OCFC

Image source: The Motley Fool. Friday, July 31, 2026 at 11:00 a.m. ET Chief Executive Officer - Christopher Maher President - Joseph Lebel Chief Financial Officer - Patrick Barrett SVP of Corporate Development and Investor Relations - Alfred Goon Alfred Goon: Thank you. Welcome to the OceanFirst second quarter of 2026 earnings call. I am Alfred Goon, SVP of Corporate Development and Investor Relations. Before we kick off the call, we'd like to remind everyone that our quarterly earnings release and related earnings supplement can be found on the company website, OceanFirst.com. Our remarks today may contain forward-looking statements and may refer to non-GAAP financial measures. Participants should refer to our SEC filings for a complete discussion of forward-looking statements and associated risk factors. Thank you, and now I will turn the call over to Christopher Maher, Chief Executive Officer of OceanFirst. Christopher Maher Thank you, Alfred. Good morning. Thank you to all who have been able to join our second quarter of 2026 earnings conference call. This morning I'm joined by our President, Joseph Lebel, and our Chief Financial Officer, Patrick Barrett. We appreciate your interest in our performance and this opportunity to discuss our results with you. This morning we will provide brief remarks about the financial and operating performance for the quarter, and some color regarding the outlook for our business. We may refer to the slides filed in connection with the earnings release throughout the call. After our discussion, we look forward to taking your questions. We reported second quarter results that reflect the closing of our transformational acquisition of Flushing Financial Corporation on June 1. On a GAAP basis, we reported a net loss of $0.04 per fully diluted share, which was driven by $0.47 per share, or $33.6 million, of non-recurring merger-related expenses net of taxes. On a core basis, which excludes non-recurring items, earnings per share was $0.43, or $30.5 million, unchanged from the prior quarter and up 39% from the prior year. Pre-tax, pre-provision core earnings grew by 29% from the prior quarter to $44.5 million. We've seen quarterly improvement in the company's performance in the second quarter of 2025 in net interest income, net interest margin, and return on average assets. This highlights our multi-quarter journey from our revenue-generating investments as we continue to improve towards peer profitability levels. This week our Board also approved the quarterly cash dividend of $0.20 per common share, marking the company's 118th consecutive quarterly cash dividend. As mentioned previously, we complete our acquisition of Flushing Financial Corporation on June 1 concurrent with the $225 million strategic investment from Warburg Pincus, which was priced at $19.76 per share. Flushing added approximately $8.7 billion in total assets, $5 billion in loans, and $7.4 billion in deposits, along with 30 retail branches across New York City and Long Island, bringing our combined franchise to approximately $23 billion in assets. We're thrilled to welcome the Flushing team and their customers to the OceanFirst family. We also repositioned our balance sheet by selling $1.3 billion of multifamily loans acquired from Flushing, which eliminated the majority of our exposure to New York City rent-regulated properties and reduced the bank's commercial real estate concentration by approximately 50 percentage points to 381%. The proceeds were reinvested into highly liquid investment-grade securities. Integration planning is well underway, and we anticipate full integration of Flushing's operations and systems, including the systems conversion and rebranding, by the end of the third quarter of 2026. We're confident in the strategic and financial rationale of this combination, and we are already seeing competitive wins in both talent and customer acquisition. We are on track to achieve the cost savings and returns outlined at the transaction announcement. A significant portion of our cost savings is expected shortly following systems conversion. Pat will provide additional details on the financial impact of the transaction in his remarks. We remain focused on executing our organic growth strategy, which continues to be reflected in our underlying results this quarter, while also approaching the integration of Flushing with a sense of urgency. I'm proud of the pace at which our staff is moving related to both organic initiatives and the Flushing integration. At this point, I'll turn the call over to Joe for additional color on these businesses. Joseph Lebel Thanks, Chris. I'll start with loan originations for the quarter, which totaled $642 million, an increase of 50% from the prior quarter. Excluding the impact of the Flushing acquisition and the multifamily loan sale, the underlying commercial organic loan growth was approximately $154 million, or 2% from the prior quarter, reflecting the company's focus on core relationships. These results underscore the continued strength of the core growth initiatives, which the Flushing franchise will further bolster. The C&I business grew 8% on an annualized basis, reflecting the continued momentum from our recruitment efforts in 2024 and 2025. We've recruited another 17 [ iBankers ] so far in 2026, and will continue to be opportunistic with hiring efforts throughout the remainder of the year. Total deposits grew by $6.6 billion during the quarter to $17.8 billion, driven by the $7.4 billion of deposits acquired from Flushing. Excluding Flushing, deposits declined modestly, primarily due to seasonal outflows in government deposits and a reduction in brokered deposits. Positively, we did see a 6% increase in non-interest-bearing deposits. The premier bank deposits grew by $150 million, while the cost of deposits dropped by 17 basis points. Non-interest-bearing deposits crossed the $100 million mark during the quarter. The group now manages 426 clients and 1,879 accounts and continues to build this momentum. As an added benefit, the premier teams contributed $45 million in loan arrangements for the quarter. Customer engagement and calling activity has been significant, and the addition of Flushing's branch footprint throughout New York City and Long Island now provides tailwind moving forward. We remain confident in our 2026 deposit targets and have recently added 2 new premier teams in Manhattan and Long Island. I wanted to add a brief summary of our calling efforts to date with the Flushing teams in the commercial and retail segments of their market. Clients and notable centers of influence in all segments of the business have been welcoming. They are optimistic that we can continue to support their needs while using the scale of the combined company to grow with them, in some cases, in the commercial bank specifically, grow exponentially. Recent visits in the Asian community specifically have surfaced several significant loan and deposit opportunities in both C&I and CRE. Lastly, non-interest income was $10.6 million during the quarter, up from $6.7 million in the prior quarter, excluding non-core items and Flushing's contribution of $1.4 million. Other income increased $2.5 million, primarily driven by higher net gains on other real estate activity and [ commercial-owned swap income ]. Overall, non-interest income levels were in line with our expectations. With that, I'll turn the call over to Pat to review the remaining areas of the quarter. Patrick Barrett: Thanks, Joe. Good morning, everyone. We delivered our 8th consecutive quarter of net interest income growth, which increased $24 million, or 25% from the prior quarter, $33 million, or 38% from the prior year. This performance was driven by the addition of Flushing, which contributed $19 million of net interest income, with the remaining increase largely reflective of earning asset growth. Interest margin expanded 12 basis points to 3.05%. Loan yields increased, reflecting new originations and the net impact of adding the Flushing portfolio. Total deposit costs were 2.06%, reflecting the addition of Flushing's deposit base. Looking ahead, we expect net interest income to benefit further from a full quarter of the combined franchise. Our underlying asset quality remains strong. Reported ratios this quarter reflect the fair value marks on Flushing's acquired loans, including purchased credit deteriorated loans, which elevated our reported non-performing and criticized loan levels, but are not indicative of underlying credit deterioration. Excluding acquired credit deteriorated loans, non-performing loans to total loans were 0.33%, and non-performing assets to total assets were 0.38%, both consistent with our historically low levels. Criticized and classified loans did increase to 3.12% of total loans impacted by the Flushing acquisition, but still remained below peer averages. The increase in criticized and classified loans was driven by the application of OceanFirst credit rating methodology to the Flushing portfolio, which bears repeating, does not reflect a deterioration in credit performance. We have no inherent concerns in the pro forma customer base. Our allowance for credit losses increased to 1.29% of total loans, primarily reflecting the day 1 reserve established for the Flushing portfolio. Net charge-offs were de minimis, representing only 5 basis points of average total loans on an annualized basis. Turning to expenses, GAAP operating expenses for the quarter were $130 million, including $43 million of merger-related expenses. On a core basis, operating expense of $87 million included approximately $15 million of 1 month of Flushing operations. Excluding Flushing, our core expense base of $72 million continued to reflect disciplined expense management across the company. Capital levels remain strong following the acquisition with an estimated common equity Tier 1 ratio of 10.7% flat to the previous quarter. That capital position was supported by the $225 million strategic investment from Warburg Pincus that funded concurrently with the closing of the Flushing transaction. Book value per share was $18.19, reflecting the impact of purchase accounting and the very substantial increase in our allowance for credit losses. Quick word on taxes. Our reported effective tax rate this quarter was impacted by non-deductible merger expenses and a one-time deferred tax revaluation related to the acquisition. On a normalized basis, our ETR was approximately 28%. Given our new profile, taxability, expect our go-forward rate to remain around that level, absent any tax policy changes for the near term. With the Flushing acquisition now closed, we're updating our guidance on the pro forma combined company for the remainder of 2026. For loans and deposits, we expect 1% to 2% growth from our June 30 levels by year-end. That interest margin should continue to expand to a range of 3.07% to 3.12% in Q3, 3.09% to 3.14% in Q4, subject to average balance, seasonal volatility, and with no rate changes modeled through the second half of the year. We expect other income of $12 million to $16 million per quarter. We expect operating expenses for the third quarter to decline to the $120 million to $125 million range, declining further in the fourth quarter to $110 million to $115 million as cost savings begin to be realized. As we complete the integration of Flushing and mature our efforts to apply AI-driven automation, we expect that operating leverage will continue to improve throughout 2027. Finally, capital is expected to remain strong and grow with earnings from the current level. We plan to provide detailed guidance for 2027 in the fourth quarter, but I just wanted to highlight that our 2027 profitability targets remain essentially unchanged from when we announced the Flushing deal. One last point, just to talk about consensus estimates. While there's a fair amount of variability among individual analysts and line items within our financials, on average, the earnings estimates look reasonable and should be generally aligned with our outlook for the second half of the year and for next year, both of which, again, remain consistent with our initial estimates at the time we announced the transaction. Operator: Our first question comes from Peter Winter from DA