PART I. FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (unaudited)](index=20&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28unaudited%29) Presents unaudited consolidated financial statements for OceanFirst Financial Corp. as of June 30, 2025, detailing financial condition, income, and equity changes [Consolidated Statements of Financial Condition](index=20&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets decreased to $13.33 billion, loans increased, deposits grew, and stockholders' equity declined due to preferred stock redemption and share repurchases Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$13,327,847** | **$13,421,247** | | Loans receivable, net | $10,119,781 | $10,055,429 | | Debt securities (AFS & HTM) | $1,704,530 | $1,873,375 | | Goodwill | $523,308 | $523,308 | | **Total Liabilities** | **$11,684,167** | **$11,718,490** | | Deposits | $10,232,442 | $10,066,342 | | FHLB advances | $938,687 | $1,072,611 | | **Total Stockholders' Equity** | **$1,643,680** | **$1,702,757** | [Consolidated Statements of Income](index=21&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2025 net income available to common stockholders decreased to $16.2 million ($0.28 diluted EPS) due to higher expenses and preferred stock redemption loss Quarterly Income Statement Highlights (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $87,636 | $82,263 | | Provision for Credit Losses | $3,039 | $3,114 | | Total Other Income | $11,733 | $10,985 | | Total Operating Expenses | $71,474 | $58,620 | | Net Income | $19,085 | $24,432 | | Net Income Available to Common Stockholders | $16,200 | $23,369 | | Diluted Earnings Per Share | $0.28 | $0.40 | Six-Month Income Statement Highlights (in thousands, except EPS) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Interest Income | $174,288 | $168,487 | | Provision for Credit Losses | $8,379 | $3,705 | | Total Other Income | $22,986 | $23,271 | | Total Operating Expenses | $135,768 | $117,292 | | Net Income | $40,548 | $53,042 | | Net Income Available to Common Stockholders | $36,705 | $51,032 | | Diluted Earnings Per Share | $0.63 | $0.87 | [Notes to Unaudited Consolidated Financial Statements](index=27&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed disclosures cover basis of presentation, EPS, securities, loan portfolio, deposits, borrowings, fair value, derivatives, and leases, with the company operating as a single segment - The company operates as a **single operating and reportable segment**, providing regional community banking services[122](index=122&type=chunk)[123](index=123&type=chunk) - At June 30, 2025, total debt securities were **$1.63 billion** at fair value, with unrealized losses of **$90.7 million**, primarily attributed to changes in interest rates rather than credit quality[129](index=129&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, loans modified to borrowers experiencing financial difficulty totaled **$40.1 million**, up from **$30.9 million** at year-end 2024[153](index=153&type=chunk) - The company utilizes interest rate swaps and caps for both customer accommodation and to hedge its own interest rate risk, with a notional amount of total derivatives of **$1.55 billion** as of June 30, 2025[196](index=196&type=chunk)[197](index=197&type=chunk)[202](index=202&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=3&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 financial performance, noting decreased net income due to higher expenses, modest loan growth, expanded net interest margin, and stable asset quality Selected Financial Data (Q2 2025 vs. Q2 2024, dollars in thousands, except per share) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total assets | $13,327,847 | $13,321,755 | | Net interest income | $87,636 | $82,263 | | Net income | $19,085 | $24,432 | | Diluted earnings per share | $0.28 | $0.40 | | Net interest margin | 2.91% | 2.71% | | Non-performing assets as a percent of total assets | 0.31% | 0.25% | - Key Q2 2025 developments included the **$57.4 million** preferred stock redemption, resulting in a **$1.8 million** net loss, the launch of a Premier Banking initiative attracting **$115.0 million** in new deposits, and repurchases of over **1 million** shares[14](index=14&type=chunk)[17](index=17&type=chunk) [Comparison of Financial Condition](index=7&type=section&id=Comparison%20of%20Financial%20Condition) Total assets decreased to $13.33 billion, loans grew, deposits increased, and stockholders' equity declined due to preferred stock redemption and share repurchases - Total assets decreased by **$93.4 million**, primarily due to principal reductions, maturities, and calls of debt securities[24](index=24&type=chunk) - The company shifted its funding mix, increasing deposits by **$166.1 million** (driven by brokered CDs) while decreasing FHLB advances by **$133.9 million**[25](index=25&type=chunk) - Stockholders' equity decreased primarily due to the **$55.5 million** redemption of preferred stock and **$24.3 million** in share repurchases during the first six months of 2025[27](index=27&type=chunk)[28](index=28&type=chunk) [Comparison of Operating Results](index=7&type=section&id=Comparison%20of%20Operating%20Results) Net income decreased for Q2 and H1 2025, despite increased net interest income and expanded net interest margin, due to a significant rise in non-interest expenses - Net interest margin for Q2 2025 increased to **2.91%** from **2.71%** in Q2 2024, as the decrease in cost of funds outpaced the decrease in the yield on average interest-earning assets[35](index=35&type=chunk) - Q2 2025 provision for credit losses was **$3.0 million**, primarily driven by net loan charge-offs of **$2.2 million** and a reserve build due to a mix-shift into commercial and industrial loans[36](index=36&type=chunk) - Operating expenses for Q2 2025 increased by **$12.9 million** year-over-year to **$71.5 million**, mainly due to a **$7.1 million** increase in compensation and benefits and a **$2.2 million** increase in professional fees[40](index=40&type=chunk)[41](index=41&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with $3.5 billion in funding capacity and a CET1 ratio of 10.99%, exceeding 'well-capitalized' requirements - Total on-balance sheet liquidity and funding capacity was **$3.5 billion** at quarter-end[46](index=46&type=chunk) - Estimated adjusted uninsured deposits were **$1.73 billion**, or **16.7%** of total deposits[47](index=47&type=chunk) Regulatory Capital Ratios (Company) | Ratio | June 30, 2025 | Requirement for Capital Adequacy | | :--- | :--- | :--- | | Common equity Tier 1 | 10.99% | 7.00% | | Tier 1 capital | 11.74% | 8.50% | | Total capital | 13.56% | 10.50% | - In July 2025, the Board authorized a new stock repurchase program for up to an additional **3.0 