OceanFirst Financial Corp. Announces First Quarter Financial Results

/EIN News/ -- RED BANK, N.J., April 24, 2025 (GLOBE NEWSWIRE) -- 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 $20.5 million, or $0.35 per diluted share, for the quarter ended March 31, 2025, a decrease from $27.7 million, or $0.47 per diluted share, for the corresponding prior year period, and a decrease from $20.9 million, or $0.36 per diluted share, for the linked quarter. Selected performance metrics are as follows (refer to “Selected Quarterly Financial Data” for additional information):

		For the Three Months Ended,
		March 31,			December 31,			March 31,
Performance Ratios (Annualized):		2025			2024			2024
Return on average assets		0.62	%		0.61	%		0.82	%
Return on average stockholders’ equity		4.85			4.88			6.65
Return on average tangible stockholders’ equity (a)		7.05			7.12			9.61
Return on average tangible common equity (a)		7.40			7.47			10.09
Efficiency ratio		65.67			67.86			59.56
Net interest margin		2.90			2.69			2.81

_{^(a) Return on average tangible stockholders’ equity and return on average tangible common equity (“ROTCE”) are non-GAAP (“generally accepted accounting principles”) financial measures. Refer to “Explanation of Non-GAAP Financial Measures,” “Selected Quarterly Financial Data” and “Non-GAAP Reconciliation” tables for reconciliation and additional information regarding non-GAAP financial measures.}

Core earnings¹ for the quarter ended March 31, 2025 were $20.3 million, or $0.35 per diluted share, a decrease from $25.6 million, or $0.44 per diluted share, for the corresponding prior year period, and a decrease from $22.1 million, or $0.38 per diluted share, for the linked quarter.

Core earnings PTPP¹ for the quarter ended March 31, 2025 was $32.4 million, or $0.56 per diluted share, as compared to $36.2 million, or $0.62 per diluted share, for the corresponding prior year period, and $29.6 million, or $0.51 per diluted share, for the linked quarter. Selected performance metrics are as follows:

		For the Three Months Ended,
		March 31,				December 31,				March 31,
Core Ratios1 (Annualized):			2025				2024				2024
Return on average assets			0.62	%			0.65	%			0.76	%
Return on average tangible stockholders’ equity			7.00				7.51				8.91
Return on average tangible common equity			7.34				7.89				9.36
Efficiency ratio			65.81				67.74				61.05
Core diluted earnings per share		$	0.35			$	0.38			$	0.44
Core PTPP diluted earnings per share			0.56				0.51				0.62

Key developments for the recent quarter are described below:

• Margin Expansion: Net interest margin increased 21 basis points to 2.90%, from 2.69%, and net interest income increased by $3.3 million to $86.7 million driven by a decrease in total cost of deposits to 2.06% from 2.32% in the linked quarter.
• Commercial Loans: Commercial and industrial loans increased $95.1 million, or 6.1% as compared to the linked quarter. Additionally, the total commercial loan pipeline increased 90% to $375.6 million from $197.5 million in the linked quarter.
• Provision for Credit Losses: Provision for credit losses was $5.3 million reflecting a net loan reserve build of $5.2 million, primarily driven by elevated uncertainty around macroeconomic conditions. This resulted in an increase of five basis points in the allowance for loan credit losses to total loans to 0.78%. Criticized and classified loans decreased by 5% to $149.3 million compared to the linked quarter, providing strong evidence of stable credit performance for the Company’s loan portfolio.

Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “We are pleased to present our current quarter results, which reflect a meaningful expansion of net interest income and net interest margin, continued strong asset quality metrics, and further capital accretion, including share repurchases.” Mr. Maher added, “Additionally, we understand the increased market uncertainty and volatility, but we have confidence that the Company is well-positioned. Finally, we are pleased that the first quarter talent recruiting season has resulted in a robust addition of commercial banking talent. Reflecting the strength of the commercial banking platform we have built, 36 highly experienced commercial bankers have joined OceanFirst this year.”

The Company’s Board of Directors declared its 113th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on May 16, 2025 to common stockholders of record on May 5, 2025. The Company’s Board of Directors also previously declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 15, 2025 to preferred stockholders of record on April 30, 2025. The Company has notified the preferred stockholders that it intends to redeem the Series A Preferred Stock in full on May 15, 2025.

_{¹ Core earnings and core earnings before income taxes and provision for credit losses (“PTPP” or “Pre-Tax-Pre-Provision”), and ratios derived therefrom, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net (gain) loss on equity investments, net gain on sale of trust business, the opening provision for credit losses in connection with the acquisition of Spring Garden Capital Group, LLC (“Spring Garden”), the Federal Deposit Insurance Corporation (“FDIC”) special assessment, and the income tax effect of these items, (collectively referred to as “non-core” operations). PTPP excludes the aforementioned pre-tax “non-core” items along with income tax expense (benefit) and provision for credit losses (exclusive of the Spring Garden opening provision). Refer to “Explanation of Non-GAAP Financial Measures,” “Selected Quarterly Financial Data” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.}

Results of Operations

The current quarter was impacted by a decrease in average interest earning assets and liabilities, benefited from funding cost repricing efforts, and included a sale of non-performing residential and consumer loans of $5.1 million, which had related charge-offs of $720,000. Additionally, the current quarter included non-recurring benefits of $842,000 in other income and $1.3 million in normal incentive related adjustments.