Davidson. Peter, your line is open. Peter Winter: Thanks. Good morning. I wanted to start on the margin. The outlook for the second half of the year assumes no rate changes, but can you talk about how you're positioned if we do get 1 or 2 rate hikes? And then second, on page 9 of the presentation, you mentioned that, you know, due to competitive pressures, it could pressure the margin. And then if you could just elaborate on that, and is that contemplated in the margin guidance for the second half of this year? Patrick Barrett: Sure, maybe I'll take a quick, a quick shot. This is Pat. Impact of rate hikes, so when we combine the organization, we absorbed Flushing's liability sensitivity with our relative neutrality on interest rates. It was just shape of where the balance sheets were in respect. We added hedges to that kind of brought us back into a more neutral rate position. So we're modeling something that's modestly liability sensitive, so a rate hike would be very modestly dilutive, if you will, to revenue. I'd say that from a 25-basis-point rate hike on an annual basis would be about a $5 million pre-tax impact to revenues. Conversely, if we got a rate cut, which nobody's modeling, but if we did because of our modest liability sensitivity, that would be about a $4 million a year run rate. So we remain relatively neutral. I think the as important, if not more so, is what happens in the belly of the curve and what happens with 5-year and 10-year rates for new originations and renewals because I think most people would agree that we're at fairly elevated levels for those. We like the shape of the curve, so if there's a parallel increase in the curve, we're kind of indifferent to rate hikes or cuts. And then you'd second part of your question was competitive pressure. I think that's just a continuous pressure on pricing for new loans, particularly the kind of loans that we're considering, so the, both bank and non-bank pressures are keeping spreads on new loans at pretty historically tight levels. Joe, do you wanna add to that? Joseph Lebel I think it's a fair statement. We've seen an increase and a focus on our construction business, which tends to have better margins. So I think, as you've seen in the latest quarter, the average yield is pushing 6.70%, 6.72%, which I think is indicative of us focusing on construction in C&I versus... Peter Winter: You know, permanent CRE loans. Got it. If I could ask on credit, you know, any guidance maybe you can provide with regards to net charge-offs or provision expense in the back half of this year and then also in the press release, mentioned a $21 million commercial relationship that went non-performing, and then 2 commercial relationships for $56 million that went to criticize. Just any details on those loans? Christopher Maher So I guess I'll give you just some sense on net charge-offs. I think as the company gets... Operator: Thank you. We are experiencing I can hear you. Apologies for the brief technical delay. Peter Winter: I am. You started with the charge-off and then I lost you. Christopher Maher Sorry about that. So if you think about net charge-offs, I mean, historically, both OceanFirst and Flushing had, you know, close to, I mean, 5 basis points and 0 in charge-offs in any given quarter. Things are business shifts to more C&I lending, you're going to see that it won't be unusual to have charge-offs from quarter to quarter, but I don't think they're going to be a material impact on profitability. So, slightly higher than our historical performance, but nothing that would stand out or be unusual, and probably still well at or below the peer group levels of net charge-offs. I'm sorry, Peter, your second question was on the criticized loan. Let me just ask Joe to cover that for you. Peter, I'm sorry. Joseph Lebel In the $21 million loan. The bank and the borrower have a plan in place. We believe we're well secure. We have updated appraisals, and I expect that'll resolve itself before the end of the year, either through an upgrade or a refinance. We're well informed on our large borrowers. Okay. It broke up, Joe, on your end, I think. Operator: One moment for technical difficulties, please. Your line is now live. Christopher Maher Operator, we're just checking to make sure the backup line is working. Yes, the backup line has been staged. Please ensure to mute all other lines and microphones in the room and proceed. Christopher Maher Okay. Sorry for that interruption again, Peter. I think we were on the classified loan. I just want Joe to take that from the top again and walk through that. Peter Winter: Right. So he has started with a $21 million commercial. Joseph Lebel So the $21 million CRE loan, we have a plan in place. The borrower and the bank, we expect that will be resolved before the end of the year, either through an upgrade or a refinance. And then on the other assets you referenced and criticized, downgrades come and go quarter over quarter. We're well aware of what we need to do on both sides of the house, and we remain pretty confident. I'll leave it at that. Okay. And then just one quick housekeeping. Just you mentioned with the expense guidance for the third quarter, there's the one-time expense associated with the new digital banking platform. How much is that? Patrick Barrett: It's not significant. It's probably $2 million. Peter Winter: Got it. Okay. Thanks for taking the questions. Patrick Barrett: I just want to demonstrate that we're continuing funding our ongoing platform investments core run rate, which still is hovering kind of at the $70-ish million a quarter range. Operator: Our next question comes from the line of David Bishop with Hovde Group. David, your line is open. David Bishop: Yes, thank you. Good morning, gentlemen. Hey, quick follow-up on the net interest margin in terms of the guidance. Do you think that's going to be mostly driven by the from earning asset yield improvement or still room to move on the deposit side or maybe a combination of both. Just curious how you see that rise sort of occurring? Patrick Barrett: Definitely both. We've got opportunities to improve our funding base and even bigger opportunities with Flushing's funding base as we move forward and kind of and redeploy some of them. So there's really good opportunity on the funding side. On the yield side, I think it kind of depends on the mix and competitive pressures. So the more construction and small business that we do, the better from a straight yield perspective. C&I, which carries with it a lot of other opportunities and self funding, has super tight spreads and is probably the most competitive space right now. David Bishop: Got it. And in terms of the multifamily loans sold there, just curious, is there still sort a banking relationship with those customers or has that been completely divested? Christopher Maher That's a great question, Dave. No, we actually sorted out the primary relationships in that and retained loans for that exact reason. So we retained loans where we had primary relationships and strong deposit profiles. And those customers typically had pretty strong cash flows. So that's one of the ways we kind of split out what we wanted to keep and what we wanted to move away from. So we don't think that'll have any impact on the other areas of the bank. But for the most part, the loans that we sold were lending only relationships. Got it. Appreciate the color. Thanks, Dave. Operator: Our next question comes from the line of Daniel Tamayo with Raymond James. Daniel, your line is open. Daniel Tamayo: Thank you. Good morning, guys. So, yes, I guess maybe just to go back to the margin, I apologize for being a dead horse here. So you reiterated the guidance for the 3.20% margin in 2027 post-merger there. And I guess, you know, can you give us your deposit cost assumptions underlying that margin in '27. You know, it just seems like most banks are talking about and you guys mentioned as well, like competition being pretty stiff right now on the funding side and I think a lot of banks are talking about the pot, you know, funding costs, bottoming. I get, you guys have, uh, the Flushing funding base to integrate but just curious how that plays out maybe there's some color on the Flushing some of the components that how you can lower that, but just trying to get, you know, fill in the gap between maybe funding costs going down where others are saying they're bottoming or maybe even moving up. Christopher Maher I think it's on both sides. Danny, it's Chris Maher. Both sides you're going to see a little bit more of a mix shift than you are kind of environmental trends. So both on the loan side, as Joe mentioned, you know, kind of beefing up. Historically, OceanFirst has done a nice job around construction. So we have an opportunity to do a little more of that moving with the extra balance sheet from Flushing. And then on the deposit side, a mixed shift around products. So the pressure you see out in the markets and others have talked about is out there. You know, CDs cost a fair amount, but we're talking about bringing down the level of brokered. We're talking about optimizing pricing in the government deposit base, particularly in New York. The New York government deposit base is – cost a fair amount more than the New Jersey government deposit base. So we see some tactical opportunities there, but think mixed shift in product. As you saw, you know, we had a nice increase in non-interest-bearing this quarter. Flushing's done a nice job historically over the last several quarters around non-interest. So kind of leaning into that new branch network and doing a little bit of a mix shift. All right. Thanks for that, Chris. So I guess next, just on the expenses, I wanna make sure I understand the guidance. So I think you said it was $2 million for the digital banking, the one-timers within the guy that you put out there Pat. Um, so as we think about kind of back half of the years is that is the way to think about that just taking $2 million off of the $110 million to $115 million or it just from a kind of run rate end of the year number like is it $108 million to $113 million in the fourth quarter and then that's a good number to grow off of. Patrick Barrett: I'd rather think of expenses as a good number to shrink off of as we exit this year, because just remember that the majority of our cost saves are only just kicking in the fourth quarter because of our system conversions that won't be fully completed until the end of the quarter. So there's some cost saves that occur, but the biggest chunk of those will start in the fourth quarter, and then there's continued opportunities to further rationalize vendors as we move into next year. So I would hope that we're on a glide path to continue to bring it down a little bit, even in the face of inflationary pressures. See us with a run rate that's closer to $100 million than $110 million. Christopher Maher That we start out the year. A good way to think about the expense momentum is in Q3, we had some employee separations related to the initial in the merger but as we get into Q4 the systems conversion is likely to happen in September it's been our practice to keep most of the staff you know within the bank for at least 1 month afterwards to make sure that the customer experience is exactly what we want it to be. So you'll see staff departures in earnest at the end of October, which will benefit the fourth quarter a bit, but that will help even more in the first quarter of '27. Daniel Tamayo: Okay. So, I mean, how should we think about the amount of cost saves left in the first quarter? And is the first quarter then the kind of the first clean quarter that we should build on? Or is even '27, you're hoping to take it down from that first quarter number? Christopher Maher The first '27 will be the first clean quarter, but we think there are opportunities to improve operating leverage throughout the year. So even if that means just kind of holding expenses flat or down a little bit, quarter to quarter and avoiding what would be typically the inflationary increase in quarter is going to go through merit increases and that kind of stuff. So and then you'll see, you know, we're planning for more significant growth in loans and deposits in '27. So if you're