million** shares[28](index=28&type=chunk)[54](index=54&type=chunk) [Lending Activities and Asset Quality](index=13&type=section&id=Lending%20Activities%20and%20Asset%20Quality) Total loans reached $10.19 billion, with investor-owned CRE at 49.8%; asset quality remained stable, non-performing loans at 0.33%, and allowance coverage at 236.54% - Investor-owned commercial real estate loans totaled **$5.07 billion**, or **49.8%** of total loans[63](index=63&type=chunk)[65](index=65&type=chunk) Asset Quality Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-performing loans as a % of total loans | 0.33% | 0.35% | | Non-performing assets as a % of total assets | 0.31% | 0.28% | | Allowance for loan credit losses as a % of total loans | 0.78% | 0.73% | | Allowance / Non-performing loans | 236.54% | 207.19% | - Special Mention and Substandard loans decreased by **$6.6 million** to **$153.3 million** from year-end 2024[74](index=74&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=18&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk (IRR) through ALCO, measuring EVE and NII sensitivity; it was modestly liability sensitive to rising rates as of June 30, 2025 Interest Rate Sensitivity Analysis (June 30, 2025) | Change in Interest Rates (bps) | Economic Value of Equity (% Change) | Net Interest Income (% Change) | | :--- | :--- | :--- | | +300 | (3.7)% | (2.2)% | | +200 | (1.8)% | (0.9)% | | +100 | (0.6)% | (0.1)% | | (100) | (0.3)% | (0.2)% | | (200) | (2.5)% | (0.7)% | | (300) | (7.0)% | (1.4)% | - The change in interest rate sensitivity from year-end 2024 was influenced by an increase in fixed-rate loans, a decrease in floating-rate investments, and a deposit mix shift, partially offset by an increase in short-term borrowings[94](index=94&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[97](index=97&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[98](index=98&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material pending legal proceedings beyond routine ordinary course of business matters - The Company and the Bank are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which are deemed immaterial[215](index=215&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for December 31, 2024 - No material changes to the Company's risk factors have occurred since December 31, 2024[216](index=216&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased over 1 million shares in Q2 2025 and authorized a new program for an additional 3.0 million shares in July 2025 - On July 16, 2025, the Board authorized a new 2025 Stock Repurchase Program to repurchase up to an additional **3.0 million** shares[217](index=217&type=chunk) Share Repurchases in Q2 2025 | Period | Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 535,263 | $17.33 | | June 2025 | 467,316 | $16.96 | [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[221](index=221&type=chunk)

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Financial Data and Key Metrics Changes - The company reported earnings per share of $0.28 on a fully diluted GAAP basis and $0.31 on a core basis for Q2 2025 [5] - Net interest income grew by $1,000,000, marking a third consecutive quarter of growth, while the net interest margin expanded by one basis point [6] - Total loans increased by $60,000,000, representing a 2% annualized growth rate, driven by strong originations of $716,000,000 [7] Business Line Data and Key Metrics Changes - Commercial and industrial loans increased by 8% for the quarter, reflecting the company's focus on this segment [7] - Non-interest income increased by 5% to $11,800,000 during the quarter, although it was down 1% compared to the prior quarter when excluding non-core items [15] - Operating expenses for the quarter were $71,000,000, in line with expectations, and included costs from recent commercial banking hires [7][18] Market Data and Key Metrics Changes - Deposit balances, excluding brokered CDs, decreased approximately 1% compared to the linked quarter but increased by $117,000,000 compared to the same period in 2024 [13] - The commercial pipeline reached a record high of $791,000,000, indicating strong lending opportunities [10] Company Strategy and Development Direction - The company is focused on organic growth and has made significant investments in hiring commercial bankers and launching the Premier Bank [6][12] - The company expects to see an increase in net interest income in the third quarter and continued improvement in margins in the second half of the year [10][16] - The company plans to maintain a stable operating expense run rate while exploring opportunities for additional expense efficiencies [18][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit quality, noting that total loans classified as special mention and substandard decreased by 3% [8] - The company anticipates that the current quarter represents a trough in EPS, with expectations for growth moving forward as organic growth momentum continues [6] - Management highlighted that clients are reporting good business conditions and building backlogs, which supports the outlook for loan growth [60][62] Other Important Information - The company authorized an additional 3,000,000 shares for repurchase, allowing flexibility in capital deployment [9] - The effective tax rate is expected to remain in the range of 23% to 25% [19] Q&A Session Summary Question: On the deposit side, can funding costs be reduced going forward? - Management indicated that while there is some opportunity to reduce funding costs, significant changes are not expected in the near term due to the current rates on CDs [22] Question: What is the outlook for stable non-interest income? - Management clarified that GAAP is the best base to use for guidance on stable non-interest income [32] Question: How much did new hires impact earnings this quarter? - The additional expenses from new hires impacted EPS by about $0.06, but this is expected to reverse moving forward [38] Question: What is the company's approach to M&A? - The primary focus remains on organic growth, with M&A being a lower priority given current share valuations [41] Question: How sustainable is the loan growth guidance? - Management expressed confidence in the sustainability of loan growth based on the current pipeline and client feedback [58] Question: What is the impact of rate cuts on NIM? - Management indicated that a 25 basis point cut would have a minimal impact, rounding to less than a penny per share on an annualized basis [91] Question: What is the outlook for commercial real estate? - Management expects to maintain steady CRE balances, with potential for slight growth depending on opportunities [110]