Net Interest Income and Margin

Three months ended March 31, 2025 vs. March 31, 2024

Net interest income increased to $86.7 million, from $86.2 million, primarily reflecting the net impact of the decreasing interest rate environment. Net interest margin increased to 2.90%, from 2.81%, which included the impact of purchase accounting accretion and prepayment fees of 0.03% and 0.04%, respectively. Net interest margin increased primarily due to the decrease in cost of funds outpacing the decrease in yield on average interest-earning assets.

Average interest-earning assets decreased by $238.4 million primarily due to a decrease in commercial loans and securities. The average yield for interest-earning assets decreased to 5.13%, from 5.26%.

The cost of average interest-bearing liabilities decreased to 2.78%, from 3.03%, primarily due to lower cost of deposits and, to a lesser extent, Federal Home Loan Bank (“FHLB”) advances. The total cost of deposits decreased 25 basis points to 2.06%, from 2.31%. Average interest-bearing liabilities decreased by $226.1 million, primarily due to decreases in savings, time deposits and other borrowings, largely offset by an increase in FHLB advances.

Three months ended March 31, 2025 vs. December 31, 2024

Net interest income increased by $3.3 million and net interest margin increased to 2.90%, from 2.69%, primarily reflecting the impact of deposit repricing. Net interest income included the impact of purchase accounting accretion and prepayment fees of 0.03% in the current quarter and none in the prior quarter.

Average interest-earning assets decreased by $219.5 million, primarily due to decreases in securities and interest-earning cash deposits. The yield on average interest-earning assets decreased to 5.13%, from 5.15%.

Average interest-bearing liabilities decreased by $211.3 million, primarily due to decreases in deposits and other borrowings, partly offset by an increase in FHLB advances. The total cost of average interest-bearing liabilities decreased to 2.78%, from 3.04%, primarily due to lower cost of deposits. The total cost of deposits decreased to 2.06%, from 2.32%.

Provision for Credit Losses

Provision for credit losses for the quarter ended March 31, 2025 was $5.3 million, as compared to $591,000 for the corresponding prior year period and $3.5 million for the linked quarter. The linked quarter included a $1.4 million initial provision for credit losses related to the acquisition of Spring Garden. The current quarter provision was primarily driven by elevated uncertainty around macroeconomic conditions.

Net loan charge-offs were $636,000 for the quarter ended March 31, 2025, as compared to net loan charge-offs of $349,000 for the corresponding prior year period and net loan recoveries of $158,000 in the linked quarter. The current quarter includes charge-offs of $720,000 related to the sale of $5.1 million non-performing residential and consumer loans. Refer to “Results of Operations” section for further discussion.

Non-interest Income

Three months ended March 31, 2025 vs. March 31, 2024

Other income decreased to $11.3 million, as compared to $12.3 million. Other income was favorably impacted by non-core operations of $205,000 related to net gains on equity investments in the current quarter. The prior year other income was favorably impacted by non-core operations of $3.1 million related to net gains on equity investments and a gain on sale of a portion of the Company’s trust business.

Excluding non-core operations, other income increased by $1.8 million. The primary drivers were increases related to net gain on sale of loans of $501,000, commercial loan swap income of $482,000, and an increase in non-recurring other income of $842,000 as noted above.

Three months ended March 31, 2025 vs. December 31, 2024

Excluding non-core operations, other income decreased by $1.2 million from $12.2 million in the linked quarter. The primary drivers were decreases in fees and service charges of $1.5 million, primarily due to lower title fee income as a result of seasonality, and income from bank owned life insurance of $686,000, related to non-recurring death benefits of $768,000 in the linked quarter. This was partly offset by increases in commercial loan swap income of $534,000 and non-recurring other income of $842,000 noted above.

Non-interest Expense

Three months ended March 31, 2025 vs. March 31, 2024

Operating expenses increased to $64.3 million, as compared to $58.7 million. Operating expenses in the prior year were adversely impacted by non-core operations of $418,000 from an FDIC special assessment.

Excluding non-core operations, operating expenses increased by $6.0 million. The primary driver was an increase in compensation and benefits of $4.0 million, mostly due to acquisitions at the end of the prior year and annual merit increases. Additional drivers were increases in other operating expenses of $1.0 million, due to additional loan servicing expense, and increases in data processing expense of $691,000, partly due to acquisitions at the end of the prior year.

Three months ended March 31, 2025 vs. December 31, 2024

Operating expenses in the linked quarter were $64.8 million and were adversely impacted by non-core items of $110,000 from merger-related expenses. Excluding non-core operations, operating expenses decreased by $445,000. This included a decrease in normal incentive related adjustments of $1.3 million, offset by annual merit increases during the year. Additionally, there were decreases in other operating expense of $840,000, mostly related to lower title costs and marketing of $507,000. This was partly offset by an increase in federal deposit insurance and regulatory assessments of $466,000.

Income Tax Expense

The provision for income taxes was $6.8 million for the quarter ended March 31, 2025, as compared to $10.6 million for the same prior year period and $5.1 million for the linked quarter. The effective tax rate was 24.1% for the quarter ended March 31, 2025, as compared to 27.1% for the same prior year period and 18.7% for the linked quarter. The prior year’s effective tax rate was negatively impacted by 3.0% due to a one-time write-off of a deferred tax asset of $1.2 million. The linked quarter’s effective tax rate was positively impacted by utilization of higher tax credits.