holding expenses flat or coming down a little bit, the operating leverage... Build up by the end of '27. Okay, great. Thanks for all the color, Chris. Appreciate it. Operator: Our next question comes from the line of Christopher Marinac with [ Brean Capital ]. Christopher, your line is open. Christopher Marinac: Hey, thanks. Good morning. Chris and Pat and team. You've wanted to have a large reserve for a long time, so you're finally here. I guess my question is should we think of this as a permanent change, number 1, and number 2, is the extra tangible book dilution something that we can kind of make up for relatively quickly? Christopher Maher Yes, I think the, you know, we see a lot of earnings momentum going into '27, so I think you'll be building back tangible book value as you go throughout the year. And then one thing I just want to point out, and Pat mentioned this in his comments, if you think about the source of the tangible book value dilution, the source of the tangible the most significant individual line item was the build in the ACL. So we moved what was in the equity account over into the ACL account, which provides for a much stronger balance sheet and more consistent ACL coverage with our peer group, but it's not like that money was, you know, left the company in any way. It's just a stronger ACL. So that was about, if you think about it in dollar terms, that was about $80 million of net reserve billed top of the reserves that both Flushing and OceanFirst had coming into the quarter. So that was the most significant line item. And we certainly don't expect that's loss content. And the second biggest item is the purchase accounting marks, which will come back to us and accrete into income over the next couple of years. So because of the sources of the dilution, we were a little less concerned about that. But we do expect earnings to pick up nicely in '27 and start to build that tangible book back. Great, Chris. Thank you for that background and thanks for hosting us this morning. Operator: All right, thank you. Our next question comes from the line of Emily Lee with KBW. Emily, your line is open. Emily Lee Hey everyone, this Emily stepping in for Tim Switzer. Thanks for taking my question. So, given the progress made in commercial banking initiatives and the recruitment of some revenue-producing talent over the last few years and your commentary on remaining opportunistic on the hiring front, can you maybe dive deeper into any incremental investments you plan to make in that area? Christopher Maher I guess one thing I would say, Emily, is that if you think about the company as we go into the – the recruiting season is typically heaviest in Q1, because you're going to your best commercial bankers have, you know, typically they're having a good year and they like to collect their bonuses from where they are and then move on. So, we expect that hiring season really to be in Q1. We have already seen an uptick in interest from qualified commercial bankers who really like first the coverage in New York that we got from Flushing. So we're talking to commercial bankers in New York that wouldn't, I think, have considered us as strong an opportunity as they did in the past. And then there's just the dynamics of having a larger balance sheet, bigger capital base. So players from larger banks, which is typically our recruiting base, would feel more comfortable coming to a firm of the size we are now. So I think we've got, we will be a more attractive destination for talent in the future, the first quarter. At this point, we don't expect any significant increase in expenses because we think that we can self-fund a lot of this through technology initiatives and through kind of the rotation of how we spend our money instead of spending a net extra. But, you know, we'll keep everybody posted. And if we have good news in the first half of next year, we're able to hire more bankers than we thought, we'll certainly give you updated guidance. Emily Lee That's really helpful. Thank you. And then just on capital, following the completion of the Flushing acquisition, can you discuss your capital priorities going forward? What level of repurchases should we anticipate going forward? And do you have any appetite for further bank M&A, maybe in 2027 or beyond? Christopher Maher So we take the priorities are pretty straightforward. I mean, our best priority is always organic growth, and so we hope to be able to use the capital we expect to accrete in organic growth next year. So that's the biggest priority. But we're always very discriminating about the credits we put on and the spreads and managing our margin. So if we don't find the right quality of growth and we wind up with an excess capital position, our number 1 priority would be buybacks. And that's it. We're heads down focused on the franchise right now. We're not talking about M&A. Emily Lee Great. Well, thanks for taking my questions. Congrats on the quarter. Thank you. Our next question comes from the line of Matthew Breese with Stephens Inc. Matthew, your line is open. Matthew Breese Hey, good morning. Good morning, Matt. I was hoping we could start with maybe overall balance sheet size kind of thoughts and guidance. And I guess I'm most curious about the interplay between loan growth and securities from here. You know, should we be thinking there's, you know, like a 1-for-1 offset, you know, securities into loans, basically maintaining a flat balance sheet? And if that is the case, how long do you anticipate that dynamic going on for? Christopher Maher Oh, that's a good question, Matt. So if you were to kind of go back a step, we did inflate to a degree the amount of securities in the balance sheet when we did the loan sale. Curiously, we were able to buy securities at a lower risk weight that had a higher yield than the loans that we sold. So it wound up being a very good trade. As we go forward, we're probably a little heavy in securities, so we'd pull that down a little bit. But we do want to maintain a pretty good liquidity position. We think that's one of the most important things we achieved this quarter in terms of making sure we had on-hand liquidity, a lower loan-to-deposit ratio and all that. So the first place we would go is pulling down securities a little bit. So I think you'll see a flattish balance sheet this year, and then to the extent you'll see any growth, it would probably be coming in '27, but after we've kind of massaged the securities number a little bit. Matthew Breese I guess my follow up there is, does that balance sheet outlook, that what's giving you the flexibility and the opportunity the kind of test run higher cost community deposits, maybe work offs from brokered deposits and lower deposit costs. I think the spot costs at the end of the quarter is 2.26%, right? About 20 basis points higher. Is that what's providing you the room to kind lower that from current levels and see where it goes? Patrick Barrett: Absolutely. That's the chief advantage of having that excess liquidity in the lower loan-to-deposit ratio. We don't have to be as kind of careful. We don't have to match the market every day. But I will say that to give you longer term guidance, we think being more liquid, all things equal, makes us a more valuable franchise. So you might see loan to deposit pick up a little bit, but you still think of it as staying below 95%, as opposed to in the past, we would have been closer to 100%. But we will use that advantage in the way we think about pricing. I will add, Matt, this is Pat. There's probably $300 million or $400 million of securities where we parked them just because the yields were better than leaving them in cash. We'll look to recycle those and maybe some cash flows into better yielding opportunities as they come up. Most of that will probably, hopefully be done this quarter, in the third quarter, but we didn't have much time and we wanted to put all the cash to work as fast as we could. So there'll be some churn there, but it shouldn't affect the overall magnitude of the portfolio or the mix of loans versus securities. Matthew Breese Okay. I do want to come back to that, but just one more on kind of balance sheet mix. What is the strategy with the remaining stub amount of rent regulated multifamily? Is that saleable at similar marks? Is that something you intend to do, or is that more of a work down over time through maturities and payoffs? Also curious, same question line. If there's anything else within the Flushing kind of loan portfolio that we should think of as running off or, you know, getting rid of on an expedited basis. So I would consider that asset class to be in a runoff posture, so we expect that it's going to decline slowly over the next probably 8 to 12 quarters. I will make the point that those were pretty good loans. We had loans to deposit customers. We had loans there that might have had an interest rate swap or a participant position. It just made them less liquid. You really couldn't sell them into a capital markets execution. You know, but strong debt service, very low LTVs, delinquencies, de minimis. We're happy to have those clients and just let that kind of resolve itself over time. That said, you know, we recognize that there's a public policy risk to the asset class. So we've got a 14.5% credit reserve against them. So we've marked them pretty aggressively. But it's small. It's going to run off. And, you know, we'll just kind of see that happening slowly over probably 2 to 3 years. And I would say these aren't bad assets tonight. So these are 50% LTVs, 1.40x debt service coverage, 5% LTVs, and 1.5% average yield of what we're left with. They were just not as easily securitizable, so they weren't as fast to sell at as high a price because of that feature, which is why they didn't go into an even larger pool of sale that we did in June. I think your second question, Matt, about other assets, I think we're done with the balance sheet restructure. This is kind of where we are. It's kind of a clean, you know, July 1 balance sheet to then move off of, and we're focused on, you know, organically growing that, as we outlined earlier. Matthew Breese Okay, and then my last one going back to the NIM, you know, let's just assume that the down a little bit. Still implies that there's quite a bit of moving pieces on the earning assets side to get to that third quarter range. Can you just help me out with your expectations for kind of loan yield, and obviously there's accretion that impacts that. And Pat, you'd mentioned, you know, some movement of securities portfolio. Could you just give us some idea of where yields on those two components will shake out that's kind of supporting the NIM range for the third quarter. And that's all I have. Thank you. One thing I'd point out is that, you know, just like the deposit spot costs, on the loan side, we only had 1 month worth of purchase accounting accretion on the loan side. So you're going to see a little bit of an offset there as we experience a full quarter's worth of kind of mark on that loan portfolio. So that'll be helpful in terms of bringing the loan yields up. Yes. Probably the biggest driver of that is the full quarter's worth of accretion moving. So we had about $8 million of accretion in second quarter, net interest income, and we'll have $16 million, $17 million, $18 million as we move into the next quarter on a run rate basis. Matthew Breese Okay, I'll leave it there. Thank you very much. I know I asked a lot. Thank you. Operator: Our next question comes from the line of Manuel Navas with Piper Sandler. Manuel, your line is open. Manuel Navas Staying on the balance sheet for a moment, can you talk about the hedging strategy a bit? Flushing was liability sensitive. What are you putting on? And how long is it termed out for? Does it contemplate you shifting your own funding base eventually not need that in the future. Just kind of talk through that a bit, please. Christopher Maher I'll let Pat walk you through the duration and all that. But you think about philosophically, we want to run a reasonably balanced shop. We were pretty neutral prior to the acquisition, as Pat mentioned, made us liability sensitive. So what we were focused on with the hedges is the more of the tail risk, like