[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]

Exhibit 99.2 OceanFirst Financial Corp. 1Q 2025 Earnings Release Supplement(1) April 2025 (1) The 1Q 2025 Earnings Release Supplement should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on April 24, 2025. . . . Legal Disclaimer . . . FORWARD LOOKING STATEMENTS. In addition to historical information, this presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are ba ...

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.35 on a fully diluted GAAP and core basis, marking a second consecutive quarter of growth in both net and interest income, which increased by more than $3 million for the quarter [7][10] - Net interest margin expanded by 21 basis points, driven by deposit repricing efforts [7][18] - Operating expenses for the quarter were $64 million, modestly lower than the prior quarter [8][22] - Capital levels remain robust with an estimated common equity Tier one capital ratio of 11.2% and tangible book value per share of $19.16 [10][23] Business Line Data and Key Metrics Changes - Commercial and industrial loan growth was reported at 6%, or 24% annualized, with total commercial loan pipeline increasing to $376 million [7][12] - Noninterest income decreased by 8% to $11.3 million during the quarter, primarily driven by seasonally lower title fees and service charges [17] - The residential division faced uneven loan demand due to volatility in rates and limited inventory [13] Market Data and Key Metrics Changes - Excluding brokered CDs, deposit balances decreased by approximately 2% compared to the prior quarter, primarily due to a runoff of higher-cost time deposits [16] - Asset quality remained strong with annualized net charge-offs at just three basis points and total loans classified as special mention and substandard decreased by 5% [9][20] Company Strategy and Development Direction - The company is focused on launching the premier bank initiative, which is expected to drive organic deposit growth and additional margin improvement in the second half of the year [10][11] - The recruitment of commercial bankers has begun to pay dividends, with a significant increase in the commercial loan pipeline [12][15] - The company aims to maintain a diversified business model, growing both the premier bank and other segments like consumer banking and commercial real estate [128] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding economic uncertainty and its potential impact on rates and affordability [13] - The company anticipates a modest increase in operating expenses due to recent hires and expects to see additional margin expansion in the second half of the year [22][120] - Management noted that they are monitoring exposures to industries and geographies for any emerging impacts from recent political and administrative policy changes, but have seen no signs of weakness across their customer base [21] Other Important Information - The board approved a quarterly cash dividend of $0.20 for common shares, representing 57% of GAAP earnings [10] - The company repurchased nearly 400,000 shares for a total of $6.9 million at a weighted average cost of $17.2 per share [23][140] Q&A Session Summary Question: What sectors are targeted for the new teams brought over? - The teams have a robust variety of commercial clients, ranging from deposit-rich clients to traditional commercial borrowers [27] Question: What are the expectations for deposit rates and costs? - The portfolios maintained by these clients typically have a substantial portion of noninterest deposits, leading to an attractive cost of deposits [28][29] Question: What is the anticipated impact of the new hires on expenses? - The increase in expenses is primarily driven by compensation expense increases and some inflationary increases in contracts [32][33] Question: Can you provide an update on the Premier Bank initiative's reception? - The Premier Bank appeals to a certain segment of clients, and the majority of new customers are expected to be net additions to the bank [40][43] Question: What is the current concentration in commercial real estate (CRE)? - The CRE concentration at the bank level is 4.16%, and the company is happy with its current position, managing it prudently [107][108] Question: What are the expectations for loan growth in the second quarter? - The company anticipates mid-single-digit loan growth, supported by the progress in the Premier Bank initiative [136] Question: How does the company balance buybacks versus growth? - The company has options around capital management and can pursue both buybacks and growth depending on market conditions [140]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.35 on a fully diluted GAAP and core basis [6] - Net interest income grew by more than $3 million for the quarter, marking a nearly 4% increase [14] - Net interest margin expanded by 21 basis points, reaching a current margin of 2.9% [14][96] - Capital levels remained robust with an estimated common equity Tier one capital ratio of 11.2% and tangible book value per share of $19.16 [9] Business Line Data and Key Metrics Changes - Commercial and industrial loan growth was reported at 6%, or 24% annualized, with total commercial loan pipeline increasing to $376 million [7] - Loan originations for the quarter totaled $417 million, including $135 million of commercial and industrial originations [10] - Noninterest income decreased by 8% to $11.3 million, primarily driven by seasonally lower title fees and service charges [13] Market Data and Key Metrics Changes - Excluding brokered CDs, deposit balances decreased by approximately 2% compared to the prior quarter, primarily due to runoff of higher-cost time deposits [12] - Asset quality remained strong with non-performing loans at 0.37% and loans 30 to 89 days past due at 0.46% of total loans [14] Company Strategy and Development Direction - The company is focused on launching the Premier Bank initiative, which is expected to drive organic deposit growth and additional margin improvement in the second half of the year [9] - Management emphasized the importance of maintaining a diversified portfolio and avoiding concentration risks in their lending practices [104] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan demand and economic uncertainty, noting that it may impact rates, affordability, and production [11] - The company anticipates a 10% increase in quarterly operating expenses, primarily due to recent hiring efforts for the Premier Banking initiative [16] - Management expects additional margin expansion in the second half of the year, contingent on market conditions and potential Fed rate cuts [96] Other Important Information - The company approved a quarterly cash dividend of $0.20 for common shares, marking the 113th consecutive quarterly cash dividend [9] - The company plans to redeem $57.4 million of preferred stock on May 15 [17] Q&A Session Summary Question: What sectors are targeted for the new teams brought over? - The teams have a robust variety of commercial clients, including deposit-rich law firms and traditional commercial borrowers [19] Question: What are the expectations for deposit rates and costs? - The weighted average cost of deposits varies by team, with a substantial portion being non-interest bearing [20] Question: What is the anticipated expense increase related to the new hires? - The expense increase is primarily driven by compensation expense increases and some inflationary increases [24] Question: Can you provide an update on the Premier Bank initiative and customer reception? - The Premier Bank initiative is expected to attract net new customers, with a focus on providing tailored services [27][29] Question: What is the current concentration of commercial real estate (CRE) loans? - The CRE concentration at the bank level is 4.16%, with a focus on maintaining a diversified portfolio [85] Question: How does the company plan to balance buybacks versus growth? - The company has options for capital management, including share buybacks and retiring subordinated debt, depending on market conditions [113]