Financial Performance - Core diluted EPS was $0.46[6] - Net interest income reached $88 million[6] - Core ROAA was 0.53%[6] - Core ROTCE was 6.17%[6] Loan Portfolio - Total loans increased at an annualized rate of 2%[7] - Commercial and industrial loans grew by $132 million[7] - The commercial loan pipeline reached a record high of $791 million, a 111% increase from the previous quarter's $376 million[7] - Total loan pipeline at Q2-25 is $955 million[13] Deposit Trends - Premier Banking teams added $115 million in deposits at a weighted average cost of 2.71%[7, 10] - Total deposits increased by $55 million from the prior quarter[33] - Time deposits increased by $180 million to $2.3 billion[37] Asset Quality - Criticized loans as a % of total loans remain low at 1.43% as of Q2-25[19] - The allowance for credit losses plus unamortized credit and PCD marks amounted to $84.2 million, or 0.83% of total loans[23] Capital Management - The company repurchased 1,003,550 shares during the quarter[7] - The company redeemed all preferred stock for $57 million[7, 59]

Core Viewpoint - OceanFirst Financial reported quarterly earnings of $0.31 per share, missing the Zacks Consensus Estimate of $0.33 per share, and down from $0.39 per share a year ago, indicating a -6.06% earnings surprise [1][2] Financial Performance - The company posted revenues of $99.37 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.52%, compared to $93.25 million in the same quarter last year [2] - Over the last four quarters, OceanFirst has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - OceanFirst shares have increased by about 0.8% since the beginning of the year, underperforming the S&P 500's gain of 8.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Estimate Revisions and Rankings - Prior to the earnings release, the estimate revisions trend for OceanFirst was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $104.05 million, and for the current fiscal year, it is $1.46 on revenues of $409.15 million [7] Industry Context - The Financial - Savings and Loan industry, to which OceanFirst belongs, is currently in the bottom 26% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

[Executive Summary / Financial Highlights](index=1&type=section&id=Executive%20Summary%20%2F%20Financial%20Highlights) This section provides an overview of OceanFirst Financial Corp.'s financial performance and key developments for Q2 and H1 2025, including GAAP and non-GAAP metrics [Overall Performance](index=1&type=section&id=Overall%20Performance) OceanFirst Financial Corp. reported a year-over-year decrease in net income and diluted EPS for Q2 and H1 2025, while net interest income and net interest margin increased, and declared its 114th consecutive quarterly cash dividend Net Income and Diluted EPS (GAAP) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Net Income | $16.2 | $23.4 | -30.77 | | Diluted EPS | $0.28 | $0.40 | -30.00 | Net Income and Diluted EPS (GAAP) | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Net Income | $36.7 | $51.0 | -28.04 | | Diluted EPS | $0.63 | $0.87 | -27.59 | - The Board of Directors declared a quarterly cash dividend of **$0.20 per share**, marking the **114th consecutive dividend**[6](index=6&type=chunk) [Key Performance Ratios](index=1&type=section&id=Key%20Performance%20Ratios) In Q2 2025, the company experienced a year-over-year decline in several key performance ratios, including return on average assets and equity, with an increase in efficiency ratio, but an improvement in net interest margin Key Performance Ratios (Annualized) | Metric | Q2 2025 (%) | Q1 2025 (%) | Q2 2024 (%) | | :--- | :--- | :--- | :--- | | Return on Average Assets | 0.49 | 0.62 | 0.70 | | Return on Average Shareholders' Equity | 3.86 | 4.85 | 5.61 | | Return on Average Tangible Shareholders' Equity (a) | 5.66 | 7.05 | 8.10 | | Efficiency Ratio | 71.93 | 65.67 | 62.86 | | Net Interest Margin | 2.91 | 2.90 | 2.71 | Key Performance Ratios (Annualized) | Metric | H1 2025 (%) | H1 2024 (%) | | :--- | :--- | :--- | | Return on Average Assets | 0.56 | 0.76 | | Return on Average Shareholders' Equity | 4.36 | 6.13 | | Return on Average Tangible Shareholders' Equity (a) | 6.36 | 8.86 | | Efficiency Ratio | 68.82 | 61.17 | | Net Interest Margin | 2.91 | 2.76 | [Core Earnings Performance](index=2&type=section&id=Core%20Earnings%20Performance) Core earnings and pre-tax pre-provision (PTPP) core earnings both decreased year-over-year in Q2 and H1 2025, with core ratios showing similar trends to GAAP ratios Core Earnings (Non-GAAP) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Core Earnings | $17.7 | $22.7 | -22.03 | | Diluted Core EPS | $0.31 | $0.39 | -20.51 | Core Earnings (Non-GAAP) | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Core Earnings | $38.0 | $48.3 | -21.32 | | Diluted Core EPS | $0.66 | $0.83 | -20.48 | Core PTPP Earnings (Non-GAAP) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Core PTPP Earnings | $26.4 | $32.7 | -19.27 | | Diluted Core PTPP EPS | $0.46 | $0.56 | -17.86 | Core PTPP Earnings (Non-GAAP) | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Core PTPP Earnings | $58.8 | $68.9 | -14.66 | | Diluted Core PTPP EPS | $1.02 | $1.18 | -13.56 | - Core earnings and PTPP (pre-tax pre-provision) are non-GAAP financial measures that exclude non-core items related to acquisitions, equity investments, trust business sale, FDIC special assessment, and preferred stock redemption, used to assess operating performance[4](index=4&type=chunk) [Recent Quarter Key Developments](index=2&type=section&id=Recent%20Quarter%20Key%20Developments) This quarter saw progress in loan growth, new business expansion, and capital management, with strong commercial loan performance, preferred stock redemption, and share repurchases completed - Total loans increased by **$59.8 million**, an annualized growth rate of **2%**, with commercial and industrial loans growing by **$131.7 million**; commercial loan pipeline reached a record **$790.8 million**, up **111%** from the prior quarter[5](index=5&type=chunk) - Premier Banking launched in mid-April, establishing approximately **200 new client relationships** and generating **$115 million in new deposits** in its initial operational period[5](index=5&type=chunk) - Repurchased **1,003,550 shares** during the quarter and redeemed all preferred stock; book value per share decreased by **$0.63 to $28.64**, while tangible book value per share increased by **$0.18 to $19.34**[6](index=6&type=chunk) [Results of Operations](index=3&type=section&id=Results%20of%20Operations) This section details the company's financial performance, including net interest income, credit loss provisions, non-interest income, non-interest expenses, and income tax for the reported periods [Net Interest Income and Net Interest Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) The company achieved year-over-year growth in net interest income and