outside the normal operating environment, because the normal, you know, plus or minus 100 basis points really doesn't move the number much for us. But what you would have seen if you looked at our interest rate risk models without the hedges, you would have seen more risk going in the kind of plus 200, plus 300, plus 400, and minus 200, 300, and 400. So it was really an exercise around limiting our longer-term risk. You might talk about the duration and our return to the more neutral position over time. Patrick Barrett: Sure. So yes, and the hedges that we did put on were essentially caps and collars, as Chris mentioned, just to hedge against spikes, larger increases about $1.3 billion that ranged out over 3-, 4-, 5-, 6-year kind of period. And what we're left with is some modest liability sensitivity that is largely driven by the fixed rates on the deposit side inherited. So as we roll out of deposits, more fixed rate deposits and into non-maturity will continue to help that. And our goal would be to have to have a relatively neutral balance sheet because predicting short-term rates is pretty to be very difficult. Predicting long term rates is proven to be very difficult, so we feel like staying short is the way to go. From a duration perspective, we've ticked up our duration modestly with the acquisition. We're probably in the 4 to 5 range on the asset side years duration, and the securities duration is ticked up along with the loans. Are both in that range on the liability side, for the most part, we remain quite short. Manuel Navas That's helpful. Can I shift to kind of loan growth drivers? It seems like the, just kind of walk through the, the loan portfolio places where you might see continued runoff. There's a comment of resis running off, but also you have a lot of legacy momentum in the commercial side. If you could just talk about go forward loan growth makes a bit and when does the Flushing team kind of add even more to it? Christopher Maher I'll make a couple comments, I'm sure Joe will add in as well. So some of the momentum is just by adding the commercial bankers, as Joe talked about, new bankers, new relationships. As we've seen in other times when we've made acquisitions, we think hopefully a meaningful opportunity in the Flushing base to become a bigger part of many of these clients' kind of wallet share. So just by nature of the size of the balance sheet and loan limits and things like that, we've already met just a wonderful group of long-term Flushing clients who can do more with us than they could with Flushing. And I think that could be a meaningful driver over the next several quarters. But Joe, anything you'd add? Joseph Lebel I think the – I'd add 2 things. One, typically when you do these, there's a little bit of a lull just because clients are trying to assess the combined entity and quite frankly, some of your salespeople are as well. But as Chris mentioned, we've got a pretty good positive outcome pretty early on. We've done a variety of customer events and days in market, which I think have been really valuable for us and the client base. I think is really going to make a difference. And remember, the vast majority of the Flushing book was smaller CRE transactions. They had a fledgling C&I business. So the opportunity to do things at a larger scale with a little bit more, a little bit more boots on the ground, and some sophistication, I think, is going to really benefit. It's one of the densest markets in the country. And individual portfolios, you have... Manuel Navas Some expected runoff in residential. We talked about the rent regulated is going to run off slowly. Where are some of the headwinds? Christopher Maher Those are certainly headwinds, but I think the guidance we gave you around growth in '27 would be net of those headwinds. So that's kind of where we would be. I'd also note that we think our wind percentage in New York is going to go up. So as you recall, we entered New York in 2019 with 5 branches at $2 billion franchise. We were doing well and winning clients, but adding the 30 branches and the visibility of that, we think is going to be very helpful. I mentioned in my comments that we will rebrand the Flushing branches. That'll be done by October 1. And one of the reasons you see a slight elevation in expenses in Q4 is we expect to do a significant kind of brand launch in New York that will, we hope, provide a little more visibility and credibility. So the wind percentage in New York, we think, is going to be better in '27 than it was in 2026, because people will just know us better, feel more comfortable. It's hard to pin down, but there's a comfort level people get when they drive by your branches, even if they never walk through them. Manuel Navas Okay. That makes sense. My final one is, obviously, 1% ROA next year isn't the final target. With things closed now, what are kind of your thoughts on how you can exit '27 with the trajectory to a better ROA and the best ways to accomplish that. So, I mean, I think long-term ROA targets, the minimum floor for us would be more like a 1.20%. If you don't get to that level, our capital levels are going to remain reasonably range bound. So you're not going to get to your cost of capital unless you're somewhere up in that area or better. So I think in '27, it's to not just get to a 1%, but get above a 1%, exit the year strong, and then look towards that target in '28. Manuel Navas Executing on cost saves, more substantial loan growth, getting the 3.20% NIM, any other pieces to that? Better trajectory? I think I think if we do those things, it all holds together. You know, you've got you know, we think that over time is the balance sheet grows, we would get non-interest expenses closer to a range of like 175 basis points, 1.75%. You couple that with a 3.20% margin, and you're doing pretty well. Manuel Navas Thank you for the commentary. Operator: Our next question comes from the line of Matthew Breese with Stephens Inc. Matthew, your line is open. Matthew Breese Just a quick follow-up point of clarification. Pat, I think you had said $8 million in accretable yield this quarter. The press release says net accretion was closer to, I don't know, $1.1 million, $1.2 million. I was modeling like $4.5 million, $5 million next quarter. I think you were referring just to the loan side. Maybe you could clarify. Patrick Barrett: You're absolutely right. It was about $1 million in June, 1 month. That will be about $5 million in the third quarter. And it's driven off in part off of loan maturities. It'll drop down a little bit, $3 million-ish, maybe a little under that in the fourth quarter. So the full year impact for this year is a little over $8 million. That will double and will be $16 million, $17 million, $18 million year for at least the next 2 to 3 years. Matthew Breese OK, that's it. I'll leave it there. Thank you. Thank you. Sorry for the misspoke. Operator: We have reached the end of our Q&A session. I will now turn the call back to Christopher for closing remarks. Christopher Maher Thank you. We appreciate your time today and your continued support of OceanFirst Financial Corp. We look forward to speaking with you in October about our third quarter results, and we'll provide an update in our merger integration at that point, too. Thanks very much. Enjoy the rest of your summer. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in OceanFirst Financial, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and OceanFirst Financial wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. OceanFirst Financial (OCFC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Core earnings per share of $0.43 were unchanged from the prior quarter and up 39% year-over-year, with pre-tax, pre-provision core earnings growing 29% sequentially. The transformational acquisition of Flushing Financial Corporation closed on June 1, 2026, adding approximately $8.7 billion in assets, $5 billion in loans, and $7.4 billion in deposits, creating a combined franchise of about $23 billion in assets. Net interest income grew for the eighth consecutive quarter, increasing 25% from the prior quarter and 38% from the prior year, with net interest margin expanding 12 basis points to 3.05%. Underlying asset quality remains strong, with non-performing loans to total loans at 0.33% and non-performing assets to total assets at 0.38% (excluding acquired credit deteriorated loans), consistent with historically low levels. The company successfully repositioned its balance sheet by selling $1.3 billion of multi-family loans, eliminating most exposure to New York City rent-regulated properties and reducing commercial real estate concentration by approximately 50% points to 381%. Organic commercial loan growth was approximately $154 million (2% from the prior quarter), with C&I business growing 8% on an annualized basis, reflecting continued momentum from recruitment efforts. Deposit costs dropped by 17 basis points, and non-interest-bearing deposits increased 6%, with Premier Bank deposits growing by $150 million and crossing the $100 million mark. The company remains on track to achieve its cost savings and returns targets, with a significant portion of cost savings expected shortly after systems conversion, and management reiterated its 2027 profitability targets. Capital levels remain strong with an estimated common equity tier 1 ratio of 10.7%, supported by a $225 million strategic investment from Warburg Pincus. The company has a clear path to margin expansion, with guidance for net interest margin to reach 307-312 basis points in Q3 and 309-314 in Q4, driven by full-quarter accretion and funding optimization. GAAP net loss of $0.04 per share was driven by $0.47 per share (or $33.6 million) of non-recurring merger-related expenses, net of taxes. Tangible book value per share declined to $18.19, reflecting the impact of purchase accounting and a substantial increase in the allowance for credit losses. Criticized and classified loans increased to 3.12% of total loans, impacted by the Flushing acquisition and the application of OceanFirst's credit rating methodology, though management notes this does not reflect credit deterioration. The company faces competitive pressures on loan pricing, with spreads on new loans at historically tight levels, particularly in the C&I space. The company is modestly liability sensitive, and a 25 basis point rate hike would have a $5 million annual pre-tax impact on revenues, while a rate cut would have a $4 million impact. Excluding Flushing, deposits declined modestly due to seasonal outflows in government deposits and a reduction in broker deposits. The company expects a flat balance sheet for the remainder of 2026, with loan and deposit growth of only 1-2% from June 30 levels by year-end. Operating expenses are expected to remain elevated in Q3 (120-125 million) and Q4 (110-115 million) as integration costs and brand launch expenses are incurred, before cost savings fully materialize. The remaining rent-regulated multi-family loans are in a runoff posture, expected to decline slowly over the next 8-12 quarters, which could limit loan growth. The effective tax rate is expected to remain around 28% going forward, which is higher than historical levels due to the company's new profile taxability. Warning! GuruFocus has detected 6 Warning Signs with OCFC. Is OCFC fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide details on the margin outlook for the second half of 2026, including the impact of potential rate hikes and competitive pressures?A: Pat Barrett (CFO) explained that the combined company is modestly liability-sensitive, with a 25 basis point rate hike having about a $5 million annual pre-tax impact on revenues, while a rate cut would be about a $4 million benefit. He emphasized that the shape of the curve and 5-10 year rates are more important for originations. Regarding competitive pressures, he noted that bank and nonbank competition keeps spreads on new loans historically tight, but the company is focusing more on construction lending, which has better yields (average yield pushing 6.70%-6.72%). Q: What is the guidance for net charge-offs and provision expense in the back half of 2026, and can you provide details on the $21 million non-performing commercial