OceanFirst Financial Corporation

08/07/2026 | Press release | Distributed by Public on 08/07/2026 14:10

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
FINANCIAL SUMMARY(1)
At or for the Quarters Ended
(dollars in thousands, except per share amounts) June 30, 2026 March 31, 2026 June 30, 2025
SELECTED FINANCIAL CONDITION DATA:
Total assets $ 23,270,010 $ 14,556,336 $ 13,327,847
Loans receivable, net of allowance for loan credit losses 16,086,532 11,059,275 10,119,781
Deposits 17,760,073 11,155,916 10,232,442
Total stockholders' equity 2,411,080 1,669,368 1,643,680
SELECTED OPERATING DATA:
Net interest income 120,730 96,447 87,636
Provision for credit losses 4,002 2,738 3,039
Other income 10,598 6,748 11,733
Operating expenses 129,859 73,403 71,474
Net (loss) income (3,029) 20,506 19,085
Net (loss) income attributable to OceanFirst Financial Corp. (3,029) 20,506 19,046
Net (loss) income available to common stockholders (3,029) 20,506 16,200
Diluted earnings per share (2)
(0.04) 0.36 0.28
SELECTED FINANCIAL RATIOS:
Book value per common share at end of period (2)
24.50 28.98 28.64
Cash dividend per share (2)
0.20 0.20 0.20
Dividend payout ratio per common share (2)
NM* 55.56 % 71.43 %
Stockholders' equity to total assets 10.36 11.47 12.33
Return on average assets (3) (4) (5)
(0.07) 0.57 0.49
Return on average stockholders' equity (3) (4) (5)
(0.63) 4.95 3.86
Net interest rate spread (6)
2.55 2.44 2.37
Net interest margin (3) (7)
3.05 2.93 2.91
Operating expenses to average assets (3 (5)
3.01 2.05 2.16
Efficiency ratio (5) (8)
98.88 71.13 71.93
Loan-to-deposit ratio (9)
91.60 99.70 99.50
ASSET QUALITY:
Non-performing loans (10)
$ 108,241 $ 34,638 $ 33,511
Non-performing assets (10)
142,423 45,031 41,191
Allowance for loan credit losses as a percent of total loans receivable (9)
1.29 % 0.77 % 0.78 %
Allowance for loan credit losses as a percent of total non-performing loans (10)
193.75 248.60 236.54
Non-performing loans as a percent of total loans receivable (9) (10)
0.67 0.31 0.33
Non-performing assets as a percent of total assets (10)
0.61 0.31 0.31
(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) The number of shares outstanding and all common share-related calculations, including earnings per share, and book value per share, are calculated using both common stock and NVCE Stock, which are participating securities. All NVCE shares presented in this document are reported on an as-converted common stock equivalent basis.
(3) Ratios are annualized.
(4) Ratios are based on net income available to common stockholders.
(5) Performance ratios for the three months ended June 30, 2026 included a net expense related to a net loss on equity investments, restructuring release, and merger related expenses of $43.0 million, or $33.6 million, net of tax benefit. Performance ratios for the three months ended March 31, 2026 included a net expense related to a net loss on equity investments, restructuring charges, and merger related expenses of $4.6 million, or $3.8 million, net of tax benefit. Performance ratios for the three months ended June 30, 2025 included a loss on redemption of preferred stock of $1.8 million and a net gain on equity investments of $488,000, or $373,000, net of tax expense.
(6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(7) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(8) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.
(9) Total loans receivable excludes loans held-for-sale.
(10) Non-performing assets consist of non-performing loans, real estate acquired through foreclosure, and a non-performing investment acquired from Flushing. Non-performing loans and assets generally consist of all loans and investments 90 days or more past due and other loans in the process of foreclosure. It is the Company's policy to cease accruing interest on all such loans and investments and to reverse previously accrued interest.
*NM - Not meaningful.
Summary
OceanFirst Financial Corp. is the holding company for OceanFirst Bank, National Association (the "Bank"), a regional bank serving business and retail customers throughout New Jersey, New York, Long Island, and the major metropolitan areas from Massachusetts through Virginia. The term "Company" refers to OceanFirst Financial Corp., the Bank and all their subsidiaries on a consolidated basis. The Company's results of operations are primarily dependent on net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and the interest expense on its interest-bearing liabilities, such as deposits and borrowings. The Company also generates non-interest income such as income from bankcard services, trust and asset management products and services, deposit account services, sales of loans and investments, bank owned life insurance and commercial loan swap income. The Company's operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses. The Company's results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies, and trade restrictions, including the imposition of tariffs and retaliatory responses, and actions of regulatory agencies.