Financial Condition

March 31, 2025 vs. December 31, 2024

Total assets decreased by $112.0 million to $13.31 billion, from $13.42 billion, primarily due to decreases in total debt securities. Debt securities available-for-sale decreased by $81.3 million to $746.2 million, from $827.5 million, primarily due to principal reductions, maturities and calls. Debt securities held-to-maturity decreased by $40.4 million to $1.01 billion, from $1.05 billion, primarily due to principal repayments. Loans held-for-sale decreased by $11.5 million to $9.7 million from $21.2 million. Total loans increased by $7.2 million to $10.13 billion, from $10.12 billion, while the loan pipeline increased by $197.8 million to $504.4 million, from $306.7 million. Other assets decreased by $14.9 million to $170.8 million, from $185.7 million, primarily due to a decrease in market values associated with customer interest rate swap programs.

Total liabilities decreased by $118.3 million to $11.60 billion, from $11.72 billion primarily related to a funding mix-shift. Deposits increased by $110.7 million to $10.18 billion, from $10.07 billion, primarily due to increases in non-interest bearing, savings and time deposits. Time deposits increased to $2.12 billion, from $2.08 billion, representing 20.8% and 20.7% of total deposits, respectively. Time deposits included an increase in brokered time deposits of $295.8 million, offset by a decrease in retail time deposits of $251.1 million. The loan-to-deposit ratio was 99.5%, as compared to 100.5%. FHLB advances decreased by $181.6 million to $891.0 million, from $1.07 billion partly driven by a shift to slightly favorably priced brokered deposits.

Other liabilities decreased by $58.0 million to $240.4 million, from $298.4 million, primarily due to a decrease in the market values of derivatives associated with customer interest rate swaps and related collateral received from counterparties.

Capital levels remain strong and in excess of “well-capitalized” regulatory levels at March 31, 2025, including the Company’s estimated common equity tier one capital ratio which remained at 11.2%.

Total stockholders’ equity increased to $1.71 billion, as compared to $1.70 billion, primarily reflecting net income, partially offset by capital returns comprising of dividends and share repurchases. During the quarter ended March 31, 2025, the Company repurchased 398,395 shares totaling $6.9 million representing a weighted average cost of $17.20. The Company had 1,228,863 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $2.6 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.

The Company’s tangible common equity² increased by $7.3 million to $1.12 billion. The Company’s stockholders’ equity to assets ratio was 12.84% at March 31, 2025, and tangible common equity to tangible assets ratio increased by 14 basis points during the quarter to 8.76%, primarily due to the drivers described above.

Book value per common share increased to $29.27, as compared to $29.08. Tangible book value per common share² increased to $19.16, as compared to $18.98.

_{² Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures and exclude the impact of intangible assets, goodwill, and preferred equity from both stockholders’ equity and total assets. Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.}

Asset Quality

March 31, 2025 vs. December 31, 2024

The Company’s non-performing loans increased to $37.0 million, from $35.5 million, and represented 0.37% and 0.35% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 213.14%, as compared to 207.19%. The level of 30 to 89 days delinquent loans increased to $46.2 million, from $36.6 million, primarily related to commercial loans. Criticized and classified assets, including other real estate owned, decreased to $151.2 million, from $159.9 million. The Company’s allowance for loan credit losses was 0.78% of total loans, as compared to 0.73%. Refer to “Provision for Credit Losses” section for further discussion.

The Company’s asset quality, excluding purchased with credit deterioration (“PCD”) loans, was as follows. Non-performing loans increased to $29.2 million, from $27.6 million. The allowance for loan credit losses as a percentage of total non-performing loans was 269.43%, as compared to 266.73%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, increased to $35.8 million, from $33.6 million.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations and in some instances excluding income taxes and provision for credit losses, and reporting equity and asset amounts excluding intangible assets, goodwill or preferred stock, all of which can vary from period to period, provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.

Annual Meeting

The Company previously announced that its Annual Meeting of Stockholders will be held on Monday, May 19, 2025 at 8:00 a.m. Eastern Time. The record date for stockholders to vote at the Annual Meeting is Tuesday, March 25, 2025. Voting before the meeting is encouraged, even for stockholders planning to participate in the virtual webcast. Votes may be submitted by telephone or online according to the instructions on the proxy card or by mail. A link to the live webcast is available by visiting oceanfirst.com - Investor Relations. Access will begin at 7:45 a.m. Eastern Time to allow time for stockholders to log-in with the control number provided on the proxy card prior to the 8:00 a.m. Eastern Time scheduled start. Eligible stockholders may also vote during the live meeting online at www.virtualshareholdermeeting.com/OCFC2025 by entering the 16-digit control number included on the proxy card or notice. As a reminder, participants of the meeting are not required to vote. Additional information regarding virtual access to the meeting will be distributed prior to the meeting.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, April 25, 2025 at 11:00 a.m. Eastern Time. The direct dial number for the call is (833) 470-1428, using the access code 934356. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (855) 762-8306, from one hour after the end of the call until May 2, 2025. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $13.3 billion regional bank providing financial services throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com. 