relationship and the $56 million criticized loans?A: Pat Barrett (CFO) stated that charge-offs will likely be slightly higher than the historical 5 basis points but not material to profitability, remaining at or below peer levels. Joe Labelle (President) provided details on the $21 million loan, noting that the bank and borrower have a plan in place, they are well-secured with updated appraisals, and expect resolution by year-end through either an upgrade or refinance. He expressed confidence in their awareness of large borrower situations. Q: Is the margin expansion in the guidance driven more by earning asset yield improvement or deposit cost reduction?A: Pat Barrett (CFO) said it's definitely both. There are opportunities to improve the funding base, especially with Flushing's funding base, by redeploying excess liquidity. On the yield side, it depends on mix and competitive pressures, with more construction and small business lending being beneficial. C&I lending has super tight spreads and is the most competitive space currently. Q: Regarding the multi-family loans sold, is there still a banking relationship with those customers, or has that been completely divested?A: Joe Labelle (President) clarified that they sorted out the primary relationships and retained loans for customers with strong deposit profiles and cash flow. The loans sold were primarily lending-only relationships, so there shouldn't be an impact on other areas of the bank. Q: Can you provide the deposit cost assumptions underlying the 3.20% margin guidance for 2027, given competitive funding pressures?A: Christopher Maher (CEO) explained that the improvement will come from mix shifts rather than environmental trends. On the loan side, they'll focus more on construction. On the deposit side, they plan to reduce broker deposits, optimize pricing in the government deposit base (especially in New York where costs are higher), and lean into the new branch network to increase non-interest-bearing deposits. Flushing has done a nice job with non-interest-bearing deposits historically. Q: How should we think about the expense guidance, particularly the one-time digital banking platform expense and the run rate going into 2027?A: Pat Barrett (CFO) noted the digital banking expense is about $2 million. He emphasized that expenses should be viewed as a number to shrink off of as they exit 2026, since the majority of cost savings kick in during Q4 after systems conversion. Christopher Maher (CEO) added that staff departures will occur in earnest at the end of October, benefiting Q4 and even more so Q1 2027. They expect a run rate closer to $100 million than $110 million entering 2027. Q: Should we view the large reserve build as a permanent change, and can the tangible book value dilution be made up relatively quickly?A: Christopher Maher (CEO) stated that the most significant source of tangible book value dilution was the $80 million net reserve build, which moved money from equity into the ACL account, strengthening the balance sheet without leaving the company. The second biggest item is purchase accounting marks, which will come back as accretable income over the next couple of years. He expects earnings to pick up nicely in 2027 and start building tangible book value back. Q: Given the progress in commercial banking initiatives, what incremental investments do you plan to make in hiring?A: Christopher Maher (CEO) explained that the recruiting season is typically heaviest in Q1. The Flushing acquisition has made them more attractive to commercial bankers in New York, and the larger balance sheet makes them more appealing to talent from larger banks. They don't expect significant expense increases as they can self-fund through technology initiatives and spending rotation, but will provide updated guidance if they hire more bankers than expected. Q: What are your capital priorities following the Flushing acquisition, including buybacks and appetite for further M&A?A: Christopher Maher (CEO) stated that organic growth is the biggest priority for capital. If they don't find the right quality of growth at appropriate spreads, buybacks would be the number one priority. They are heads down focused on the current franchise and not discussing M&A at this time. Q: Can you discuss the overall balance sheet size and the interplay between loan growth and securities?A: Christopher Maher (CEO) explained that they inflated securities somewhat with the loan sale, but it was a good trade since securities had lower risk weight and higher yield than the loans sold. They're probably a little heavy in securities and will pull that down, maintaining a flat-ish balance sheet this year with growth potentially coming in 2027. Pat Barrett (CFO) added there's $300-400 million of securities parked for yield purposes that they'll look to recycle into better opportunities, mostly in Q3. Q: What is the strategy for the remaining rent-regulated multi-family loans, and are there other assets to run off?A: Christopher Maher (CEO) stated the asset class is in a runoff posture, declining slowly over the next 8-12 quarters. The remaining loans are good quality with 50% LTVs, 1.40 debt service coverage, and 5.5% average yield, but weren't as easily securitizable. They have a 14.5% credit reserve against them. He confirmed they're done with balance sheet restructuring and have a clean July 1st balance sheet to move forward from. Q: Can you explain the hedging strategy, including what was put on and For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in OceanFirst Financial Corp.? Here are five stocks we like better. Flushing Financial acquisition reshaped OceanFirst: The June 1 transaction added approximately $8.7 billion in assets, $5 billion in loans, $7.4 billion in deposits and 30 branches, bringing the combined company to roughly $23 billion in assets. Merger-related costs produced a GAAP loss of $0.04 per share, while core earnings were $0.43 per share. Balance-sheet growth came with risk reduction: OceanFirst sold $1.3 billion of acquired multifamily loans, cutting its commercial real estate concentration by about 50 percentage points and reducing exposure to New York City rent-regulated properties. Underlying credit metrics remained relatively stable, with nonperforming loans at 0.33% excluding acquired credit-deteriorated loans. Management expects improving profitability in the second half of 2026: The company projects modest 1%–2% loan and deposit growth, higher net interest margins, and declining expenses as integration savings emerge. Systems conversion and rebranding are expected by the end of the third quarter, with staffing-related savings benefiting results more fully in early 2027. OceanFirst Financial (NASDAQ:OCFC) reported a second-quarter GAAP net loss of $0.04 per diluted share after recording $33.6 million of after-tax merger-related expenses tied to its acquisition of Flushing Financial Corporation. On a core basis, excluding non-recurring items, the company earned $0.43 per share, or $30.5 million, unchanged from the prior quarter and 39% above the prior-year period. Management said the quarter reflected the June 1 closing of the Flushing acquisition, which added approximately $8.7 billion in assets, $5 billion in loans, $7.4 billion in deposits and 30 retail branches across New York City and Long Island. The combined company now has about $23 billion in assets. The transaction also included a $225 million strategic investment from Warburg Pincus, priced at $19.76 per share. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company’s board approved a quarterly cash dividend of $0.20 per common share, its 118th consecutive quarterly cash dividend. OceanFirst said net interest income rose $24 million, or 25%, from the first quarter and $33 million, or 38%, from a year earlier. Chief Financial Officer Pat Barrett said Flushing contributed $19 million of net interest income, while the balance of the increase was largely attributable to earning-asset growth. → Microsoft Just Flipped the AI Spending Narrative Overnight Net interest margin expanded 12 basis points sequentially to 3.05%. Barrett said loan yields benefited from new originations and the acquired Flushing portfolio, while total deposit costs were 2.06% following the addition of Flushing’s deposits. The company also sold $1.3 billion of multifamily loans acquired from Flushing. Management said the sale removed most of its exposure to New York City rent-regulated properties and reduced its commercial real estate concentration by about 50 percentage points to 381%. Proceeds were invested in highly liquid, investment-grade securities. → Carrier Earnings Could Send the Stock to a New All-Time High During the question-and-answer session, management said it retained multifamily relationships where it held primary customer relationships and strong deposit balances. The remaining rent-regulated multifamily portfolio is expected to be in runoff over the next eight to 12 quarters. Management described the remaining assets as having low loan-to-value ratios and strong debt-service coverage, while noting the asset class carries public-policy risk. President and COO Joseph Lebel said quarterly loan originations totaled $642 million, up 50% from the prior quarter. Excluding the Flushing acquisition and multifamily loan sale, underlying commercial organic loan growth was approximately $154 million, or 2% sequentially. Commercial and industrial lending grew at an 8% annualized rate. Lebel said the company recruited 17 C&I bankers during the first half of 2026 and plans to remain opportunistic in hiring. Management expects the enlarged New York footprint and larger balance sheet to improve its ability to recruit commercial banking talent and expand relationships with Flushing customers. Total deposits increased $6.6 billion to $17.8 billion, driven by the acquired Flushing deposits. Excluding Flushing, deposits declined modestly because of seasonal government-deposit outflows and lower brokered deposits. However, noninterest-bearing deposits rose 6%. Lebel said the company’s Premier Bank deposits increased $150 million while their cost declined by 17 basis points. The Premier Bank group managed 426 clients and 1,879 accounts, and contributed $45 million in loan originations during the quarter. Management said it expects a relatively flat balance sheet for the rest of 2026 as it reduces a temporarily elevated securities position and maintains strong liquidity. The company said it intends to keep its loan-to-deposit ratio below 95%, giving it flexibility to lower higher-cost funding, including brokered deposits. Barrett said reported asset-quality ratios were affected by fair-value marks on Flushing’s acquired loans, including purchased credit-deteriorated loans, and did not indicate underlying credit deterioration. Excluding acquired credit-deteriorated loans, nonperforming loans represented 0.33% of total loans and nonperforming assets represented 0.38% of total assets. Criticized and classified loans increased to 3.12% of total loans, primarily because OceanFirst applied its credit-rating methodology to the acquired Flushing portfolio. The allowance for credit losses rose to 1.29% of total loans, largely due to the day-one reserve established for Flushing loans. Net charge-offs were 5 basis points of average total loans on an annualized basis. Management discussed a $21 million commercial real estate loan that became nonperforming, saying the bank and borrower have a plan in place and that it expects the loan to be resolved through an upgrade or refinancing before year-end. It did not provide further details on two commercial relationships totaling $56 million that moved to criticized status. GAAP operating expenses were $130 million, including $43 million of merger-related expenses. Core operating expenses were $87 million, including about $15 million from one month of Flushing operations. Excluding Flushing, OceanFirst’s core expense base was approximately $72 million. The company expects to complete Flushing’s systems conversion and rebranding by the end of the third quarter. Management said a significant share of expected cost savings should follow the conversion, although most staffing-related savings are expected to benefit the first quarter of 2027 more