Key developments relating to the Company's financial results and corporate activities for the three months ended June 30, 2026, as compared to the linked quarter, were as follows:
•Organic Growth: The Company generated continued organic growth across its legacy portfolio, with commercial loans increasing $154 million, or 2%, non-interest bearing deposits increasing $101 million, or 6%, and $150 million of deposit growth from Premier Banking teams, reflecting the Company's focus on core relationships. These results underscore the continued strength of the core growth initiatives, which the Flushing franchise will further bolster.
•Net Interest Margin Expansion: Net interest margin increased 12 basis points to 3.05% from 2.93%, and net interest income increased by $24.3 million to $120.7 million.
•Flushing Acquisition: On June 1, 2026, the Company completed its acquisition of Flushing Financial Corporation, the holding company of Flushing Bank. Flushing added $8.69 billion to total assets, $6.19 billion to loans and loans held-for-sale, and $7.44 billion to deposits. Flushing added 30 retail branches across New York City and Long Island.
•Balance Sheet Repositioning: The Company sold $1.31 billion of multifamily loans from the Flushing acquisition at a price of 92.25% and invested the $1.20 billion of net proceeds into highly-liquid, investment grade securities. The repositioning reduces commercial real estate concentration by approximately 50 percentage points to 381%1, while increasing liquidity as indicated by on-hand liquidity2 increasing to 11.5% of assets and the loan-to-deposit ratio falling to 91.60%. Additionally, the allowance for credit losses increased to 1.29% of total loans receivable.
•Operating Expenses: The Company anticipates full integration of Flushing's operations and systems in the third quarter of 2026. The resulting operating synergies are expected to improve efficiency and reduce operating expenses in future periods.
On June 1, 2026, the Company completed its acquisition of Flushing and its results of operations from June 1, 2026 through June 30, 2026 are included in the consolidated results for the three and six months ended June 30, 2026, but are not included in the results of operations for the corresponding prior year periods.
Net loss for the three months ended June 30, 2026 was $3.0 million, or $0.04 per diluted share, while net income available to common stockholders for the six months ended June 30, 2026 was $17.5 million, or $0.27 per diluted share, as compared to net income available to common stockholders of $16.2 million and $36.7 million, or $0.28 and $0.63 per diluted share, for the corresponding prior year periods, respectively. Dividends paid to preferred stockholders were $1.0 million and $2.0 million for the three and six months ended June 30, 2025. No such dividends were paid during the three and six months ended June 30, 2026 as the preferred stock was redeemed in the second quarter of 2025.
During the quarter ended June 30, 2025, the Company redeemed all of its preferred stock for an aggregate payment of $57.4 million, at a redemption price of $25.00 per share, which resulted in a net loss on redemption of $1.8 million for the prior year periods.
1 Reflects the bank-level regulatory CRE concentration ratio, calculated as regulatory commercial real estate divided by Tier 1 capital plus the ACL.
2 On-hand liquidity equals cash, unpledged securities and funding capacity at the FHLB and Federal Reserve Bank Discount Window.
On July 30, 2026, the Company's Board declared a quarterly cash dividend on common stock of $0.20 per share. The dividend, related to the quarter ended June 30, 2026, will be paid on August 21, 2026 to common stockholders of record on August 10, 2026.
Recent Developments
Acquisition of Flushing Financial Corporation
On June 1, 2026, the Company completed its acquisition of Flushing, pursuant to which Apollo Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of the Company ("Merger Sub"), merged with and into Flushing (the "First-Step Merger"), with Flushing continuing as the surviving entity. Immediately following the First-Step Merger, Flushing merged with and into the Company, with the Company continuing as the surviving corporation (the "Second-Step Merger" and together with the First-Step Merger, the "Merger"). On the day immediately following the closing date of June 1, 2026, Flushing Bank, a New York-chartered non-member bank and, prior to the Second-Step Merger, a wholly-owned subsidiary of Flushing merged with and into the Bank, with the Bank continuing as the surviving bank.
Each share of common stock, par value $0.01 per share, of Flushing issued and outstanding immediately prior to the completion of the Merger, was converted into the right to receive 0.85 of a share of common stock, par value $0.01 per share, of the Company. Holders of Flushing common stock also became entitled to receive cash in lieu of fractional shares of the Company's common stock.
Concurrent with the completion of the Merger, the Company raised $225 million of equity from affiliates of funds managed by Warburg Pincus, in which the Company issued and sold to Warburg Pincus 9.6 million shares of Company's common stock, at $19.76 per share, 1,812 shares of a new class of NVCE Stock representing the economic equivalent of approximately 1.8 million shares of Company's common stock, at $19,760 per share of NVCE Stock and issued to Warburg Pincus a warrant to purchase approximately 11.4 million shares of NVCE Stock with an exercise price of $19,760 per share of NVCE Stock.