net interest margin in Q2 and H1 2025, primarily due to a greater decline in funding costs than in earning asset yields, also showing slight sequential growth [Three months ended June 30, 2025 vs. June 30, 2024](index=3&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares the company's net interest income and margin performance for the second quarter of 2025 against the same period in 2024, highlighting key drivers - Net interest income increased to **$87.6 million** from **$82.3 million** in the prior year quarter, primarily reflecting the net impact of a declining interest rate environment[8](index=8&type=chunk) - Net interest margin increased from **2.71% to 2.91%**, mainly due to a greater decline in funding costs than in the average earning asset yield[8](index=8&type=chunk) - Average earning assets decreased by **$138.2 million**, primarily due to a reduction in securities, partially offset by an increase in residential loans; average earning asset yield decreased from **5.25% to 5.14%**[9](index=9&type=chunk) - Average cost of interest-bearing liabilities decreased from **3.14% to 2.77%**, driven by lower deposit costs; total cost of deposits decreased by **31 basis points to 2.06%**[10](index=10&type=chunk) [Six months ended June 30, 2025 vs. June 30, 2024](index=4&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares the company's net interest income and margin performance for the first half of 2025 against the same period in 2024, focusing on year-to-date trends - Net interest income increased to **$174.3 million** from **$168.5 million** in the prior year period, with net interest margin increasing from **2.76% to 2.91%**[11](index=11&type=chunk) - Average earning assets decreased by **$185.8 million**, driven by a reduction in securities; average yield decreased from **5.25% to 5.14%**[12](index=12&type=chunk) - Average cost of interest-bearing liabilities decreased from **3.09% to 2.77%**; total cost of deposits decreased from **2.34% to 2.06%**[12](index=12&type=chunk) [Three months ended June 30, 2025 vs. March 31, 2025](index=4&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20March%2031%2C%202025) This subsection analyzes the sequential changes in net interest income and margin between the second and first quarters of 2025, identifying quarterly shifts - Net interest income increased by **$1.0 million to $87.6 million**, and net interest margin increased from **2.90% to 2.91%**[13](index=13&type=chunk) - Average earning assets decreased by **$46.5 million**, primarily due to a reduction in securities; average earning asset yield increased from **5.13% to 5.14%**[13](index=13&type=chunk) - Average interest-bearing liabilities decreased by **$36.1 million**, mainly due to reductions in interest-bearing checking deposits and FHLB advances; total average cost of interest-bearing liabilities decreased from **2.78% to 2.77%**; total cost of deposits remained stable at **2.06%**[14](index=14&type=chunk) [Provision for Credit Losses](index=5&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased year-over-year in Q2 and H1 2025, driven by net loan charge-offs, changes in the commercial and industrial loan portfolio, and increased unfunded credit commitments Provision for Credit Losses | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $3.0 | $3.1 | -3.23 | Provision for Credit Losses | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $8.4 | $3.7 | +127.03 | - The provision for the quarter was primarily driven by **$2.2 million in net loan charge-offs**, a net reserve increase due to changes in the commercial and industrial loan portfolio mix, and an increase in unfunded credit commitments[15](index=15&type=chunk) Net Loan Charge-offs | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Net Loan Charge-offs | $2.2 | $1.5 | +46.67 | Net Loan Charge-offs | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Net Loan Charge-offs | $2.9 | $1.8 | +61.11 | - The quarter included **$1.6 million in charge-offs** related to two commercial relationships from a recent acquisition[16](index=16&type=chunk) [Non-interest Income](index=6&type=section&id=Non-interest%20Income) Non-interest income increased year-over-year in Q2 2025, primarily due to higher net gains on loan sales and non-recurring other income, but slightly decreased for H1 due to significant non-core impacts in the prior year [Three months ended June 30, 2025 vs. June 30, 2024](index=6&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares non-interest income for Q2 2025 against Q2 2024, detailing changes in revenue streams - Other income increased to **$11.7 million** from **$11.0 million** in the prior year quarter; excluding non-core items, other income increased by **$1.1 million**, driven by a **$0.757 million increase in net gains on loan sales** and a **$1.1 million increase in non-recurring other income**[18](index=18&type=chunk)[19](index=19&type=chunk) [Six months ended June 30, 2025 vs. June 30, 2024](index=6&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares non-interest income for H1 2025 against H1 2024, highlighting year-to-date trends - Other income decreased to **$23.0 million** from **$23.3 million** in the prior year period, which was favorably impacted by **$4.0 million in net gains on equity investments** and the non-core sale of the trust business[20](index=20&type=chunk) - Excluding non-core items, other income increased by **$3.0 million**, driven by a **$1.3 million increase in net gains on loan sales**, a **$0.448 million increase in commercial loan swap income**, and a **$1.9 million increase in non-recurring other income**[21](index=21&type=chunk) [Three months ended June 30, 2025 vs. March 31, 2025](index=6&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20March%2031%2C%202025) This subsection analyzes sequential changes in non-interest income between Q2 and Q1 2025 - Other income increased by **$0.197 million**, primarily driven by a **$1.1 million increase in non-recurring other income** this quarter, partially offset by **$0.842 million in non-recurring other income** in the prior quarter and a **$0.413 million decrease in commercial loan swap income**[22](index=22&type=chunk) [Non-interest Expense](index=7&type=section&id=Non-interest%20Expense) Non-interest expense significantly increased year-over-year in Q2 and H1 2025, primarily due to higher compensation and benefits, professional fees, other operating expenses, and data processing costs, partly driven by acquisitions and new commercial banking team hires [Three months ended June 30, 2025 vs. June 30, 2024](index=7&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares non-interest expenses for Q2 2025 against Q2 2024, detailing key cost drivers - Operating expenses increased by **$12.9 million to $71.5 million**, primarily driven by a **$7.1 million increase in compensation and benefits**, partly due to an acquisition late last year, annual merit increases, and new commercial banking team hires this quarter[23](index=23&type=chunk) - Other drivers included a **$2.2 million increase in professional fees** (primarily recruiting fees), a **$1.9 million increase in other operating expenses** (primarily additional loan servicing fees), a **$0.79 million increase in data processing expenses**, and a **$0.366 million increase in marketing expenses**[23](index=23&type=chunk) [Six months ended June 30, 2025 vs. June 30, 2024](index=7&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20vs.