fully. For the remainder of 2026, OceanFirst expects loans and deposits to grow 1% to 2% from June 30 levels. It forecast net interest margin of 3.07% to 3.12% in the third quarter and 3.09% to 3.14% in the fourth quarter, assuming no interest-rate changes in the second half. Management expects other income of $12 million to $16 million per quarter. Operating expenses are projected at $120 million to $125 million in the third quarter and $110 million to $115 million in the fourth quarter as merger cost savings begin to take effect. Barrett said the company expects purchase-accounting accretion to contribute about $5 million in the third quarter and roughly $3 million in the fourth quarter. The company expects annual accretion of approximately $16 million to $18 million for at least the next two to three years. Capital remained strong, with an estimated common equity tier 1 ratio of 10.7%, unchanged from the prior quarter. Tangible book value per share was $18.19, reflecting purchase accounting and the higher credit-loss allowance. Management said its immediate capital priority is funding organic growth, with share repurchases the preferred use for excess capital if suitable growth opportunities do not materialize. OceanFirst Financial Corporation (NASDAQ: OCFC) is a bank holding company headquartered in Toms River, New Jersey, that provides a full range of community banking and financial services through its principal subsidiary, OceanFirst Bank. Established in the early 20th century, the company has built its business around serving the deposit, lending and wealth management needs of individuals, small businesses, municipalities and nonprofit organizations across New Jersey and portions of New York. The company's core activities include accepting consumer and business deposits, making commercial, municipal and consumer loans, and offering residential mortgage financing. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "OceanFirst Financial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Closed the acquisition of Flushing Financial Corporation on June 1, adding approximately $8.7 billion in assets and expanding the retail footprint across New York City and Long Island. Executed a significant balance sheet repositioning by selling $1.3 billion in multifamily loans to eliminate the majority of exposure to New York City rent-regulated properties. Reduced commercial real estate concentration by approximately 50 percentage points to 381% through the strategic loan sale and reinvestment into liquid investment-grade securities. Achieved an 8% annualized growth in C&I business, driven by momentum from aggressive recruitment efforts in 2024 and 2025. Reported core earnings per share of $0.43, reflecting a 39% increase from the prior year as the company progresses toward peer profitability levels. Maintained strong asset quality with non-performing loans at 0.33% of total loans, excluding acquired credit-deteriorated assets from the Flushing transaction. Leveraged a $225 million strategic investment from Warburg Pincus to support capital levels and fund the transformational acquisition. Anticipates full integration of Flushing operations, including systems conversion and rebranding, by the end of the third quarter of 2026. Projects net interest margin expansion to a range of 3.07% to 3.12% in Q3 and 3.09% to 3.14% in Q4, assuming no interest rate changes. Expects operating expenses to decline to the $110 million to $115 million range by Q4 2026 as cost savings from the merger begin to be realized. Targets 1% to 2% growth for both loans and deposits from June 30 levels through the end of the year. Aims for a long-term return on average assets (ROA) floor of 1.20% by 2028, with 2027 serving as the first clean year of combined operations. Recorded a GAAP net loss of $0.04 per share due to $33.6 million in non-recurring merger-related expenses. Increased the allowance for credit losses to 1.29% of total loans, primarily reflecting the day 1 reserve establishment for the Flushing portfolio. Noted an increase in criticized and classified loans to 3.12%, driven by the application of OceanFirst's stricter credit rating methodology rather than underlying deterioration. Identified public policy risk in the remaining rent-regulated multifamily portfolio, which is now in a runoff posture with a 14.5% credit reserve. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed the bank is now modestly liability-sensitive after adding hedges to offset Flushing's original profile. A 25-basis-point rate hike would result in a $5 million annual pre-tax revenue headwind, while a cut would provide a $4 million benefit. The majority of cost savings will kick in during Q4 2026 following the September systems conversion. Management plans to retain most staff for one month post-conversion to ensure customer experience before realizing significant personnel departures in late October. The $1.3 billion loan sale focused on lending-only relationships, while the bank retained loans where primary deposit relationships and strong cash flows existed. The remaining rent-regulated portfolio is expected to run off over the next 8 to 12 quarters. Net accretion was approximately $1 million in June and is expected to rise to $5 million in Q3 as a full quarter of Flushing's portfolio is recognized. Management expects the annual impact of accretion to be between $16 million and $18 million for the next two to three years.

OceanFirst Financial (OCFC) came out with quarterly earnings of $0.43 per share, beating the Zacks Consensus Estimate of $0.42 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.38%. A quarter ago, it was expected that this holding company for OceanFirst Bank would post earnings of $0.39 per share when it actually produced earnings of $0.43, delivering a surprise of +10.26%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. OceanFirst, which belongs to the Zacks Financial - Savings and Loan industry, posted revenues of $131.33 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.74%. This compares to year-ago revenues of $99.37 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. OceanFirst shares have added about 9.9% since the beginning of the year versus the S&P 500's gain of 6.9%. While OceanFirst has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for OceanFirst was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $176.47 million in revenues for the coming quarter and $1.85 on $589.65 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Savings and Loan is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Finance sector, Carlyle Secured Lending, Inc. (CGBD), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.32 per share in its upcoming report, which represents a year-over-year change of -18%. The consensus EPS estimate for the quarter has been revised 4.3% lower over the last 30 days to the current level. Carlyle Secured Lending, Inc.'s revenues are expected to be $38.41 million, down 15.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report OceanFirst Financial Corp. (OCFC) : Free Stock Analysis Report Carlyle Secured Lending, Inc. (CGBD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RED BANK, N.J., July 30, 2026 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:OCFC) (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), reported a net loss of $3.0 million, or $0.04 per diluted share1, for the three months ended June 30, 2026, compared to net income available for common stockholders of $16.2 million, or $0.28 per diluted share, for the corresponding prior year period, and net income of $20.5 million, or $0.36 per diluted share, for the linked quarter. For the six months ended June 30, 2026, the Company reported net income available to common stockholders of $17.5 million, or $0.27 per diluted share, as compared to $36.7 million, or $0.63 per diluted share, for the corresponding prior year period. Selected performance metrics are as follows (refer to “Selected Quarterly Financial Data” for additional information): (a) Return on average tangible stockholders’ equity and return on average tangible common equity are non-GAAP (“generally accepted accounting principles”) financial measures. Refer to “Explanation of Non-GAAP Financial Measures” and tables included in this release for reconciliation and additional information regarding non-GAAP financial measures. Core earnings2 for the three and six months ended June 30, 2026 were $30.5 million and $54.9 million, respectively, or $0.43 and $0.86 per diluted share, an increase from $17.7 million and $38.0 million, respectively, or $0.31 and $0.66 per diluted share, for the corresponding prior year periods, and an increase from $24.3 million, while remaining flat at $0.43 per diluted share, for the linked quarter. Core earnings PTPP2 for the three and six months ended June 30, 2026 were $44.5 million and $78.9 million, respectively, or $0.63 and $1.24 per diluted share, an increase from $26.4 million and $58.8 million, respectively, or $0.46 and $1.02 per diluted share, for the corresponding prior year periods, and an increase from $34.4 million or $0.60 per diluted share, for the linked quarter. Selected performance metrics are as follows: Key developments for the quarter, compared to the linked quarter, are described below: Organic Growth: The Company generated continued organic growth across its legacy portfolio, with commercial loans increasing $154 million, or 2%, non-interest bearing deposits increasing $101 million, or 6%, and $150 million of deposit growth from Premier Banking teams, reflecting the Company’s focus on core relationships. These results underscore the continued strength of the core growth initiatives, which the Flushing franchise will further bolster. Net Interest Margin Expansion: Net interest margin increased 12 basis points to 3.05% from 2.93%, and net interest income increased by $24.3 million to $120.7 million. Flushing Acquisition: On June 1, 2026, the Company completed its acquisition of Flushing Financial Corporation (“Flushing”), the holding company of Flushing Bank. Flushing added $8.69 billion to total assets, $6.19 billion to loans and loans held for sale, and $7.44 billion to deposits. Flushing added 30 retail branches across New York City and Long Island. Balance Sheet Repositioning: The Company sold $1.31 billion of multifamily loans from the Flushing acquisition at a price of 92.25% and invested the $1.20 billion of net proceeds into highly-liquid, investment grade securities. The repositioning reduces commercial real estate concentration by approximately 50 percentage points to 381%3, while increasing liquidity as indicated by on-hand liquidity4 increasing to 11.5% of assets and the loan-to-deposit ratio falling to 91.60%. Additionally, the allowance for credit losses increased to 1.29% of total loans receivable. Operating Expenses: The Company anticipates full integration of Flushing’s operations and systems in the third quarter of 2026. The resulting operating synergies are expected to improve efficiency and reduce operating expenses in future periods. Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “We are pleased to see continued momentum in our core business and to have welcomed Flushing into the OceanFirst family during the quarter. Full integration and the rebranding of Flushing branches is scheduled to occur in the third quarter of 2026, allowing for the realization of synergies well before year-end. We look forward to building on the strong customer relationships Flushing has developed over the years.” Mr. Maher added, “The execution of the loan sale reduced the Company’s exposure to rent-regulated properties in New York City. These actions reflect our commitment to maintain a strong balance sheet and an enhanced liquidity profile, positioning the combined organization for sustainable, long-term growth.” The Company’s Board of Directors declared its 118th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on August 21, 2026, to common stockholders and NVCE stockholders of record on August 10, 2026. 1 The number of shares outstanding and all common share-related calculations, including earnings per share, book value per share, and tangible book value per share, are calculated using both common stock and non-voting common equivalent (“NVCE”) stock, which are participating securities. All NVCE shares presented in this document are reported on an as-converted common stock equivalent basis. 