The NVCE Stock was issued as a series of preferred stock, in accordance with the Investment Agreement dated December 29, 2025. The NVCE Stock is not listed or traded on any national securities exchange or automated quotation system, and there currently is no established trading market for such stock. The NVCE Stock does not have voting rights and ranks equally with, and has identical rights, preferences and privileges as the voting common stock with respect to dividends or distributions (including regular quarterly dividends) declared by the Board and rights upon any liquidation, dissolution, winding up or similar proceeding of the Company.
The warrant carries a term of seven years and can be exercised voluntarily following the third anniversary of the investment. The warrant can also be voluntarily exercised prior to the third anniversary of the investment, in the event the market price of the Company's common stock reaches or exceeds $30 per share at the closing of any trading day or in connection with certain change of control transactions involving the Company. The warrant is subject to mandatory exercise, at any time, in the event the market price of Company's common stock reaches or exceeds $30 per share for a certain number of trading days over a specified period. In the event of a change of control transaction where less than 90% of the consideration in such transaction is comprised of equity securities traded on the NASDAQ or NYSE, Warburg Pincus will be entitled to receive additional shares if it exercises the warrant in connection with such transaction.
The Company completed the acquisition to, among other things, expand the Company's presence within the highly attractive, deposit-rich New York markets of Suffolk, Nassau, Queens, Brooklyn, and Manhattan counties.
For further information, see Note 2. Business Combination.
Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the three and six months ended June 30, 2026, interest income included net loan fees of $1.2 million and $2.3 million, respectively, as compared to $1.2 million and $2.6 million for the same prior year period.
The following tables set forth certain information relating to the Company for the three and six months ended June 30, 2026 and 2025. The yields and costs, which are annualized, are derived by dividing the income or expense by the average balance of the related assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances. The yields and costs include certain fees and costs which are considered adjustments to yields.
For the Three Months Ended June 30,
2026 2025
(dollars in thousands) 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 $ 158,816 $ 1,375 3.47 % $ 111,631 $ 1,090 3.92 %
Securities (2)
2,789,029 29,247 4.21 1,917,114 18,257 3.82
Loans receivable, net (3)
Commercial 9,701,371 142,903 5.91 6,786,611 100,004 5.91
Residential real estate 3,145,110 33,135 4.21 3,091,227 31,861 4.12
Other consumer
188,131 2,944 6.28 225,311 3,613 6.43
Allowance for loan credit losses, net of deferred loan costs and fees (104,773) - - (66,364) - -
Loans receivable, net 12,929,839 178,982 5.55 10,036,785 135,478 5.41
Total interest-earning assets 15,877,684 209,604 5.29 12,065,530 154,825 5.14
Non-interest-earning assets 1,399,341 1,182,543
Total assets $ 17,277,025 $ 13,248,073
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking $ 5,107,262 28,186 2.21 % $ 3,990,602 20,605 2.07 %
Money market 2,120,250 14,128 2.67 1,342,194 9,718 2.90
Savings 1,003,045 1,284 0.51 1,029,490 1,680 0.65
Time deposits 2,990,624 24,710 3.31 2,175,564 20,270 3.74
Total 11,221,181 68,308 2.44 8,537,850 52,273 2.46
FHLB advances
1,312,502 13,169 4.02 880,746 9,933 4.52
Securities sold under agreements to repurchase 60,009 399 2.67 60,477 419 2.78
Other borrowings 397,793 6,998 7.06 260,655 4,564 7.02
Total borrowings 1,770,304 20,566 4.66 1,201,878 14,916 4.98
Total interest-bearing liabilities 12,991,485 88,874 2.74 9,739,728 67,189 2.77
Non-interest-bearing deposits 2,107,561 1,639,045
Non-interest-bearing liabilities 247,077 186,653
Total liabilities 15,346,123 11,565,426
Stockholders' equity 1,930,902 1,682,647
Total liabilities and stockholders' equity $ 17,277,025 $ 13,248,073
Net interest income $ 120,730 $ 87,636
Net interest rate spread (4)
2.55 % 2.37 %
Net interest margin (5)
3.05 % 2.91 %
Total cost of deposits (including non-interest-bearing deposits) 2.06 % 2.06 %
For the Six Months Ended June 30,
2026 2025
(dollars in thousands) 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 $ 121,135 $ 2,037 3.39 % $ 106,230 $ 2,073 3.94 %
Securities (2)
2,537,245 51,552 4.10 1,959,922 37,958 3.91
Loans receivable, net (3)
Commercial 8,699,979 252,000 5.84 6,783,823 198,265 5.89
Residential real estate 3,156,125 66,276 4.20 3,078,524 63,131 4.10
Other consumer 193,693 6,030 6.28 226,923 7,101 6.31
Allowance for loan credit losses, net of deferred loan costs and fees (83,445) - - (64,121) - -