%20June%2030%2C%202024) This subsection compares non-interest expenses for H1 2025 against H1 2024, highlighting year-to-date cost trends - Operating expenses increased by **$18.9 million** (excluding non-core items), primarily driven by an **$11.1 million increase in compensation and benefits**, partly due to an acquisition late last year, annual merit increases, and new commercial banking team hires[25](index=25&type=chunk) - Other drivers included a **$2.9 million increase in other operating expenses**, a **$1.9 million increase in professional fees**, a **$1.5 million increase in data processing expenses**, a **$0.577 million increase in occupancy expenses**, and a **$0.484 million increase in marketing expenses**[25](index=25&type=chunk) [Three months ended June 30, 2025 vs. March 31, 2025](index=7&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20vs.%20March%2031%2C%202025) This subsection analyzes sequential changes in non-interest expenses between Q2 and Q1 2025 - Operating expenses increased by **$7.2 million to $71.5 million**, primarily driven by a **$3.5 million increase in compensation and benefits** (due to new banking team hires) and a **$1.9 million increase in professional fees** (primarily commercial banker recruiting)[26](index=26&type=chunk) - Additionally, other operating expenses increased by **$1.4 million**, partly related to higher title costs[27](index=27&type=chunk) [Income Tax Expense](index=8&type=section&id=Income%20Tax%20Expense) Income tax expense decreased year-over-year in both Q2 and H1 2025, with effective tax rates fluctuating across periods Income Tax Expense | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | $5.8 | $7.1 | -18.31 | | Effective Tax Rate | 23.2 % | 22.5 % | +0.7 pp | Income Tax Expense | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change (YoY) (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | $12.6 | $17.7 | -28.70 | | Effective Tax Rate | 23.7 % | 25.0 % | -1.3 pp | - The effective tax rate for H1 2024 was negatively impacted by **1.6%** due to a **$1.2 million non-recurring write-off of deferred tax assets**[28](index=28&type=chunk) [Financial Condition](index=8&type=section&id=Financial%20Condition) This section provides an overview of the company's balance sheet, capital management, and asset quality as of June 30, 2025 [Balance Sheet Overview](index=8&type=section&id=Balance%20Sheet%20Overview) As of June 30, 2025, total assets decreased from year-end 2024, mainly due to reduced debt securities, while total loans and loan reserves increased; total liabilities decreased, with higher deposits but lower FHLB advances and other liabilities - Total assets decreased by **$93.4 million to $13.33 billion**, primarily due to a reduction in debt securities[29](index=29&type=chunk) - Total loans increased by **$67.0 million to $10.19 billion**, and loan reserves increased by **$648.1 million to $954.8 million**, primarily driven by a **$593.3 million increase in commercial loans**[29](index=29&type=chunk) - Total liabilities decreased by **$34.3 million to $11.68 billion**, mainly related to a funding portfolio shift; deposits increased by **$166.1 million to $10.23 billion**, primarily due to an increase in time deposits[30](index=30&type=chunk) - FHLB advances decreased by **$133.9 million to $938.7 million**; the loan-to-deposit ratio was **99.5%**, compared to **100.5%** at year-end 2024[31](index=31&type=chunk) [Capital Management](index=9&type=section&id=Capital%20Management) The company maintained strong capital levels exceeding "well-capitalized" regulatory thresholds, completing preferred stock redemption and share repurchases this quarter, leading to slight decreases in total equity and tangible common equity, but an increase in tangible common equity to tangible assets ratio - Capital levels remained strong as of June 30, 2025, exceeding "well-capitalized" regulatory thresholds, with the common equity tier 1 ratio decreasing to **11.0%**, impacted by share repurchases and increased loan commitments[32](index=32&type=chunk) - Total shareholders' equity decreased to **$1.64 billion**, primarily due to the redemption of **$55.5 million in preferred stock** and capital returns such as dividends and share repurchases, partially offset by net income[33](index=33&type=chunk) - The company repurchased **1,401,945 shares** totaling **$24.3 million** during H1 2025; as of June 30, **226,284 shares** were available for repurchase; on July 16, the Board authorized an additional **3.0 million shares** for repurchase[34](index=34&type=chunk) - Tangible common equity decreased by **$1.7 million to $1.11 billion**; the tangible common equity to tangible assets ratio increased by **5 basis points to 8.67%** during the year[35](index=35&type=chunk) [Asset Quality](index=10&type=section&id=Asset%20Quality) As of June 30, 2025, the company's asset quality remained stable, with decreases in non-performing loans and 30-89 day delinquent loans, and a significant improvement in the allowance for credit losses coverage ratio - Non-performing loans decreased to **$33.5 million**, representing **0.33% of total loans**; the allowance for credit losses to total non-performing loans ratio improved to **236.54%** from **207.19%** at year-end 2024[36](index=36&type=chunk) - Loans 30-89 days delinquent decreased to **$14.7 million**, primarily related to residential loans; non-performing and classified loans and other real estate owned decreased to **$153.3 million**[36](index=36&type=chunk) - Excluding PCD (purchased credit-impaired) loans, non-performing loans decreased to **$26.7 million**; the allowance for credit losses to total non-performing loans ratio improved to **296.75%** from **266.73%** at year-end 2024[37](index=37&type=chunk) [Supplemental Financial Data](index=13&type=section&id=Supplemental%20Financial%20Data) This section provides detailed financial statements, loan and deposit data, asset quality metrics, and net interest income analysis for various periods [Consolidated Statements of Financial Condition](index=13&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This section provides