2 Core earnings and core earnings before income taxes and provision for credit losses (“PTPP” or “Pre-Tax-Pre-Provision”), and ratios derived therefrom, are non-GAAP financial measures that exclude certain non-core items. Refer to “Explanation of Non-GAAP Financial Measures” and “Other Items - Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures. 3 Reflects the bank-level regulatory CRE concentration ratio, calculated as regulatory commercial real estate divided by Tier 1 capital plus the ACL. 4 On-hand liquidity equals cash, unpledged securities and funding capacity at the Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Discount Window. Results of OperationsOn June 1, 2026, the Company completed its acquisition of Flushing and its results of operations from June 1, 2026 through June 30, 2026 are included in the consolidated results for the three and six months ended June 30, 2026, but are not included in the results of operations for the corresponding prior year periods. Further, the current quarter included $42.8 million of non-recurring merger-related expenses for the Flushing acquisition, representing $33.6 million net of tax, or $0.48 per share. Net Interest Income and MarginThree months ended June 30, 2026 vs. June 30, 2025Net interest income increased to $120.7 million, from $87.6 million, reflecting the net impact of the interest rate environment and the acquisition of Flushing, which added $19.1 million of net interest income. Net interest margin increased to 3.05%, from 2.91%, which included the impact of purchase accounting accretion and prepayment fees of 0.05% and 0.04%, respectively, and the impact of purchase accounting on average-interest earning assets. Average interest-earning assets increased by $3.81 billion, which was impacted by $2.50 billion of average interest-earning assets acquired from Flushing and increases in commercial loans and securities. The average yield for interest-earning assets increased to 5.29%, from 5.14%, primarily due to the repricing of assets and new originations, and the addition of loans acquired from Flushing at higher yields. The cost of average interest-bearing liabilities decreased to 2.74%, from 2.77%, primarily due to repricing of deposits and, to a lesser extent, Federal Home Loan Bank (“FHLB”) advances, partially offset by the addition of deposits acquired from Flushing at higher rates. The total cost of deposits remained stable at 2.06% for both periods. Average interest-bearing liabilities increased by $3.25 billion, driven by liabilities assumed from Flushing, and the remainder attributable to increases in deposits and FHLB advances. Six months ended June 30, 2026 vs. June 30, 2025Net interest income increased to $217.2 million, from $174.3 million, reflecting the net impact of the interest rate environment and the acquisition of Flushing. Net interest margin increased to 2.99%, from 2.91%, which included the impact of purchase accounting accretion and prepayment fees of 0.04% for both periods. Average interest-earning assets increased by $2.53 billion, driven by $1.26 billion acquired from Flushing and increases in commercial loans and securities. The average yield for interest-earning assets increased to 5.20%, from 5.14%, primarily due to the repricing of assets and new originations, and the addition of loans acquired from Flushing at higher yields. The cost of average interest-bearing liabilities decreased to 2.70%, from 2.77%, primarily due to repricing of deposits and FHLB advances, partially offset by the addition of deposits acquired from Flushing at higher rates. The total cost of deposits decreased four basis points to 2.02%, from 2.06%. Average interest-bearing liabilities increased by $2.23 billion, driven by the acquisition of Flushing, with the remaining increases related to deposits and FHLB advances. Three months ended June 30, 2026 vs. March 31, 2026Net interest income increased by $24.3 million, to $120.7 million from $96.4 million, and net interest margin increased to 3.05%, from 2.93%. Net interest margin included the impact of purchase accounting accretion and prepayment fees of 0.05% and 0.01%, respectively. Average interest-earning assets increased by $2.52 billion, and the yield on average interest-earning assets increased to 5.29%, from 5.10%. As noted above, the current quarter was impacted by interest-earning assets acquired from Flushing and repricing of assets and new originations. The cost of average interest-bearing liabilities increased to 2.74%, from 2.66%. The total cost of deposits increased to 2.06%, from 1.97%. Average interest-bearing liabilities increased by $2.03 billion, driven by Flushing as noted above, partly offset by government deposit outflows. Provision for Credit LossesProvision for credit losses for the three and six months ended June 30, 2026 was $4.0 million and $6.7 million, as compared to $3.0 million and $8.4 million for the corresponding prior year periods, and $2.7 million in the linked quarter. The current quarter provision was primarily driven by a reserve build of $2.5 million and replenishment of net charge-offs of $1.5 million. Net loan charge-offs were $1.5 million and $2.2 million for the three and six months ended June 30, 2026, as compared to $2.2 million and $2.9 million for the corresponding prior year periods and $701,000 for the linked quarter. Net loan charge-offs to average total loans were 0.05% and 0.04% for the three and six months ended June 30, 2026, as compared to 0.09% and 0.06% for the corresponding prior year periods and 0.03% for the linked quarter. Non-interest IncomeThree months ended June 30, 2026 vs. June 30, 2025        Other income decreased to $10.6 million, as compared to $11.7 million. Other income was adversely impacted by non-core operations of $347,000 related to net losses on equity investments in the current quarter. The prior period other income was favorably impacted by non-core operations of $488,000 related to net gains on equity investments. Excluding the impact of non-core operations, other income decreased by $300,000. The current year period includes $1.4 million of other income from the acquisition of Flushing which largely was offset by the reduction in fees and services charges from the discontinuation of our title business for the comparable prior year period. Excluding the impact of non-core operations and Flushing, the decrease in other income of $1.7 million was driven by a decrease in fees and service charges of $1.8 million and a decrease in net gain on sale of loans of $1.2 million due to the discontinuation of residential loan originations, including the disposition of the title business at the beginning of the fourth quarter last year. In addition, the prior period included non-recurring other income of $1.1 million. This was partly offset by increases in net gain on other real estate operations of $1.5 million and commercial loan swap income of $1.4 million. Six months ended June 30, 2026 vs. June 30, 2025Other income decreased to $17.3 million, as compared to $23.0 million. Other income was adversely impacted by non-core operations of $701,000 related to net losses on equity investments in the current period. The prior period other income was favorably impacted by non-core operations of $693,000 related to net gains on equity investments. Excluding the impact of non-core operations, other income decreased by $4.2 million. This was partly offset by the acquisition of Flushing, as noted above. The remaining decrease in other income by $5.6 million was driven by a decrease in fees and service charges of $3.6 million and a decrease in a net gain on sale of loans of $2.1 million due to the same drivers as noted above. In addition, the prior period included non-recurring other income of $1.9 million. This was partly offset by increases in net gain on other real estate operations of $1.3 million and commercial loan swap income of $1.1 million. Three months ended June 30, 2026 vs. March 31, 2026Other income in the linked quarter was $6.7 million and included non-core operations of $354,000 related to net losses on equity investments. Excluding non-core operations and Flushing’s other income stated above, other income increased by $2.5 million. The primary drivers were increases in net gain on other real estate operations of $1.4 million and commercial loan swap income of $1.2 million. Non-interest ExpenseThree months ended June 30, 2026 vs. June 30, 2025Operating expenses increased to $129.9 million, as compared to $71.5 million. Operating expenses in the current quarter were adversely impacted by non-core operations of $42.7 million, due to merger-related expenses. Excluding the impact of non-core operations, other expenses increased by $15.7 million, primarily due to $14.8 million of operating expenses recognized in June from the acquisition of Flushing. The remaining increase in operating expenses of $877,000 was driven by an increase in compensation and benefits of $2.5 million, mostly due to commercial banking hires adjusted for annual inflationary increases, partly offset by the impact of our residential outsourcing initiative. Additional drivers were decreases in professional fees of $1.3 million, mostly due to recruitment fees for the Company’s commercial banking hires in the prior year. Six months ended June 30, 2026 vs. June 30, 2025Operating expenses increased to $203.3 million, as compared to $135.8 million. Operating expenses in the current quarter were adversely impacted by non-core operations of $47.0 million, due to merger-related expenses and restructuring charges. Excluding the impact of non-core operations, other expenses increased by $20.5 million primarily due to the acquisition of Flushing, as noted above. The remaining increase in operating expenses of $5.7 million was driven by an increase in compensation and benefits of $5.3 million, mostly due to commercial banking hires adjusted for annual inflationary increases, partly offset by the impact of our residential outsourcing initiative. Three months ended June 30, 2026 vs. March 31, 2026Operating expenses in the linked quarter were $73.4 million and included non-core operations of $4.3 million related to merger-related expenses and restructuring charges. Excluding non-core operations and Flushing’s other expense stated above, operating expenses increased by $3.2 million. The primary drivers were increases in compensation and benefits of $3.3 million, partly due to new hires and an additional working day, and marketing expense of $646,000. These were partly offset by a decrease in data processing expense of $975,000. Income Tax ExpenseThe provision for income taxes was $496,000 and $7.0 million for the three and six months ended June 30, 2026, as compared to $5.8 million and $12.6 million for the same prior year periods and $6.5 million for the linked quarter. The effective tax rate was (19.6)% and 28.7% for the three and six months ended June 30, 2026, as compared to 23.2% and 23.7% for the same prior year period and 24.2% for the linked quarter. The effective tax rate for the three and six months ended June 30, 2026 was adversely impacted by non-deductible merger related expenses, which were offset by a one-time revaluation of deferred taxes as a result of the Flushing acquisition. Excluding the impact of these adjustments, the effective tax rate would have been 28.1% and increased as a result of the new tax profile due to the acquisition of Flushing. Financial Condition5June 30, 2026 vs. December 31, 2025Total assets increased by $8.71 billion to $23.27 billion, due to the acquisition of Flushing which added $8.69 billion to total assets. Total loans increased by $5.24 billion to $16.28 billion, from $11.03 billion, primarily due to Flushing totaling $6.19 billion partly offset by $1.31 billion of multifamily loans sold during the quarter for a price of $1.20 billion, net of costs to sell. Debt securities held-to-maturity and available-for-sale increased by $2.82 billion, primarily due to the acquisition of Flushing totaling $1.54 billion and the reinvestment of proceeds from the loan sales into securities. Bank owned life insurance increased by $233.6 million