Loans receivable, net 11,966,352 324,306 5.46 10,025,149 268,497 5.39
Total interest-earning assets 14,624,732 377,895 5.20 12,091,301 308,528 5.14
Non-interest-earning assets 1,296,661 1,188,506
Total assets $ 15,921,393 $ 13,279,807
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking $ 4,810,202 51,006 2.14 % $ 4,062,502 42,039 2.09 %
Money market 1,798,408 22,936 2.57 1,332,154 19,070 2.89
Savings 996,043 2,589 0.52 1,043,674 3,465 0.67
Time deposits 2,683,430 45,472 3.42 2,046,927 38,745 3.82
Total 10,288,083 122,003 2.39 8,485,257 103,319 2.46
FHLB Advances 1,287,383 26,053 4.08 938,200 21,293 4.58
Securities sold under agreements to repurchase 59,908 783 2.64 62,385 846 2.73
Other borrowings 349,126 11,879 6.86 271,840 8,782 6.51
Total borrowings 1,696,417 38,715 4.60 1,272,425 30,921 4.90
Total interest-bearing liabilities 11,984,500 160,718 2.70 9,757,682 134,240 2.77
Non-interest-bearing deposits 1,920,713 1,618,622
Non-interest-bearing liabilities 210,791 204,702
Total liabilities 14,116,004 11,581,006
Stockholders' equity 1,805,389 1,698,801
Total liabilities and stockholders' equity $ 15,921,393 $ 13,279,807
Net interest income $ 217,177 $ 174,288
Net interest rate spread (4)
2.50 % 2.37 %
Net interest margin (5)
2.99 % 2.91 %
Total cost of deposits (including non-interest-bearing deposits) 2.02 % 2.06 %
(1)Average yields and costs are annualized.
(2)Amounts represent debt and equity securities, including FHLB and FRB 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.
Comparison of Financial Condition3 at June 30, 2026 and December 31, 2025
Total assets increased by $8.71 billion to $23.27 billion, due to the acquisition of Flushing which added $8.69 billion to total assets. Total loans increased by $5.24 billion to $16.28 billion, from $11.03 billion, primarily due to Flushing totaling $6.19 billion partly offset by $1.31 billion of multifamily loans sold during the quarter for a price of $1.20 billion, net of costs to sell. Debt securities held-to-maturity and available-for-sale increased by $2.82 billion, primarily due to the acquisition of Flushing totaling $1.54 billion and the reinvestment of proceeds from the loan sales into securities. Bank owned life insurance increased by $233.6 million to $503.9 million, from $270.3 million driven by the acquisition of Flushing. As part of the acquisition of Flushing, the Company's goodwill balance increased to $529.8 million, from $517.5 million and intangibles increased to $90.6 million, from $9.0 million.
Other assets increased by $217.7 million to $367.0 million, from $149.3 million primarily due to revaluation of deferred tax assets as a result of the acquisition of Flushing and increase in market values of derivatives associated with customer interest rate swaps.
Total liabilities increased by $7.96 billion to $20.86 billion, from $12.90 billion primarily due to the acquisition of Flushing, which added $8.16 billion. Deposits increased by $6.80 billion to $17.76 billion, from $10.96 billion, primarily due to acquired deposits from Flushing totaling $7.44 billion. Excluding Flushing, the decrease in deposits was primarily attributable to a decrease in government deposits due to seasonality. Time deposits increased by $1.74 billion to $4.21 billion, from $2.47 billion, representing 23.7% and 22.5% of total deposits, respectively. Time deposits included an increase in retail time deposits of $1.41 billion and brokered time deposits of $276.0 million. FHLB advances increased by $335.2 million to $1.73 billion, from $1.40 billion, partly due to Flushing and additional borrowing needs. Other borrowings increased by $238.0 million to $493.2 million, from $255.2 million driven by the addition of subordinated debt and trust preferred securities from the acquisition of Flushing. The loan-to-deposit ratio was 91.6%, as compared to 100.6%.
Other liabilities increased by $489.8 million to $699.1 million, from $209.3 million, mostly related to $337.0 million of unsettled security purchases and increases in market values of derivatives associated with customer interest rate swaps.
Capital levels remain strong and in excess of "well-capitalized" regulatory levels at June 30, 2026, including the Company's common equity tier one capital ratio of 10.72%.
Total stockholders' equity increased to $2.41 billion, as compared to $1.66 billion, primarily due to the acquisition of Flushing which added $535.6 million to stockholders' equity. The current period also included a $225 million strategic investment from affiliates of funds managed by Warburg Pincus, in exchange for approximately 9.6 million shares of common stock, 1.8 million shares of NVCE Stock, and warrants to purchase 11.4 million shares of NVCE Stock. Additionally, accumulated other comprehensive loss increased by $1.2 million primarily due to decreases in the fair market value of available-for-sale debt securities and derivative hedges, net of tax.