consolidated balance sheets as of June 30, 2025, March 31, 2025, December 31, 2024, and June 30, 2024, detailing the composition of assets, liabilities, and shareholders' equity Consolidated Statements of Financial Condition (Selected, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Assets:** | | | | | Cash and Due from Banks | $170,599 | $123,615 | $181,198 | | Debt Securities Available for Sale | $735,561 | $827,500 | $721,484 | | Debt Securities Held to Maturity | $968,969 | $1,045,875 | $1,105,843 | | Loans, Net | $10,119,781 | $10,055,429 | $9,961,117 | | Goodwill | $523,308 | $523,308 | $506,146 | | Total Assets | $13,327,847 | $13,421,247 | $13,321,755 | | **Liabilities:** | | | | | Deposits | $10,232,442 | $10,066,342 | $9,994,017 | | Federal Home Loan Bank Advances | $938,687 | $1,072,611 | $789,337 | | Total Liabilities | $11,684,167 | $11,718,490 | $11,645,086 | | **Shareholders' Equity:** | | | | | Total Shareholders' Equity | $1,643,680 | $1,702,757 | $1,676,669 | [Consolidated Statements of Income](index=14&type=section&id=Consolidated%20Statements%20of%20Income) This section presents consolidated statements of income for the three and six months ended June 30, 2025, March 31, 2025, and June 30, 2024, detailing interest income, interest expense, net interest income, provision for credit losses, non-interest income, operating expenses, and net income Consolidated Statements of Income (Selected, in thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $154,825 | $159,426 | $308,528 | $321,028 | | Total Interest Expense | $67,189 | $77,163 | $134,240 | $152,541 | | Net Interest Income | $87,636 | $82,263 | $174,288 | $168,487 | | Provision for Credit Losses | $3,039 | $3,114 | $8,379 | $3,705 | | Total Other Income | $11,733 | $10,985 | $22,986 | $23,271 | | Total Operating Expenses | $71,474 | $58,620 | $135,768 | $117,292 | | Income Tax Expense | $5,771 | $7,082 | $12,579 | $17,719 | | Net Income | $19,085 | $24,432 | $40,548 | $53,042 | | Net Income Attributable to Common Shareholders | $16,200 | $23,369 | $36,705 | $51,032 | | Diluted EPS | $0.28 | $0.40 | $0.63 | $0.87 | [Selected Loan and Deposit Data](index=15&type=section&id=Selected%20Loan%20and%20Deposit%20Data) This section provides detailed loan and deposit data as of June 30, 2025, and prior quarters, including loan types, loan reserves, loan originations and sales, and deposit types and composition Loan Portfolio (in thousands of USD) | Loan Type | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Commercial Real Estate - Investor | $5,068,125 | $5,287,683 | $5,324,994 | | Commercial and Industrial | $1,776,910 | $1,550,164 | $1,474,110 | | Residential Real Estate | $3,119,232 | $3,049,763 | $2,977,698 | | Other Consumer | $220,820 | $230,462 | $242,526 | | Total Loans | $10,185,087 | $10,118,072 | $10,019,328 | Deposit Portfolio (in thousands of USD) | Deposit Type | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Non-interest Bearing Deposits | $1,686,627 | $1,617,182 | $1,632,521 | | Interest-Bearing Checking | $3,845,602 | $4,000,553 | $3,667,837 | | Money Market | $1,377,999 | $1,301,197 | $1,210,312 | | Savings | $1,022,918 | $1,066,438 | $1,115,688 | | Time Deposits | $2,299,296 | $2,080,972 | $2,367,659 | | Total Deposits | $10,232,442 | $10,066,342 | $9,994,017 | - As of June 30, 2025, loan reserves reached **$954.8 million**, with commercial loan reserves at **$790.8 million**, a significant increase from the prior quarter[49](index=49&type=chunk) - Total loan originations for Q2 2025 were **$716.0 million**, including **$425.9 million in commercial loans** and **$274.3 million in residential real estate loans**[49](index=49&type=chunk) [Asset Quality Data](index=16&type=section&id=Asset%20Quality%20Data) This section presents asset quality metrics as of June 30, 2025, and prior quarters, including non-performing loans, other real estate owned, delinquent loans, and allowance for credit losses ratios Asset Quality Metrics (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Non-performing Loans | $33,511 | $35,527 | $33,422 | | Other Real Estate Owned | $7,680 | $1,811 | $0 | | Total Non-performing Assets | $41,191 | $37,338 | $33,422 | | Loans 30-89 Days Delinquent | $14,740 | $36,550 | $9,655 | | Allowance for Credit Losses | $79,266 | $73,607 | $68,839 | | Allowance for Credit Losses as a % of Total Loans | 0.78 % | 0.73 % | 0.69 % | | Allowance for Credit Losses as a % of Total Non-performing Loans | 236.54 % | 207.19 % | 205.97 % | - As of June 30, 2025, non-performing loans represented **0.33% of total loans**, and non-performing assets represented **0.31% of total assets**[52](index=52&type=chunk) [Net Loan (Charge-offs) Recoveries](index=17&type=section&id=Net%20Loan%20%28Charge-offs%29%20Recoveries) This section provides net loan charge-off and recovery data as of June 30, 2025, and prior quarters, illustrating charge-off trends for commercial and residential/consumer loans Net Loan (Charge-offs) Recoveries (in thousands of USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Loan Charge-offs | $(2,415) | $(798) | $(1,600) | | Loan Recoveries | $197 | $162 | $148 | | Net Loan (Charge-offs) Recoveries | $(2,218) | $(636) | $(1,452) | | Net Loan (Charge-offs) Recoveries as a % of Average Total Loans (Annualized) | 0.09 % | 0.03 % | 0.06 % | - Q2 2025 included **$1.6 million in charge-offs** related to two commercial relationships and **$0.445 million in charge-offs** related to the sale of non-performing residential and consumer loans[54](index=54&type=chunk)[55](index=55&type=chunk) [Analysis of Net Interest Income](index=18&type=section&id=Analysis%20of%20Net%20Interest%20Income) This section provides a detailed analysis of net interest income composition for the periods ended June 30, 2025, and prior quarters, including average balances, interest income/expense, and average yields/costs for earning assets and interest-bearing liabilities Analysis of Net Interest Income (Selected, in thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Earning Assets:** | | | | | | Average Balance | $12,065,530 | $12,203,776 | $12,091,301 | $12,277,080 | | Average Yield | 5.14 % | 5.25 % | 5.14 % | 5.25 % | | **Interest-Bearing Liabilities:** | | | | | | Average Balance | $9,739,728 | $9,872,522 | $9,757,682 | $9,937,245 | | Average Cost | 2.77 % | 3.14 % | 2.77 % | 3.09 % | | Net Interest Spread | 2.37 % | 2.11 % | 2.37 % | 2.16 % | | Net Interest Margin | 2.91 % | 2.71 % | 2.91 % | 2.76 % | | Total Cost of Deposits | 2.06 % | 2.37 % | 2.06 % | 2.34 % | [Selected Quarterly Financial Data](index=20&type=section&id=Selected%20Quarterly%20Financial%20Data) This section presents selected financial condition data, operating data, and financial ratios for the quarters ended June 30, 2025, and prior, including