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project”, “will”, “should”, “may”, “view”, “opportunity”, “potential”, or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, inflation, general economic conditions, including potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the imposition of tariffs or other domestic or international governmental policies, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio, and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
		March 31,				December 31,				March 31,
			2025				2024				2024
		(Unaudited)								(Unaudited)
Assets
Cash and due from banks		$	163,721			$	123,615			$	130,422
Debt securities available-for-sale, at estimated fair value			746,168				827,500				744,944
Debt securities held-to-maturity, net of allowance for securities credit losses of $898 at March 31, 2025, $967 at December 31, 2024, and $1,058 at March 31, 2024 (estimated fair value of $926,075 at March 31, 2025, $952,917 at December 31, 2024, and $1,029,965 at March 31, 2024)			1,005,476				1,045,875				1,128,666
Equity investments			87,365				84,104				103,201
Restricted equity investments, at cost			102,172				108,634				85,689
Loans receivable, net of allowance for loan credit losses of $78,798 at March 31, 2025, $73,607 at December 31, 2024, and $67,173 at March 31, 2024			10,058,072				10,055,429				10,068,209
Loans held-for-sale			9,698				21,211				4,702
Interest and dividends receivable			44,843				45,914				52,502
Other real estate owned			1,917				1,811				—
Premises and equipment, net			114,588				115,256				119,211
Bank owned life insurance			269,398				270,208				266,615
Assets held for sale			—				—				28
Goodwill			523,308				523,308				506,146
Intangibles			11,740				12,680				8,669
Other assets			170,812				185,702				199,974
Total assets		$	13,309,278			$	13,421,247			$	13,418,978
Liabilities and Stockholders’ Equity
Deposits		$	10,177,023			$	10,066,342			$	10,236,851
Federal Home Loan Bank advances			891,021				1,072,611				658,436
Securities sold under agreements to repurchase with customers			65,132				60,567				66,798
Other borrowings			197,808				197,546				425,722
Advances by borrowers for taxes and insurance			28,789				23,031				28,187
Other liabilities			240,388				298,393				337,147
Total liabilities			11,600,161				11,718,490				11,753,141
Stockholders’ equity:
OceanFirst Financial Corp. stockholders’ equity			1,708,322				1,701,650				1,665,112
Non-controlling interest			795				1,107				725
Total stockholders’ equity			1,709,117				1,702,757				1,665,837
Total liabilities and stockholders’ equity		$	13,309,278			$	13,421,247			$	13,418,978

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
		For the Three Months Ended,
		March 31,				December 31,				March 31,
			2025				2024				2024
		|---------------------- (Unaudited) ----------------------|
Interest income:
Loans		$	133,019			$	135,438			$	137,121
Debt securities			17,270				19,400				19,861
Equity investments and other			3,414				4,782				4,620
Total interest income			153,703				159,620				161,602
Interest expense:
Deposits			51,046				59,889				59,855
Borrowed funds			16,005				16,402				15,523
Total interest expense			67,051				76,291				75,378
Net interest income			86,652				83,329				86,224
Provision for credit losses			5,340				3,467				591
Net interest income after provision for credit losses			81,312				79,862				85,633
Other income:
Bankcard services revenue			1,463				1,595				1,416
Trust and asset management revenue			406				416				526
Fees and service charges			4,712				6,207				4,473
Net gain on sales of loans			858				1,076				357
Net gain (loss) on equity investments			205				(5	)			1,923
Net loss from other real estate operations			(16	)			(20	)			—
Income from bank owned life insurance			1,852				2,538				1,862
Commercial loan swap income			620				86				138
Other			1,153				339				1,591
Total other income			11,253				12,232				12,286
Operating expenses:
Compensation and employee benefits			36,740				36,602				32,759
Occupancy			5,497				5,280				5,199
Equipment			921				1,026				1,130
Marketing			1,108				1,615				990
Federal deposit insurance and regulatory assessments			2,983				2,517				3,135
Data processing			6,647				6,366				5,956
Check card processing			1,170				1,134				1,050
Professional fees			2,425				2,620				2,732
Amortization of intangibles			940				876				844
Merger related expenses			—				110				—
Other operating expense			5,863				6,703				4,877
Total operating expenses			64,294				64,849				58,672
Income before provision for income taxes			28,271				27,245				39,247
Provision for income taxes			6,808				5,083				10,637
Net income			21,463				22,162				28,610
Net (loss) income attributable to non-controlling interest			(46	)			253				(57	)
Net income attributable to OceanFirst Financial Corp.			21,509				21,909				28,667
Dividends on preferred shares			1,004				1,004				1,004
Net income available to common stockholders		$	20,505			$	20,905			$	27,663
Basic earnings per share		$	0.35			$	0.36			$	0.47
Diluted earnings per share		$	0.35			$	0.36			$	0.47
Average basic shares outstanding			58,102				58,026				58,789
Average diluted shares outstanding			58,111				58,055				58,791

OceanFirst Financial Corp.
SELECTEDLOANAND DEPOSIT DATA
(dollars in thousands)
LOANS RECEIVABLE				At
				March 31,				December 31,				September 30,				June 30,				March 31,
					2025				2024				2024				2024				2024
Commercial:
Commercial real estate - investor				$	5,200,137			$	5,287,683			$	5,273,159			$	5,324,994			$	5,322,755
Commercial and industrial:
Commercial and industrial - real estate (1)					896,647				902,219				841,930				857,710				914,582
Commercial and industrial - non-real estate (1)					748,575				647,945				660,879				616,400				677,176
Total commercial and industrial					1,645,222				1,550,164				1,502,809				1,474,110				1,591,758
Total commercial					6,845,359				6,837,847				6,775,968				6,799,104				6,914,513
Consumer:
Residential real estate					3,053,318				3,049,763				3,003,213				2,977,698				2,965,276
Home equity loans and lines and other consumer ("other consumer")					226,633				230,462				242,975				242,526				245,859
Total consumer					3,279,951				3,280,225				3,246,188				3,220,224				3,211,135
Total loans					10,125,310				10,118,072				10,022,156				10,019,328				10,125,648
Deferred origination costs (fees), net					11,560				10,964				10,508				10,628				9,734
Allowance for loan credit losses					(78,798	)			(73,607	)			(69,066	)			(68,839	)			(67,173	)
Loans receivable, net				$	10,058,072			$	10,055,429			$	9,963,598			$	9,961,117			$	10,068,209
Mortgage loans serviced for others				$	222,963			$	191,279			$	142,394			$	104,136			$	89,555
	At March 31, 2025 Average Yield
Loan pipeline (2):
Commercial	7.37	%		$	375,622			$	197,491			$	199,818			$	166,206			$	66,167
Residential real estate	6.41				116,121				97,385				137,978				80,330				57,340
Other consumer	8.51				12,681				11,783				13,788				12,586				13,030
Total	7.18	%		$	504,424			$	306,659			$	351,584			$	259,122			$	136,537