During the six months ended June 30, 2026, the Company repurchased 376,277 shares totaling $7.1 million representing a weighted average cost of $18.70, for repurchases of exercised options and vesting of awards from employees outside of the authorized share repurchase program. On June 1, 2026 the Company donated 273,973 shares totaling $5.0 million to the OceanFirst Foundation, which was funded through treasury stock. As of June 30, 2026, the Company had 3,226,284 shares available for repurchase under the authorized repurchase programs.
The Company's stockholders' equity to assets ratio was 10.36%, as compared to 11.42% and book value per share decreased to $24.50, as compared to $28.97.
Comparison of Operating Results for the Three and Six Months Ended June 30, 2026 and June 30, 2025
General
For the three months ended June 30, 2026, net loss was $3.0 million, or $0.04 per diluted share, as compared to net income available to common stockholders of $16.2 million, or $0.28 per diluted share, for the corresponding prior year period. For the six months ended June 30, 2026, net income available to common stockholders was $17.5 million, or $0.27 per diluted share, as compared to $36.7 million, or $0.63 per diluted share, for the corresponding prior year period. Net loss/income for the three and six months ended June 30, 2026 included merger-related expenses of $42.8 million and $46.9 million, respectively, a net loss of $347,000 and $701,000 on equity investments, and restructuring release of $71,000 and restructuring charge of $57,000, respectively. These items decreased net income by $33.6 million and $37.4 million, net of tax.
3 Flushing amounts refer to estimated fair values as of the June 1, 2026 acquisition date, unless otherwise noted.
Net income available to common stockholders for the three and six months ended June 30, 2025 included net gains on equity investments of $488,000 and $693,000, respectively, which increased net income by $373,000 and $529,000, net of tax. Additionally, net income available to common stockholders for the three and six months ended June 30, 2025 included a net loss on redemption of preferred stock of $1.8 million.
Interest Income
Interest income for the three and six months ended June 30, 2026 increased to $209.6 million and $377.9 million, respectively, from $154.8 million and $308.5 million. The average balance of interest-earning assets increased by $3.81 billion and $2.53 billion, driven by $2.50 billion and $1.26 billion of average interest-earning assets acquired from Flushing and increases in commercial loans and securities. The average yield for interest-earning assets increased to 5.29% and 5.20%, from 5.14% for both prior periods, primarily due to the repricing of assets and new originations, and the addition of loans acquired from Flushing at higher yields.
Interest Expense
Three months ended June 30, 2026 vs. June 30, 2025
Interest expense increased to $88.9 million from $67.2 million. The average balance of interest-bearing liabilities increased by $3.25 billion, driven by liabilities assumed from Flushing, and the remainder attributable to increases in deposits and FHLB advances. The cost of average interest-bearing liabilities decreased to 2.74% from 2.77%, primarily due to repricing of deposits and, to a lesser extent, FHLB advances, partially offset by the addition of deposits acquired from Flushing at higher rates. The total cost of deposits was 2.06% for both periods.
Six months ended June 30, 2026 vs. June 30, 2025
Interest expense increased to $160.7 million from $134.2 million. The average balance of interest-bearing liabilities increased by $2.23 billion, driven by the acquisition of Flushing, with the remaining increases related to deposits and FHLB advances. The cost of average interest-bearing liabilities decreased to 2.70% from 2.77%, primarily due to repricing of deposits and FHLB advances, partially offset by the addition of deposits acquired from Flushing at higher rates. The total cost of deposits decreased four basis points to 2.02% from 2.06%.
Net Interest Income and Margin
Net interest income for the three and six months ended June 30, 2026 increased to $120.7 million and $217.2 million, respectively, from $87.6 million and $174.3 million, reflecting the net impact of the interest rate environment and the acquisition of Flushing. Net interest margin increased to 3.05% and 2.99%, from 2.91% for both prior periods.
Provision for Credit Losses
Provision for credit losses for the three and six months ended June 30, 2026 was $4.0 million and $6.7 million, respectively, as compared to $3.0 million and $8.4 million. The current quarter provision was primarily driven by a reserve build of $2.5 million and replenishment of net charge-offs of $1.5 million.
Net loan charge-offs were $1.5 million and $2.2 million for the three and six months ended June 30, 2026, as compared to $2.2 million and $2.9 million for the corresponding prior year periods. Net loan charge-offs to average total loans were 0.05% and 0.04% for the three and six months ended June 30, 2026, as compared to 0.09% and 0.06% for the corresponding prior year periods.
Non-interest Income
Three months ended June 30, 2026 vs. June 30, 2025
Other income decreased to $10.6 million, as compared to $11.7 million. Other income was adversely impacted by net losses on equity investments of $347,000 in the current quarter. For the prior year period, other income was favorably impacted by net gains on equity investments of $488,000 and $1.4 million of other income from Flushing acquisition.
Furthermore, there was also a decrease in fees and service charges of $1.8 million and a decrease in net gain on sale of loans of $1.2 million due to the discontinuation of residential loan originations, including the disposition of the title business at the beginning of the fourth quarter last year. In addition, the prior period included non-recurring other income of $1.1 million. This was partly offset by increases in net gain on other real estate operations of $1.5 million and commercial loan swap income of $1.4 million.
