.52 billion pool of on-balance sheet residential mortgage loans, as the buyer of credit protection, to manage regulatory capital levels and reduce credit risk. The swap is a freestanding derivative as the contract is distinct from the referenced loan agreements and is executed with a separate counterparty. Under the terms of the swap contract, the Company will be compensated for certain credit-related losses on the residential mortgage loan pool, which had a total remaining principal balance of $1.39 billion and $1.50 billion at September 30, 2026 and December 31, 2025, respectively. The credit protection purchased was equal to the credit default swap notional amount of $69.4 million and $75.8 million at September 30, 2026 and December 31, 2025, respectively. As the buyer of credit protection, the Company pays a premium to the protection seller in return for the right to receive a payment if a specified credit event occurs. The credit default swap terminates in October 2055.

The table below presents the effects of the credit default swap on net income, as well as the location on the Consolidated Statements of Income (in thousands):

Derivatives Designated as Hedging Instruments

Interest Rate Swap Contracts - Fair Value Hedges

During 2025, the Company entered into interest rate swap derivatives to hedge the changes in fair value of AFS debt securities due to changes in interest rates. The swaps hedge the interest rate risk component of the change in fair value of the hedged items (i.e., hedged layers of AFS debt securities), and were designated and qualified as portfolio layer method fair value hedges under ASC Topic 815, Derivatives and Hedging. The last of the fair value hedges is scheduled to expire in October 2042.

For AFS securities that are included in a fair value hedge relationship, changes in fair value related to changes to the benchmark interest rate on AFS securities are immediately recognized into interest income in the Consolidated Statements of Income, and are offset by the change in the fair value of the interest rate swap derivatives. Changes in fair value of the AFS securities that are unrelated to interest rate risk are recorded in OCI as net unrealized gains (losses) on AFS securities. Throughout the life of the hedges, basis adjustments are maintained at the portfolio level and are allocated to individual assets only under certain circumstances. These circumstances include instances where the portfolio amount falls below the hedged layer amounts, or in cases of voluntary de-designation. The cumulative fair value hedge basis adjustments included in the carrying amount of hedged assets are reversed through the Consolidated Statements of Income in future periods as an adjustment to yield. All swaps involved in fair value hedges have been determined to be effective.

The following table presents the amortized cost and cumulative basis adjustment for closed portfolios of securities used to designate fair value hedging relationships (in thousands):

The table below presents the effects of fair value hedges on net interest income, as well as their location on the Consolidated Statements of Income (in thousands):

Interest Rate Option and Swap Contracts - Cash Flow Hedges

In June 2026, the Company entered into interest rate collars, which are option contracts intended to limit the Company's exposure to increases in short term interest rates while foregoing some of the upside if short term interest rates decrease significantly. These contracts hedge the risk of variability in the Company’s cash flows arising from future interest payments attributable to changes in the benchmark SOFR rate below certain interest rate floors and above certain interest rate caps related to the rollover of fixed-rate FHLB advances, brokered time deposits, or other fixed rate borrowings. The collars were designated and qualified as a cash flow hedge under ASC Topic 815, Derivatives and Hedging. The collars have terms ranging from three tofive years, and the last of the collar hedges is scheduled to expire in June 2031.

During 2022, the Company entered into athree-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 was designated and qualified as a cash flow hedge, under ASC Topic 815, Derivatives and Hedging. The interest rate swap matured on January 1, 2026, and there were no additional reclassifications into interest income.

The table below presents the effect on the Company’s AOCI or AOCL attributable to the cash flow hedge derivatives, net of tax, and the related gains/losses reclassified from AOCI into income (in thousands):

During the next twelve months ending September 30, 2027, the Company estimates that there will be no reclassifications into interest income or expense.

Derivatives Not Designated as Hedging Instruments and Designated as Hedging Instruments

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):

Credit Risk-Related Mitigating Features

The Company is exposed to credit risk in the event of nonperformance by various derivative counterparties. The Company minimizes risk of nonperformance by being a party to International Swaps and Derivatives Association agreements with third party broker-dealers that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. There wasno cash collateral posted by the Company with third parties at either September 30, 2026 or December 31, 2025. The amount of cash collateral received from these third parties was $157.8 million and $42.9 million at September 30, 2026 and December 31, 2025, respectively. The amount of cash collateral posted or received with these third parties is deemed to be sufficient to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures.

The interest rate derivatives which the Company executes with the commercial borrowers are collateralized by the borrowers’ commercial real estate financed by the Company. The credit default swap is not exposed to counterparty credit risk as it is fully collateralized.

The aggregate fair value of all derivative financial instruments in a liability position with credit measure contingencies and entered into with third parties was $113.6 million and $54.0 million at September 30, 2026 and December 31, 2025, respectively.

Note 10. 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 hasone existing finance lease, which has a lease term through 2029.

The following table represents the classification of the Company’s ROU assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):

(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $716,000 and $897,000 at September 30, 2026 and December 31, 2025, respectively.

The following table represents the weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases:

The following table represents lease expenses and other lease information (in thousands):

(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):