Core Insights - OceanFirst Financial (OCFC) reported revenue of $97.91 million for the quarter ended March 2025, reflecting a year-over-year decline of 0.6% and an EPS of $0.35 compared to $0.44 a year ago, with revenue exceeding the Zacks Consensus Estimate of $95.13 million by 2.92% [1] Financial Performance Metrics - Efficiency Ratio was reported at 65.7%, better than the estimated 69% by analysts [4] - Net Interest Margin stood at 2.9%, surpassing the average estimate of 2.7% [4] - Average Balance of Total Interest-Earning Assets was $12.11 billion, slightly below the estimated $12.31 billion [4] - Total Non-Interest Income was $11.25 million, lower than the average estimate of $11.82 million [4] - Net Interest Income reached $86.65 million, exceeding the average estimate of $83.31 million [4] - Bankcard Services Revenue was $1.46 million, below the estimated $1.81 million [4] - Fees and Service Charges totaled $4.71 million, compared to the average estimate of $6.14 million [4] - Income from Bank Owned Life Insurance was $1.85 million, lower than the estimated $2.29 million [4] Stock Performance - OceanFirst shares have returned -4.4% over the past month, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - OceanFirst Financial reported quarterly earnings of $0.35 per share, matching the Zacks Consensus Estimate, but down from $0.44 per share a year ago [1] - The company posted revenues of $97.91 million for the quarter, exceeding the Zacks Consensus Estimate by 2.92%, but down from $98.51 million year-over-year [2] Financial Performance - Over the last four quarters, OceanFirst has surpassed consensus EPS estimates two times [2] - The company has also topped consensus revenue estimates two times in the same period [2] - The current consensus EPS estimate for the upcoming quarter is $0.37, with expected revenues of $98.88 million, and for the current fiscal year, the EPS estimate is $1.56 on revenues of $402.62 million [7] Market Position - OceanFirst shares have declined approximately 9.7% since the beginning of the year, compared to a decline of 8.6% for the S&P 500 [3] - The Zacks Industry Rank for Financial - Savings and Loan is in the top 28% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of OceanFirst's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for OceanFirst is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6]