Six months ended June 30, 2026 vs. June 30, 2025
Other income decreased to $17.3 million, as compared to $23.0 million. Other income was adversely impacted by net losses on equity investments of $701,000 in the current period. For the prior year period, other income was favorably impacted by net gains on equity investments of $693,000 and $1.4 million of other income from Flushing acquisition.
Furthermore, there was a decrease in fees and service charges of $3.6 million and a decrease in a net gain on sale of loans of $2.1 million due to the same drivers as noted above. In addition, the prior period included non-recurring other income of $1.9 million. This was partly offset by increases in net gain on other real estate operations of $1.3 million and commercial loan swap income of $1.1 million.
Non-interest Expense
Three months ended June 30, 2026 vs. June 30, 2025
Operating expenses increased to $129.9 million, as compared to $71.5 million. Operating expenses in the current quarter were adversely impacted by merger-related expenses of $42.8 million. The remaining increase of $15.7 million was primarily due to $14.8 million of operating expenses recognized in June from the acquisition of Flushing. The further remaining increase in operating expenses of $877,000 was driven by an increase in compensation and benefits of $2.5 million, mostly due to commercial banking hires adjusted for annual inflationary increases, partly offset by the impact of the residential outsourcing initiative. Additional drivers were decreases in professional fees of $1.3 million, mostly due to recruitment fees for the Company's commercial banking hires in the prior year.
Six months ended June 30, 2026 vs. June 30, 2025
Operating expenses increased to $203.3 million, as compared to $135.8 million. Operating expenses in the current period were adversely impacted by merger-related expenses of $46.9 million. The remaining increase of $20.5 million was primarily due to the acquisition of Flushing, as noted above. The further remaining increase of $5.7 million was driven by an increase in compensation and benefits of $5.3 million, mostly due to commercial banking hires adjusted for annual inflationary increases, partly offset by the impact of the residential outsourcing initiative.
Income Tax Expense
The provision for income taxes was $496,000 and $7.0 million for the three and six months ended June 30, 2026, as compared to $5.8 million and $12.6 million for the same prior year periods. The effective tax rate was (19.6)% and 28.7% for the three and six months ended June 30, 2026, as compared to 23.2% and 23.7% for the same prior year period. The effective tax rate for the three and six months ended June 30, 2026 was adversely impacted by non-deductible merger related expenses, which were offset by a one-time revaluation of deferred taxes as a result of the Flushing acquisition. Excluding the impact of these adjustments, the effective tax rate would have been 28.1% and increased as a result of the new tax profile due to the acquisition of Flushing.
Liquidity and Capital Resources
Liquidity Management
The Company manages its liquidity and funding needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses liquidity and management monitors the adherence to policy limits to satisfy current and future cash flow needs. The policy includes internal limits, monitoring of key indicators, deposit concentrations, liquidity sources and availability, stress testing, collateral management, and other qualitative and quantitative metrics.
Management monitors cash on a daily basis to determine the liquidity needs of the Bank and OceanFirst Financial Corp. (the "Parent Company"), a separate legal entity from the Bank. Additionally, management performs multiple liquidity stress test scenarios on a periodic basis. As of June 30, 2026, the Bank and the Parent Company continued to maintain adequate liquidity under all stress scenarios. The Company also has a detailed contingency funding plan and obtains comprehensive reporting of funding trends on a monthly and quarterly basis, which are reviewed by management.
The Company continually evaluates its on-balance sheet liquidity, including cash and unpledged securities and funding capacity at the FHLB and FRB Discount Window, and periodically tests each of its lines of credit. As of June 30, 2026, total on-balance sheet liquidity and funding capacity was $8.4 billion.
The Bank has a highly operational and granular deposit base, with long-standing client relationships across multiple customer segments providing stable funding. The vast majority of government deposits are protected by FDIC insurance as well as the State of New Jersey under the Government Unit Deposit Protection Act, which requires uninsured government deposits to be further collateralized by the Bank. At June 30, 2026, the Bank reported $9.31 billion of estimated uninsured deposits in its Call Report. This total included $3.69 billion of collateralized government deposits and $2.24 billion of intercompany deposits of fully consolidated subsidiaries, leaving estimated adjusted uninsured deposits of $3.38 billion, or 18.8% of total deposits. On-balance-sheet liquidity and funding capacity represented 249% of the estimated adjusted uninsured deposits.
The primary sources of liquidity specifically available to the Parent Company are dividends from the Bank, proceeds from the sale of investments, and the issuance of debt and common stock. For the six months ended June 30, 2026, the Parent Company received $28.0 million dividend payments from the Bank. At June 30, 2026, the Parent Company held $99.8 million in cash and cash equivalents.
