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Incentive Plan
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Incentive Plan Incentive Plan
On May 5, 2011, the OceanFirst Financial Corp. 2011 Stock Incentive Plan, which authorizes the granting of stock options or awards of common stock, was approved by stockholders. This plan was subsequently amended on June 2, 2017. In January 2018, the Company implemented a performance-based stock plan for select senior management executives. On May 20, 2020, the OceanFirst Financial Corp. 2020 Stock Incentive Plan, which also authorizes the granting of stock options or awards of common stock, was approved by stockholders. The purpose of these plans is to attract and retain qualified personnel in key positions, provide officers, employees and non-employee directors (“Outside Directors”) with a proprietary interest in the Company as an incentive to contribute to the success of the Company, align the interests of management with those of other stockholders and reward employees for outstanding performance. All officers, other employees and Outside Directors of the Company and its affiliates are eligible to receive awards under the plans.
Under the 2020 Stock Incentive Plan, the Company is authorized to issue up to 2,000,000 shares subject to option or, in lieu of options, up to 800,000 shares in the form of stock awards. At December 31, 2020, 969,294 options or 387,718 awards remain available for issuance. Under the amended 2011 Stock Incentive Plan, the Company is authorized to issue up to an additional 4,000,000 shares subject to option or, in lieu of options, up to 1,600,000 shares in the form of stock awards. At December 31, 2020, 47,690 options or 19,076 awards remain available for issuance.
As part of the Sun acquisition, 491,248 options were granted in 2018 for the conversion of outstanding Sun options. These options had a weighted average exercise price of $21.92 per option and were fully vested upon acquisition. The Company will not recognize compensation expense in the future on these options as they were accounted for as part of the acquisition.
Stock awards generally vest at the rate of 20% per year. The Company granted to senior executives performance-based awards in 2020, 2019 and 2018, which vest in equal amounts over a five-year period (for 2020 and 2019 awards) or a three-year period (for 2018 awards) when a specific performance metric has been attained or exceeded. Tiered performance goals for each metric are aligned with corresponding tiered vesting values and have been set using financial data from the applicable strategic plan as approved by the Board. The Company accrues expense for the performance-based awards based on the estimated probability of achievement of the defined performance goals.
Options expire 10 years from the date of grant and generally vest at the rate of 20% per year. The exercise price of each option equals the closing market price of the Company’s stock on the date of grant. The Company typically issues treasury shares or authorized but unissued shares to satisfy stock option exercises.
The Company recognizes the grant-date fair value of stock options and other stock-based compensation issued to employees in the income statement. The modified prospective transition method was adopted and, as a result, the income statement includes $1.5 million, $973,000, and $1.0 million, of expense for stock option grants and $2.8 million, $2.9 million, and $2.0 million, of expense for stock award grants, for the years ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, the Company had $12.5 million in compensation cost related to non-vested options and stock awards not yet recognized. This cost will be recognized over the remaining vesting period of 3.25 years.
The fair value of stock options granted by the Company was estimated through the use of the Black-Scholes option pricing model applying the following assumptions:
202020192018
Risk-free interest rate1.03 %2.63 %2.65 %
Expected option life7 years7 years7 years
Expected volatility23 %21 %21 %
Expected dividend yield3.33 %2.70 %2.19 %
Weighted average fair value of an option share granted during the year$2.93 $4.47 $5.44 
Intrinsic value of options exercised during the year (in thousands)2,499 2,994 8,513 
The risk-free interest rate is based on the U.S. Treasury rate with a term equal to the expected option life. The expected option life conforms to the Company’s actual experience. Expected volatility is based on actual historical results. Compensation cost is recognized on a straight line basis over the vesting period.
A summary of option activity for the years ended December 31, 2020, 2019 and 2018 is as follows:
 202020192018
 Number
of
Shares		Weighted
Average
Exercise
Price		Number
of
Shares		Weighted
Average
Exercise
Price		Number
of
Shares		Weighted
Average
Exercise
Price
Outstanding at beginning of year2,424,032 $19.80 2,340,842 $18.25 2,489,314 $16.91 
Granted699,651 20.44 461,407 25.20 135,107 27.39 
Assumed in acquisition— — — — 491,248 21.92 
Exercised(213,506)9.50 (227,189)11.24 (765,624)17.69 
Forfeited(6,357)21.26 (149,158)24.71 (9,203)28.42 
Expired(64,953)22.51 (1,870)29.59 — — 
Outstanding at end of year2,838,867 $20.67 2,424,032 $19.80 2,340,842 $18.25 
Options exercisable1,596,927 1,612,946 1,604,576 
The following table summarizes information about stock options outstanding at December 31, 2020:
 Options OutstandingOptions Exercisable
Exercise PricesNumber
of
Options		Weighted
Average
Remaining
Contractual
Life		Weighted
Average
Exercise
Price		Number
of
Options		Weighted
Average
Remaining
Contractual
Life		Weighted
Average
Exercise
Price
9.54 to 14.41
397,734 1.0 years$13.41 397,734 1.0 years$13.41 
14.42 to 19.28
743,519 3.716.72 696,051 3.616.68 
19.29 to 24.15
753,703 8.820.56 48,771 4.522.07 
24.16 to 29.01
943,911 6.526.93 454,371 5.427.62 
2,838,867 5.6 years$20.67 1,596,927 3.5 years$19.14 
The aggregate intrinsic value for stock options outstanding and stock options exercisable at December 31, 2020 was $3.5 million and $3.4 million, respectively.
A summary of the granted but unvested stock award activity for the years ended December 31, 2020, 2019 and 2018 is as follows:
 202020192018
 Number
of
Shares		Weighted
Average
Grant Date
Fair Value		Number
of
Shares		Weighted
Average
Grant Date
Fair Value		Number
of
Shares		Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of year:451,443 $25.61 330,598 $25.92 169,703 $21.79 
Granted256,649 20.38 249,651 24.80 272,668 27.52 
Vested(96,564)24.41 (105,307)24.49 (58,754)20.81 
Forfeited(35,532)26.56 (23,499)26.38 (53,019)26.60 
Outstanding at end of year575,996 $23.42 451,443 $25.61 330,598 $25.92