	For the Three Months Ended
	March 31,							December 31,				September 30,				June 30,				March 31,
	2025								2024				2024				2024				2024
	Average Yield
Loan originations:
Commercial (3)	7.61	%		$	233,968			$	268,613			$	245,886			$	56,053			$	123,010
Residential real estate	6.53				167,162				235,370				169,273				121,388				78,270
Other consumer	8.49				15,825				11,204				15,760				16,970				11,405
Total	7.21	%		$	416,955			$	515,187			$	430,919			$	194,411			$	212,685
Loans sold				$	104,991		(4)	$	127,508			$	65,296			$	45,045			$	29,965

(1)	During the quarter ended March 31, 2025, the Company retrospectively reclassified loans which were previously referred to as ‘commercial real estate - owner occupied’ and ‘commercial and industrial’ to ‘commercial and industrial - real estate’ and ‘commercial and industrial - non-real estate’, respectively. Collectively, these loans are referred to as ‘commercial and industrial’.
(2)	Loan pipeline includes loans approved but not funded.
(3)	Excludes commercial loan pool purchases of $24.3 million and $76.1 million for the three months ended March 31, 2025 and December 31, 2024, respectively.
(4)	Excludes sale of non-performing residential and consumer loans of $5.1 million for the three months ended March 31, 2025.

 

DEPOSITS		At
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Type of Account
Non-interest-bearing		$	1,660,738			$	1,617,182			$	1,638,447			$	1,632,521			$	1,639,828
Interest-bearing checking			4,006,653				4,000,553				3,896,348				3,667,837				3,865,699
Money market			1,337,570				1,301,197				1,288,555				1,210,312				1,150,979
Savings			1,052,504				1,066,438				1,071,946				1,115,688				1,260,309
Time deposits (1)			2,119,558				2,080,972				2,220,871				2,367,659				2,320,036
Total deposits		$	10,177,023			$	10,066,342			$	10,116,167			$	9,994,017			$	10,236,851

(1)	Includes brokered time deposits of $370.5 million, $74.7 million, $201.0 million, $401.6 million, and $543.4 million at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively.

 

OceanFirst Financial Corp.
ASSET QUALITY
(dollars in thousands)
		March 31,				December 31,				September 30,				June 30,				March 31,
ASSET QUALITY(1)			2025				2024				2024				2024				2024
Non-performing loans:
Commercial real estate - investor		$	23,595			$	17,000			$	12,478			$	19,761			$	21,507
Commercial and industrial:
Commercial and industrial - real estate			4,690				4,787				4,368				4,081				3,355
Commercial and industrial - non-real estate			22				32				122				434				567
Total commercial and industrial			4,712				4,819				4,490				4,515				3,922
Residential real estate			5,709				10,644				9,108				7,213				7,181
Other consumer			2,954				3,064				2,063				1,933				2,401
Total non-performing loans(1)		$	36,970			$	35,527			$	28,139			$	33,422			$	35,011
Other real estate owned			1,917				1,811				—				—				—
Total non-performing assets		$	38,887			$	37,338			$	28,139			$	33,422			$	35,011
Delinquent loans 30 to 89 days		$	46,246			$	36,550			$	15,458			$	9,655			$	17,534
Modifications to borrowers experiencing financial difficulty(2)
Non-performing (included in total non-performing loans above)		$	8,307			$	3,232			$	3,043			$	3,210			$	3,467
Performing			27,592				27,631				20,652				20,529				8,579
Total modifications to borrowers experiencing financial difficulty(2)		$	35,899			$	30,863			$	23,695			$	23,739			$	12,046
Allowance for loan credit losses		$	78,798			$	73,607			$	69,066			$	68,839			$	67,173
Allowance for loan credit losses as a percent of total loans receivable(3)			0.78	%			0.73	%			0.69	%			0.69	%			0.66	%
Allowance for loan credit losses as a percent of total non-performing loans(3)			213.14				207.19				245.45				205.97				191.86
Non-performing loans as a percent of total loans receivable			0.37				0.35				0.28				0.33				0.35
Non-performing assets as a percent of total assets			0.29				0.28				0.21				0.25				0.26
Supplemental PCD and non-performing loans
PCD loans, net of allowance for loan credit losses		$	21,737			$	22,006			$	15,323			$	16,058			$	16,700
Non-performing PCD loans			7,724				7,931				2,887				2,841				3,525
Delinquent PCD and non-performing loans 30 to 89 days			10,489				2,997				1,279				1,188				2,088
PCD modifications to borrowers experiencing financial difficulty(2)			22				23				24				26				25
Asset quality, excluding PCD loans(4)
Non-performing loans(1)			29,246				27,596				25,252				30,581				31,486
Non-performing assets			31,163				29,407				25,252				30,581				31,486
Delinquent loans 30 to 89 days (excludes non-performing loans)			35,757				33,553				14,179				8,467				15,446
Modifications to borrowers experiencing financial difficulty(2)			35,877				30,840				23,671				23,713				12,021
Allowance for loan credit losses as a percent of total non-performing loans(3)			269.43	%			266.73	%			273.51	%			225.10	%			213.34	%
Non-performing loans as a percent of total loans receivable			0.29				0.27				0.25				0.31				0.31
Non-performing assets as a percent of total assets			0.23				0.22				0.19				0.23				0.23