Concurrent with the merger, the Company completed a $225 million equity raise from affiliates of funds managed by Warburg Pincus. These funds, net of expenses, were used to consummate the merger and invest in highly-liquid, investment grade securities.
Upon completion of the acquisition, the Company subsequently sold $1.31 billion of acquired multifamily loans at a price of 92.25% and re-invested the $1.20 billion of net proceeds into highly-liquid, investment grade securities. The repositioning reduced commercial real estate concentration to 381%1, while increasing liquidity as indicated by on-hand liquidity2 increasing to 11.5% of assets at June 30, 2026, from 5.3% at December 31, 2025.
The Bank's primary sources of funds are deposits, principal and interest payments on loans and investments, FHLB advances, other borrowings and proceeds from the sale of loans and investments. While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment sales are greatly influenced by interest rates, economic conditions, and competition. The Bank has other sources of liquidity if a need for additional funds arises, including lines of credit at multiple financial institutions and access to the FRB Discount Window.
As of June 30, 2026, the Bank pledged $11.84 billion of loans with the FHLB and FRB to enhance the Company's borrowing capacity, which included collateral pledged to the FHLB to obtain a letter of credit to collateralize certain municipal deposits. The Bank also pledged $1.87 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law. The Company had $1.73 billion of FHLB advances, including $1.09 billion of outstanding FHLB term advances and $647.0 million of overnight borrowings as of June 30, 2026, as compared to $929.2 million of FHLB term advances and $468.0 million of overnight borrowings at December 31, 2025.
The Company's cash needs for the six months ended June 30, 2026 were primarily satisfied by proceeds from sale of loans, the net proceeds from equity raise, FHLB advances, and primarily utilized for securities and loan growth.
Off-Balance Sheet Commitments and Contractual Obligations
In the normal course of business, the Bank routinely enters into various off-balance sheet commitments, primarily relating to the origination and funding of loans. At June 30, 2026, outstanding commitments to originate loans totaled $409.4 million and outstanding undrawn lines of credit totaled $2.18 billion, of which $1.94 billion were commitments to commercial and commercial construction borrowers and $241.9 million were commitments to consumer and residential construction borrowers. Commitments to fund undrawn lines of credit and commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the existing contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company's exposure to credit risk is represented by the contractual amount of the instruments.
At June 30, 2026, the Company also had various contractual obligations, which included debt obligations of $2.29 billion, including finance lease obligations of $1.0 million, and an additional $71.1 million in operating lease obligations included in other liabilities. The Company expects to have sufficient funds available to meet current commitments in the normal course of business.
Time deposits scheduled to mature in one year or less totaled $4.01 billion at June 30, 2026. If these deposits do not remain with the Company, it may need to seek other sources of funds, including other deposit products, advances from the Federal Home Loan Bank of New York and other borrowing sources. Depending on market conditions, the Company may be required to pay higher rates on such deposits or borrowings than it currently pays.
Liquidity Used in Stock Repurchases and Cash Dividends
Under the Company's stock repurchase program, shares of its common stock may be purchased in the open market and through privately-negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate purposes. For the three and six months ended June 30, 2026, the Company repurchased 198,827 and 376,277 shares of its common stock, totaling $3.7 million and $7.1 million, which represented shares in connection with the exercise of options and vesting of awards from employees to satisfy tax withholding obligations outside of the authorized share repurchase program. At June 30, 2026, there were 3,226,284 shares available to be repurchased under the authorized stock repurchase program.
Cash dividends on common stock declared and paid during the six months ended June 30, 2026 were $23.0 million.
The Parent Company's ability to continue to repurchase shares of common stock and pay dividends depends on capital distributions from the Bank, which may be adversely affected by capital restraints imposed by applicable regulations. If applicable regulations or regulators prevent the Bank from paying a dividend to the Parent Company, the Parent Company may not have the liquidity necessary to repurchase shares of common stock or pay a dividend in the future or pay a dividend at the same rate as historically paid or be able to meet current debt obligations. Additionally, regulations of the Federal Reserve may prevent the Parent Company from either paying or increasing the cash dividend to common stockholders. These regulatory policies may affect the ability of the Parent Company to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.
Capital Management
The Company manages its capital sources, uses, and expected future needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses capital and management monitors the adherence to policy limits to satisfy current and future capital needs. The policy includes internal limits, monitoring of key indicators, sources and availability, intercompany transactions, forecasts and stress testing, and other qualitative and quantitative metrics.
Management performs multiple capital stress test scenarios on a quarterly basis, varying loan growth, earnings, access to the capital markets, credit losses, and mark-to-market losses in the investment portfolio, including both AFS and HTM. As of June 30, 2026, the Bank and Company continued to maintain adequate capital under all stress scenarios. The Bank and the Parent Company also have detailed contingency capital plans and obtain comprehensive reporting of capital trends on a regular basis, which are reviewed by management and the Board.