assets, liabilities, equity, income, expenses, per-share data, and key ratios Selected Financial Condition Data (Selected, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $13,327,847 | $13,421,247 | $13,321,755 | | Deposits | $10,232,442 | $10,066,342 | $9,994,017 | | Total Shareholders' Equity | $1,643,680 | $1,702,757 | $1,676,669 | Selected Operating Data (Selected, in thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $87,636 | $82,263 | $174,288 | $168,487 | | Net Income Attributable to Common Shareholders | $16,200 | $23,369 | $36,705 | $51,032 | | Diluted EPS | $0.28 | $0.40 | $0.63 | $0.87 | Selected Financial Ratios (Annualized) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Return on Average Assets (%) | 0.49 | 0.70 | 0.56 | 0.76 | | Efficiency Ratio (%) | 71.93 | 62.86 | 68.82 | 61.17 | | Loan-to-Deposit Ratio (%) | 99.50 | 100.30 | - | - | | Book Value Per Share (USD) | $28.64 | $28.67 | - | - | | Tangible Book Value Per Share (USD) | $19.34 | $18.93 | - | - | [Non-GAAP Reconciliation](index=23&type=section&id=Non-GAAP%20Reconciliation) This section provides non-GAAP reconciliation tables for core earnings, pre-tax pre-provision (PTPP) core earnings, tangible equity, and tangible assets, to help investors better understand the company's underlying operating performance Core Earnings (Non-GAAP, in thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Common Shareholders (GAAP) | $16,200 | $23,369 | $36,705 | $51,032 | | Total Adjustments | $1,469 | $(699) | $1,313 | $(2,724) | | Core Earnings (Non-GAAP) | $17,669 | $22,670 | $38,018 | $48,308 | | Diluted Core EPS | $0.31 | $0.39 | $0.66 | $0.83 | Core PTPP Earnings (Non-GAAP, in thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Core PTPP Earnings (Non-GAAP) | $26,364 | $32,678 | $58,812 | $68,902 | | Diluted Core PTPP EPS | $0.46 | $0.56 | $1.02 | $1.18 | Tangible Equity and Tangible Assets (Non-GAAP, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $1,643,680 | $1,702,757 | $1,676,669 | | Less: Goodwill | $523,308 | $523,308 | $506,146 | | Less: Intangible Assets | $10,834 | $12,680 | $7,859 | | Tangible Shareholders' Equity | $1,109,538 | $1,166,769 | $1,162,664 | | Less: Preferred Stock | $0 | $55,527 | $55,527 | | Tangible Common Equity | $1,109,538 | $1,111,242 | $1,107,137 | | Total Assets | $13,327,847 | $13,421,247 | $13,321,755 | | Less: Goodwill | $523,308 | $523,308 | $506,146 | | Less: Intangible Assets | $10,834 | $12,680 | $7,859 | | Tangible Assets | $12,793,705 | $12,885,259 | $12,807,750 | | Tangible Shareholders' Equity to Tangible Assets Ratio (%) | 8.67 | 9.06 | 9.08 | | Tangible Common Equity to Tangible Assets Ratio (%) | 8.67 | 8.62 | 8.64 | [Other Information](index=11&type=section&id=Other%20Information) This section includes explanations of non-GAAP financial measures, conference call details, a company profile, and forward-looking statements [Explanation of Non-GAAP Financial Measures](index=11&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Management believes supplemental non-GAAP information, such as net income excluding non-core items and equity/assets excluding intangibles, provides better comparability of operating performance across periods and is used by regulators and analysts to assess financial condition - Non-GAAP information provides better period-over-period operating performance comparisons by excluding non-core items, income tax, and provision for credit losses, as well as equity and asset amounts excluding intangible assets, goodwill, or preferred stock[38](index=38&type=chunk) - These disclosures should not be considered a substitute for GAAP financial results and may not be comparable to non-GAAP performance measures provided by other companies[38](index=38&type=chunk) [Conference Call Details](index=11&type=section&id=Conference%20Call%20Details) The company will host an earnings conference call on July 25, 2025, at 11:00 AM ET, with replay and webcast options available - The company will host an earnings conference call on **July 25, 2025, at 11:00 AM ET**, dial-in number **(833) 470-1428**, access code **170810**[39](index=39&type=chunk) - A replay will be available from one hour after the call until **August 1, 2025**, by dialing **(866) 813-9403**; the call and replay are also webcast via the investor relations section of www.oceanfirst.com[39](index=39&type=chunk) [Company Profile](index=12&type=section&id=Company%20Profile) OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank N.A., founded in 1902, is a **$13.3 billion** regional bank offering financial services across New Jersey and major metropolitan areas from Massachusetts to Virginia - OceanFirst Bank N.A., founded in 1902, is a regional bank with **$13.3 billion in assets**, providing commercial and residential financing, treasury management, trust and asset management, and deposit services[41](index=41&type=chunk) - The bank is one of New Jersey's largest and oldest community-based financial institutions[41](index=41&type=chunk) [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements based on certain assumptions, describing future plans, strategies, and expectations, but their projected results or actual impact are inherently uncertain and subject to various risks and uncertainties - Forward-looking statements are based on certain assumptions, describing future plans, strategies, and expectations, but projected results or actual impact are inherently uncertain[42](index=42&type=chunk) - Factors that could materially adversely affect operations include, but are not limited to: changes in interest rates, inflation, macroeconomic conditions, real estate market values, regulatory changes, competition, and operational risks such as cyberattacks[42](index=42&type=chunk) - The company undertakes no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of the statements[42](index=42&type=chunk)

Core Viewpoint - OceanFirst Financial (OCFC) is expected to report a year-over-year decline in earnings despite higher revenues, with the actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - The upcoming earnings report is anticipated on July 24, with a consensus estimate of $0.33 per share, reflecting a -15.4% change year-over-year. Revenues are projected to be $100.9 million, an increase of 8.2% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 5.13% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +2.55% for OceanFirst, suggesting recent bullish sentiment among analysts. However, the stock holds a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, OceanFirst met the expected earnings of $0.35 per share, resulting in no surprise. Over the past four quarters, the company has beaten consensus EPS estimates twice [13][14]. Conclusion - While OceanFirst may not be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [15][17].