(1)	The quarter ended March 31, 2025 included the sale of non-performing residential and consumer loans of $5.1 million and the quarter ended September 30, 2024 included the resolution of a single commercial relationship exposure of $7.2 million.
(2)	Balances have been revised to represent only modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023.
(3)	Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $5.6 million, $6.0 million, $5.7 million, $6.1 million and $7.0 million at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively.
(4)	All balances and ratios exclude PCD loans.

NET LOAN (CHARGE-OFFS) RECOVERIES		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Net loan (charge-offs) recoveries:
Loan charge-offs		$	(798	)		$	(55	)		$	(124	)		$	(1,600	)		$	(441	)
Recoveries on loans			162				213				212				148				92
Net loan (charge-offs) recoveries		$	(636	)		$	158			$	88			$	(1,452	)		$	(349	)
Net loan (charge-offs) recoveries to average total loans (annualized)			0.03	%			NM	*			NM	*			0.06	%			0.01	%
Net loan (charge-offs) recoveries detail:
Commercial		$	25			$	92			$	129			$	(1,576	)	(1)	$	(35	)
Residential real estate			(720	)	(2)		(17	)			(6	)			87				66
Other consumer			59				83				(35	)			37				(380	)
Net loan (charge-offs) recoveries		$	(636	)		$	158			$	88			$	(1,452	)		$	(349	)

(1)	The three months ended June 30, 2024 included a charge-off related to a single commercial real estate relationship of $1.6 million.
(2)	The three months ended March 31, 2025 included charge-offs of $720,000 related to the sale of non-performing residential loans.
*	Not meaningful as amounts are net loan recoveries.

 

OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
		For the Three Months Ended
		March 31, 2025										December 31, 2024										March 31, 2024
(dollars in thousands)		Average Balance				Interest			Average Yield/ Cost (1)			Average Balance				Interest			Average Yield/ Cost (1)			Average Balance				Interest			Average Yield/ Cost (1)
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments		$	95,439			$	983		4.18	%		$	195,830			$	2,415		4.91	%		$	163,192			$	2,226		5.49	%
Securities (2)			2,003,206				19,701		3.99				2,116,911				21,767		4.09				2,098,421				22,255		4.27
Loans receivable, net (3)
Commercial			6,781,005				98,260		5.88				6,794,158				101,003		5.91				6,925,048				104,421		6.06
Residential real estate			3,065,679				31,270		4.08				3,049,092				30,455		4.00				2,974,468				28,596		3.85
Other consumer			228,553				3,489		6.19				236,161				3,980		6.70				248,396				4,104		6.65
Allowance for loan credit losses, net of deferred loan costs and fees			(61,854	)			—		—				(60,669	)			—		—				(59,141	)			—		—
Loans receivable, net			10,013,383				133,019		5.37				10,018,742				135,438		5.38				10,088,771				137,121		5.46
Total interest-earning assets			12,112,028				153,703		5.13				12,331,483				159,620		5.15				12,350,384				161,602		5.26
Non-interest-earning assets			1,199,865										1,213,569										1,206,336
Total assets		$	13,311,893									$	13,545,052									$	13,556,720
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing checking		$	4,135,952				21,433		2.10	%		$	4,050,428				22,750		2.23	%		$	3,925,965				20,795		2.13	%
Money market			1,322,003				9,353		2.87				1,325,119				10,841		3.25				1,092,003				9,172		3.38
Savings			1,058,015				1,785		0.68				1,070,816				2,138		0.79				1,355,718				4,462		1.32
Time deposits			1,916,109				18,475		3.91				2,212,750				24,160		4.34				2,414,063				25,426		4.24
Total			8,432,079				51,046		2.46				8,659,113				59,889		2.75				8,787,749				59,855		2.74
FHLB Advances			996,293				11,359		4.62				854,748				10,030		4.67				644,818				7,771		4.85
Securities sold under agreements to repurchase			64,314				428		2.70				76,856				513		2.66				68,500				411		2.41
Other borrowings			283,150				4,218		6.04				396,412				5,859		5.88				500,901				7,341		5.89
Total borrowings			1,343,757				16,005		4.83				1,328,016				16,402		4.91				1,214,219				15,523		5.14
Total interest-bearing liabilities			9,775,836				67,051		2.78				9,987,129				76,291		3.04				10,001,968				75,378		3.03
Non-interest-bearing deposits			1,597,972										1,627,376										1,634,583
Non-interest-bearing liabilities			222,951										227,221										247,129
Total liabilities			11,596,759										11,841,726										11,883,680
Stockholders’ equity			1,715,134										1,703,326										1,673,040
Total liabilities and equity		$	13,311,893									$	13,545,052									$	13,556,720
Net interest income						$	86,652									$	83,329									$	86,224
Net interest rate spread (4)									2.35	%									2.11	%									2.23	%
Net interest margin (5)									2.90	%									2.69	%									2.81	%
Total cost of deposits (including non-interest-bearing deposits)									2.06	%									2.32	%									2.31	%

(1)	Average yields and costs are annualized.
(2)	Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
(3)	Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held for sale and non-performing loans.
(4)	Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5)	Net interest margin represents net interest income divided by average interest-earning assets.