to $503.9 million, from $270.3 million driven by the acquisition of Flushing. As part of the acquisition of Flushing, the Company’s goodwill balance increased to $529.8 million, from $517.5 million and intangibles increased to $90.6 million, from $9.0 million. Other assets increased by $217.7 million to $367.0 million, from $149.3 million primarily due to revaluation of deferred tax assets as a result of the acquisition of Flushing and increase in market values of derivatives associated with customer interest rate swaps. Total liabilities increased by $7.96 billion to $20.86 billion, from $12.90 billion primarily due to the acquisition of Flushing, which added $8.16 billion. Deposits increased by $6.80 billion to $17.76 billion, from $10.96 billion, primarily due to acquired deposits from Flushing totaling $7.44 billion. Excluding Flushing, the decrease in deposits was primarily attributable to a decrease in government deposits due to seasonality. Time deposits increased by $1.74 billion to $4.21 billion, from $2.47 billion, representing 23.7% and 22.5% of total deposits, respectively. Time deposits included an increase in retail time deposits of $1.41 billion and brokered time deposits of $276.0 million. FHLB advances increased by $335.2 million to $1.73 billion, from $1.40 billion, partly due to Flushing and additional borrowing needs. Other borrowings increased by $238.0 million to $493.2 million, from $255.2 million driven by the addition of subordinated debt and trust preferred securities from the acquisition of Flushing. The loan-to-deposit ratio was 91.6%, as compared to 100.6%. Other liabilities increased by $489.8 million to $699.1 million, from $209.3 million, mostly related to $337.0 million of unsettled security purchases and increases in market values of derivatives associated with customer interest rate swaps. Capital levels remain strong and in excess of “well-capitalized” regulatory levels at June 30, 2026, including the Company’s estimated common equity tier one capital ratio of 10.7%. Total stockholders’ equity increased to $2.41 billion, as compared to $1.66 billion, primarily due to the acquisition of Flushing which added $535.6 million to stockholders’ equity. The current period also included a $225 million strategic investment from affiliates of funds managed by Warburg, in exchange for approximately 9.6 million shares of common stock, 1.8 million shares of NVCE stock, and warrants to purchase 11.4 million shares of NVCE stock. Additionally, accumulated other comprehensive loss increased by $1.2 million primarily due to decreases in the fair market value of available-for-sale debt securities and derivative hedges, net of tax. During the six months ended June 30, 2026, the Company repurchased 376,277 shares totaling $7.1 million representing a weighted average cost of $18.70, for repurchases of exercised options and vesting of awards from employees outside of the authorized share repurchase program. On June 1, 2026 the Company donated 273,973 shares totaling $5.0 million to the OceanFirst Foundation, which was funded through treasury stock. As of June 30, 2026, the Company had 3,226,284 shares available for repurchase under the authorized repurchase programs. The Company’s tangible common equity6 increased by $654.6 million to $1.79 billion. The Company’s stockholders’ equity to assets ratio was 10.36% at June 30, 2026, and tangible common equity to tangible assets ratio decreased by 18 basis points during the year to 7.91%, primarily due to the drivers described above. Book value per common share6 decreased to $24.50, as compared to $28.97. Tangible book value per common share decreased to $18.19, as compared to $19.79. 5 Flushing amounts refer to estimated fair values as of the June 1, 2026 acquisition date, unless otherwise noted.6 Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures and exclude the impact of intangible assets, goodwill, and preferred equity from both stockholders’ equity and total assets. Tangible book value per common share is based on common shares outstanding at period end Refer to “Explanation of Non-GAAP Financial Measures” and the “Other Items - Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures. Asset QualityJune 30, 2026 vs. December 31, 2025The Company’s allowance for loan credit losses was 1.29% of total loans, as compared to 0.76%. The increase in the allowance for credit losses was largely driven by incremental allowance for loan credit losses of $121 million added for the Flushing portfolio and the reserve build. Refer to “Provision for Credit Losses” section for further discussion. Non-performing loans increased to $108.2 million, from $27.8 million, primarily due to $53.8 million of non-performing loans acquired from Flushing and one commercial relationship of $20.6 million. Non-performing loans represented 0.67% and 0.25% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 193.75%, as compared to 301.27%. The level of 30 to 89 days delinquent loans decreased to $47.1 million, from $47.8 million, primarily due to the one commercial relationship noted above, which was partially offset by $18.2 million of 30 to 89 days delinquent loans acquired from Flushing. Criticized and classified loans and investment, and other real estate owned, increased to $541.5 million, from $122.1 million, primarily due to $293.2 million of loans and a $20.7 million investment acquired from Flushing, which were re-risked at the date of acquisition based on the Company’s credit standards. The remaining increase was driven by two commercial relationships totaling $56.1 million. The Company identified $750.4 million of purchased with credit deterioration (“PCD”) loans from the Flushing acquisition largely consisting of criticized and classified loans and loans with any rent-regulated exposure. Non-performing loans in the current period included $51.6 million of PCD loans acquired from Flushing, and 30 to 89 days delinquent loans in the current period included $8.6 million of PCD loans acquired from Flushing. The Company’s asset quality, excluding PCD loans, was as follows. Non-performing loans increased to $54.1 million, from $22.4 million. The allowance for loan credit losses as a percentage of total non-performing loans was 388.00%, as compared to 374.46%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, decreased to $36.9 million, from $44.7 million. Explanation of Non-GAAP Financial MeasuresReported amounts are presented in accordance with GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations and in some instances excluding income taxes and provision for credit losses, and reporting equity and asset amounts excluding intangible assets and goodwill, all of which can vary from period to period, provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items. Conference CallAs previously announced, the Company will host an earnings conference call on Friday, July 31, 2026 at 11:00 a.m. Eastern Time. The direct dial number for the call is (833) 461-5787, using the meeting ID 387420595. For those unable to participate in the conference call, a replay will be available which can be accessed through the following URL: https://events.q4inc.com/attendee/387420595. The conference call will also be available (listen-only) by internet webcast at https://ir.oceanfirst.com/. Web users should go to the site at least fifteen minutes prior to the call to register. OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $23.3 billion regional bank serving business and retail customers throughout New Jersey, New York, Long Island, and the major metropolitan areas from Massachusetts through Virginia. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com. Forward-Looking Statements In addition to historical information, this press release contains certain forward-looking statements within the meaning of the federal securities laws, which are based on certain assumptions and describe future plans, strategies and expectations of the Company. Forward-looking statements may be identified by the use of the words such as “ estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “could,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. These statements are based on various assumptions, whether or not identified in this document, and on the current expectations of the Company’s management and are not predictions of actual performance, and, as a result, are subject to risks and uncertainties. These forward-looking statements are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict, may differ from assumptions and many are beyond the control of the Company. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, inflation, general economic conditions, including potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the imposition of tariffs or other domestic or international governmental policies, trade restrictions and retaliatory measures impacting the Company's borrowers and the broader economy, the effects of a potential future federal government shutdown, debt ceiling impasses or fiscal uncertainty, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, our ability to enter into new markets and capitalize on growth opportunities, the adequacy of and changes in the economic assumptions and methodology for computing the allowance for credit losses, availability of capital, competition, our ability to maintain and increase market share and control expenses, changes in investor sentiment and consumer spending, borrowing and savings habits, changes in accounting principles, risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in the Company’s operational or security systems and infrastructure, including the risks arising from the Company’s dependence on third-party service providers and vendors, the failure to maintain current technologies and the operational risks associated with the adoption of artificial intelligence and other emerging technologies, failure to retain or attract employees, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of OceanFirst’s Annual Report on Form 10-K for the year ended December 31, 2025, and other documents filed by OceanFirst from time to time with the U.S. Securities and Exchange Commission (the “SEC”). The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. ACQUISITION DATE - FAIR VALUE BALANCE SHEET 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 the 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. Company Contact: Patrick S. BarrettChief Financial OfficerOceanFirst Financial Corp. Tel: (732) 240-4500, ext. 27507Email: [email protected]

Heritage Financial (HFWA) came out with quarterly earnings of $0.57 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.56%. A quarter ago, it was expected that this bank holding company would post earnings of $0.57 per share when it actually produced earnings of $0.59, delivering a surprise of +3.51%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Heritage Financial, which belongs to the Zacks Financial - Savings and Loan industry, posted revenues of $84.13 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.06%. This compares to year-ago revenues of $56.5 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Heritage Financial shares have added about 27.6% since the beginning of the year versus the S&P 500's gain of 9.6%. While Heritage Financial has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Heritage Financial was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.60 on $87.7 million in revenues for the coming quarter and $2.39 on $340.73 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Savings and Loan is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, OceanFirst Financial (OCFC), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This holding company for OceanFirst Bank is expected to post quarterly earnings of $0.42 per share in its upcoming report, which represents a year-over-year change of +35.5%. The consensus EPS estimate for the quarter has been revised 2.9% higher over the last 30 days to the current level. OceanFirst Financial's revenues are expected to be $130.37 million, up 31.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Heritage Financial Corporation (HFWA) : Free Stock Analysis Report OceanFirst Financial Corp. (OCFC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research