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]

Press Release Exhibit 99.1 Company Contact: Patrick S. Barrett Chief Financial Officer OceanFirst Financial Corp. Tel: (732) 240-4500, ext. 27507 Email: pbarrett@oceanfirst.com FOR IMMEDIATE RELEASE OCEANFIRST FINANCIAL CORP. ANNOUNCES SECOND QUARTER FINANCIAL RESULTS RED BANK, NEW JERSEY, July 24, 2025 - OceanFirst Financial Corp. (NASDAQ:OCFC) (the "Company"), the holding company for OceanFirst Bank N.A. (the "Bank"), announced net income available to common stockholders of $16.2 million, or $0.28 per dil ...

Wall Street expects a year-over-year decline in earnings on higher revenues when OceanFirst Financial (OCFC) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 24, might help the stock move higher if these key numbers are better than expec ...

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]