 

OceanFirst Financial Corp.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share amounts)
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Selected Financial Condition Data:
Total assets		$	13,309,278			$	13,421,247			$	13,488,483			$	13,321,755			$	13,418,978
Debt securities available-for-sale, at estimated fair value			746,168				827,500				911,753				721,484				744,944
Debt securities held-to-maturity, net of allowance for securities credit losses			1,005,476				1,045,875				1,075,131				1,105,843				1,128,666
Equity investments			87,365				84,104				95,688				104,132				103,201
Restricted equity investments, at cost			102,172				108,634				98,545				92,679				85,689
Loans receivable, net of allowance for loan credit losses			10,058,072				10,055,429				9,963,598				9,961,117				10,068,209
Deposits			10,177,023				10,066,342				10,116,167				9,994,017				10,236,851
Federal Home Loan Bank advances			891,021				1,072,611				891,860				789,337				658,436
Securities sold under agreements to repurchase and other borrowings			262,940				258,113				501,090				504,490				492,520
Total stockholders’ equity			1,709,117				1,702,757				1,694,508				1,676,669				1,665,837

		For the Three Months Ended,
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Selected Operating Data:
Interest income		$	153,703			$	159,620			$	161,525			$	159,426			$	161,602
Interest expense			67,051				76,291				79,306				77,163				75,378
Net interest income			86,652				83,329				82,219				82,263				86,224
Provision for credit losses (excluding Spring Garden)			5,340				2,041				517				3,114				591
Spring Garden opening provision for credit losses			—				1,426				—				—				—
Net interest income after provision for credit losses			81,312				79,862				81,702				79,149				85,633
Other income (excluding equity investments and sale of trust)			11,048				12,237				11,826				10,098				9,201
Net gain (loss) on equity investments			205				(5	)			1,420				887				1,923
Net gain on sale of trust business			—				—				1,438				—				1,162
Operating expenses (excluding FDIC special assessment and merger related expenses)			64,294				64,739				62,067				58,620				58,254
FDIC special assessment			—				—				—				—				418
Merger related expenses			—				110				1,669				—				—
Income before provision for income taxes			28,271				27,245				32,650				31,514				39,247
Provision for income taxes			6,808				5,083				7,464				7,082				10,637
Net income			21,463				22,162				25,186				24,432				28,610
Net (loss) income attributable to non-controlling interest			(46	)			253				70				59				(57	)
Net income attributable to OceanFirst Financial Corp.		$	21,509			$	21,909			$	25,116			$	24,373			$	28,667
Net income available to common stockholders		$	20,505			$	20,905			$	24,112			$	23,369			$	27,663
Diluted earnings per share		$	0.35			$	0.36			$	0.42			$	0.40			$	0.47
Net accretion/amortization of purchase accounting adjustments included in net interest income		$	219			$	20			$	741			$	1,086			$	921

		At or For the Three Months Ended
		March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
Selected Financial Ratios and Other Data (1) (2):
Performance Ratios (Annualized):
Return on average assets (3)		0.62	%		0.61	%		0.71	%		0.70	%		0.82	%
Return on average tangible assets (3) (4)		0.65			0.64			0.74			0.73			0.85
Return on average stockholders’ equity (3)		4.85			4.88			5.68			5.61			6.65
Return on average tangible stockholders’ equity (3) (4)		7.05			7.12			8.16			8.10			9.61
Return on average tangible common equity (3) (4)		7.40			7.47			8.57			8.51			10.09
Stockholders’ equity to total assets		12.84			12.69			12.56			12.59			12.41
Tangible stockholders’ equity to tangible assets (4)		9.19			9.06			9.10			9.08			8.92
Tangible common equity to tangible assets (4)		8.76			8.62			8.68			8.64			8.49
Net interest rate spread		2.35			2.11			2.06			2.11			2.23
Net interest margin		2.90			2.69			2.67			2.71			2.81
Operating expenses to average assets		1.96			1.90			1.89			1.75			1.74
Efficiency ratio (5)		65.67			67.86			65.77			62.86			59.56
Loan-to-deposit ratio		99.50			100.50			99.10			100.30			98.90