Core Viewpoint - OceanFirst Financial Corp. has authorized a 2025 Stock Repurchase Program to buy back up to 3 million shares, representing approximately 5% of its outstanding common stock, which is an addition to the existing 2021 program [1][2] Group 1: Stock Repurchase Program - The 2025 Stock Repurchase Program allows the company to enhance its capital deployment flexibility and respond to market conditions while still investing in organic growth and strategic initiatives [2] - The repurchase program reflects the company's belief that its shares are a compelling investment opportunity [2] Group 2: Company Leadership - Christopher D. Maher, Chairman and CEO, emphasized the importance of the repurchase program in providing the company with the ability to manage capital effectively [2]

Financial Performance - Net income available to common stockholders for Q1 2025 decreased to $20.5 million, or $0.35 per diluted share, compared to $27.7 million, or $0.47 per diluted share in Q1 2024[17] - Operating expenses for Q1 2025 were $64.294 million, slightly down from $64.849 million in the previous quarter[1] - The Company reported a net benefit of $842,000 in other income and $1.3 million in normal incentive-related adjustments during the current quarter[16] - Interest income decreased to $153.7 million from $161.6 million, with the yield on average interest-earning assets decreasing to 5.13% from 5.26%[30] - Net income available to common stockholders decreased to $20.5 million, or $0.35 per diluted share, compared to $27.7 million, or $0.47 per diluted share[29] Asset and Liability Management - Total assets decreased to $13.309 billion from $13.421 billion in the previous quarter[1] - Total liabilities decreased by $118.3 million to $11.60 billion, with deposits increasing by $110.7 million to $10.18 billion[26] - Total stockholders' equity increased to $1.709 billion from $1.703 billion in the previous quarter[1] - The Company’s stockholders' equity to total assets ratio was 12.84% as of March 31, 2025[55] - The loan-to-deposit ratio was 99.5%, down from 100.5%[26] Credit Quality - Provision for credit losses was $5.3 million, resulting in an allowance for loan credit losses of 0.78%, up from 0.73% in the previous quarter[19] - Non-performing loans increased to $36.970 million from $35.527 million in the previous quarter[1] - Non-performing assets increased to $38,887,000 as of March 31, 2025, compared to $37,338,000 at December 31, 2024[64] - Delinquent loans (30-89 days) rose to $46,246,000 from $36,550,000, primarily due to two commercial relationships classified as substandard[67] - The company's non-performing loans represented 0.37% of total loans as of March 31, 2025, compared to 0.35% at December 31, 2024[67] Loan and Deposit Activity - Commercial and industrial loans increased by $95.1 million, or 6.1%, compared to the linked quarter, with the total commercial loan pipeline increasing 90% to $375.6 million[19] - The Company had total loans outstanding of $10.13 billion, with 51.4% ($5.20 billion) in investor-owned commercial real estate loans[56] - Outstanding commitments to originate loans totaled $504.4 million, with undrawn lines of credit at $1.30 billion[45] - Cash dividends declared and paid during the three months ended March 31, 2025, totaled $11.7 million for common stock and $1.0 million for preferred stock[49] - The Company repurchased 398,395 shares of common stock for a total of $6.9 million during the quarter[47] Capital and Regulatory Compliance - As of March 31, 2025, the Company maintained a Tier 1 capital ratio of 9.73% and a total capital ratio of 14.64%, exceeding regulatory requirements[54] - The Company has detailed contingency capital plans and performs capital stress tests to ensure adequate capital under various scenarios[52] - The allowance for loan credit losses as a percentage of total loans was 0.78% as of March 31, 2025, up from 0.73% at December 31, 2024[64] Interest Rate Sensitivity - The Economic Value of Equity (EVE) sensitivity shows a decrease of 2.3% under a 300 basis points rate shock, compared to a decrease of 6.2% as of December 31, 2024[86] - The net interest income sensitivity indicates a modest asset sensitivity at March 31, 2025, with a 0.4% increase under a 100 basis points rate shock[86] - Under a 300 basis points rate shock, net interest income is projected to decrease by 3.5% as of March 31, 2025, compared to a decrease of 2.6% as of December 31, 2024[86] - The Company has observed a reduction in deposit costs, contributing to the changes in EVE sensitivity[87] - The model does not account for the Company's business or strategic plans in response to changes in interest rates[88]

Group 1 - OceanFirst Financial Corp. is a smaller regional bank based in New Jersey, highlighted for its 5% dividend yield, which is considered attractive [1] - There is caution regarding the bank's loan portfolio, indicating potential concerns about credit quality or risk exposure [1] Group 2 - The investment strategy mentioned emphasizes a blended approach of trading and income to enhance savings and retirement timelines [1] - The service offers a 20% discount for new members, suggesting a promotional effort to attract more clients during market corrections [1]