		At or For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Trust and Asset Management:
Wealth assets under administration and management (“AUA/M”)		$	149,106			$	147,956			$	152,797			$	150,519			$	236,891
Nest Egg AUA/M			453,803				431,434				430,413				403,647				407,478
Total AUA/M			602,909				579,390				583,210				554,166				644,369
Per Share Data:
Cash dividends per common share		$	0.20			$	0.20			$	0.20			$	0.20			$	0.20
Book value per common share at end of period			29.27				29.08				29.02				28.67				28.32
Tangible book value per common share at end of period (4)			19.16				18.98				19.28				18.93				18.63
Common shares outstanding at end of period			58,383,525				58,554,871				58,397,094				58,481,418				58,812,498
Preferred shares outstanding at end of period			57,370				57,370				57,370				57,370				57,370
Number of full-service customer facilities:			39				39				39				39				39
Quarterly Average Balances
Total securities		$	2,003,206			$	2,116,911			$	2,063,633			$	2,058,711			$	2,098,421
Loans receivable, net			10,013,383				10,018,742				9,958,794				10,012,491				10,088,771
Total interest-earning assets			12,112,028				12,331,483				12,232,672				12,203,776				12,350,384
Total goodwill and intangibles			535,657				534,942				513,731				514,535				515,356
Total assets			13,311,893				13,545,052				13,438,696				13,441,218				13,556,720
Time deposits			1,916,109				2,212,750				2,339,370				2,337,458				2,414,063
Total deposits (including non-interest-bearing deposits)			10,030,051				10,286,489				10,175,856				10,173,315				10,422,332
Total borrowings			1,343,757				1,328,016				1,333,245				1,325,372				1,214,219
Total interest-bearing liabilities			9,775,836				9,987,129				9,874,358				9,872,522				10,001,968
Non-interest bearing deposits			1,597,972				1,627,376				1,634,743				1,626,165				1,634,583
Stockholders' equity			1,715,134				1,703,326				1,689,035				1,674,453				1,673,040
Tangible stockholders’ equity (4)			1,179,477				1,168,384				1,175,304				1,159,918				1,157,684
Quarterly Yields and Costs
Total securities			3.99	%			4.09	%			4.23	%			4.22	%			4.27	%
Loans receivable, net			5.37				5.38				5.46				5.46				5.46
Total interest-earning assets			5.13				5.15				5.26				5.25				5.26
Time deposits			3.91				4.34				4.58				4.46				4.24
Total cost of deposits (including non-interest-bearing deposits)			2.06				2.32				2.44				2.37				2.31
Total borrowed funds			4.83				4.91				5.07				5.19				5.14
Total interest-bearing liabilities			2.78				3.04				3.20				3.14				3.03
Net interest spread			2.35				2.11				2.06				2.11				2.23
Net interest margin			2.90				2.69				2.67				2.71				2.81

(1)	With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2)	Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to “Non-GAAP Reconciliation.”
(3)	Ratios for each period are based on net income available to common stockholders.
(4)	Tangible stockholders’ equity and tangible assets exclude goodwill and other intangibles. Tangible common equity (also referred to as “tangible book value”) excludes goodwill, intangibles and preferred equity. Refer to “Non-GAAP Reconciliation.”
(5)	Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.

OceanFirst Financial Corp.
OTHER ITEMS
(dollars in thousands, except per share amounts)
NON-GAAP RECONCILIATION
		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Core Earnings:
Net income available to common stockholders (GAAP)		$	20,505			$	20,905			$	24,112			$	23,369			$	27,663
(Less) add non-recurring and non-core items:
Spring Garden opening provision for credit losses			—				1,426				—				—				—
Net (gain) loss on equity investments			(205	)			5				(1,420	)			(887	)			(1,923	)
Net gain on sale of trust business			—				—				(1,438	)			—				(1,162	)
FDIC special assessment			—				—				—				—				418
Merger related expenses			—				110				1,669				—				—
Income tax expense (benefit) on items			49				(388	)			270				188				642
Core earnings (Non-GAAP)		$	20,349			$	22,058			$	23,193			$	22,670			$	25,638
Income tax expense		$	6,808			$	5,083			$	7,464			$	7,082			$	10,637
Provision for credit losses			5,340				3,467				517				3,114				591
Less: non-core provision for credit losses			—				1,426				—				—				—
Less: income tax expense (benefit) on non-core items			49				(388	)			270				188				642
Core earnings PTPP (Non-GAAP)		$	32,448			$	29,570			$	30,904			$	32,678			$	36,224
Core earnings diluted earnings per share		$	0.35			$	0.38			$	0.39			$	0.39			$	0.44
Core earnings PTPP diluted earnings per share		$	0.56			$	0.51			$	0.53			$	0.56			$	0.62
Core Ratios (Annualized):
Return on average assets			0.62	%			0.65	%			0.69	%			0.68	%			0.76	%
Return on average tangible stockholders’ equity			7.00				7.51				7.85				7.86				8.91
Return on average tangible common equity			7.34				7.89				8.24				8.26				9.36
Efficiency ratio			65.81				67.74				66.00				63.47				61.05

		March 31,				December 31,				September 30,				June 30,				March 31,
			2025				2024				2024				2024				2024
Tangible Equity:
Total stockholders' equity		$	1,709,117			$	1,702,757			$	1,694,508			$	1,676,669			$	1,665,837
Less:
Goodwill			523,308				523,308				506,146				506,146				506,146
Intangibles			11,740				12,680				7,056				7,859				8,669
Tangible stockholders' equity			1,174,069				1,166,769				1,181,306				1,162,664				1,151,022
Less:
Preferred stock			55,527				55,527				55,527				55,527				55,527
Tangible common equity		$	1,118,542			$	1,111,242			$	1,125,779			$	1,107,137			$	1,095,495
Tangible Assets:
Total assets		$	13,309,278			$	13,421,247			$	13,488,483			$	13,321,755			$	13,418,978
Less:
Goodwill			523,308				523,308				506,146				506,146				506,146
Intangibles			11,740				12,680				7,056				7,859				8,669
Tangible assets		$	12,774,230			$	12,885,259			$	12,975,281			$	12,807,750			$	12,904,163
Tangible stockholders' equity to tangible assets			9.19	%			9.06	%			9.10	%			9.08	%			8.92	%
Tangible common equity to tangible assets			8.76	%			8.62	%			8.68	%			8.64	%			8.49	%

Company Contact:

Patrick S. Barrett
Chief Financial Officer
OceanFirst Financial Corp.
Tel: (732) 240-4500, ext. 27507
Email: pbarrett@oceanfirst.com