The following represents capital actions taken in conjunction with the Company's acquisition of Flushing. On June 1, 2026, the Company raised $225 million in equity from affiliates of funds managed by Warburg Pincus, in exchange for approximately 9.6 million shares of common stock, 1.8 million shares of NVCE Stock, and warrants to purchase 11.4 million shares of NVCE Stock. Additionally, the Company donated 273,973 shares totaling $5.0 million to the OceanFirst Foundation, which was funded through treasury stock.
Regulatory Capital Requirements
As of June 30, 2026 and December 31, 2025, the Company and the Bank satisfied all regulatory capital requirements currently applicable as follows (dollars in thousands):
Actual For capital adequacy
purposes 		To be well-capitalized
under prompt
corrective action
As of June 30, 2026 Amount Ratio Amount Ratio Amount Ratio
Company:
Tier 1 capital (to average assets) $ 1,792,854 10.76 % $ 666,777 4.00 % N/A N/A
Common equity Tier 1 (to risk-weighted assets)
1,738,896 10.72 1,135,459 7.00
(1)
N/A N/A
Tier 1 capital (to risk-weighted assets) 1,792,854 11.05 1,378,772 8.50
(1)
N/A N/A
Total capital (to risk-weighted assets) 2,438,567 15.03 1,703,189 10.50
(1)
N/A N/A
Bank:
Tier 1 capital (to average assets) $ 2,082,101 12.56 % $ 663,080 4.00 % $ 828,851 5.00 %
Common equity Tier 1 (to risk-weighted assets)
2,082,101 12.90 1,129,446 7.00
(1)
1,048,771 6.50
Tier 1 capital (to risk-weighted assets) 2,082,101 12.90 1,371,470 8.50
(1)
1,290,796 8.00
Total capital (to risk-weighted assets) 2,235,596 13.86 1,694,169 10.50
(1)
1,613,495 10.00
As of December 31, 2025
Company:
Tier 1 capital (to average assets) $ 1,193,942 8.65 % $ 551,966 4.00 % N/A N/A
Common equity Tier 1 (to risk-weighted assets)
1,119,172 10.72 730,982 7.00
(1)
N/A N/A
Tier 1 capital (to risk-weighted assets) 1,193,942 11.43 887,621 8.50
(1)
N/A N/A
Total capital (to risk-weighted assets) 1,467,329 14.05 1,096,473 10.50
(1)
N/A N/A
Bank:
Tier 1 capital (to average assets) $ 1,194,054 8.71 % $ 548,260 4.00 % $ 685,326 5.00 %
Common equity Tier 1 (to risk-weighted assets)
1,194,054 11.54 724,359 7.00
(1)
672,619 6.50
Tier 1 capital (to risk-weighted assets) 1,194,054 11.54 879,578 8.50
(1)
827,839 8.00
Total capital (to risk-weighted assets) 1,282,441 12.39 1,086,538 10.50
(1)
1,034,798 10.00
(1)Includes the Capital Conservation Buffer of 2.50%.
At June 30, 2026 and December 31, 2025, the Company and the Bank satisfied the criteria to be "well-capitalized" under the Prompt Corrective Action regulations.
At June 30, 2026 and December 31, 2025, the Company maintained a stockholders' equity to total assets ratio of 10.36% and 11.42%, respectively.
Lending Activities
Loan Portfolio Composition. At June 30, 2026, the Company had total loans outstanding of $16.28 billion, of which $9.13 billion, or 56.1% of total loans, were investor owned commercial real estate, multi-family, and construction (including residential development loans), collectively, "commercial real estate - investor". The remainder of the portfolio consisted of commercial and industrial loans, of which $1.80 billion were commercial and industrial - real estate, or 11.1% of total loans; and $1.91 billion were commercial and industrial - non-real estate loans, or 11.7% of total loans; $3.25 billion of residential real estate loans, or 19.9% of total loans; and $196.9 million of other consumer loans, primarily home equity loans and lines of credit, or 1.2% of total loans. On June 1, 2026 the Company acquired Flushing, which added $6.19 billion to total loans at acquisition, and subsequently sold $1.31 billion of multifamily loans obtained through the merger.
Commercial Real Estate - Investor Owned. At June 30, 2026, the Bank's total investor owned commercial real estate loans outstanding were $9.13 billion, or 56.1% of total loans, as compared to $5.42 billion, or 49.1% of total loans at December 31, 2025. The Bank originates investor owned commercial real estate loans that are secured by properties, or properties under construction, that are generally used for business purposes such as office, industrial, multi-family, or retail facilities. A substantial majority of the Bank's investor owned commercial real estate loans are located in its primary market area.
The Bank performs extensive due diligence in underwriting commercial real estate loans due to the larger loan amounts and the riskier nature of such loans. The Bank assesses and mitigates the risk in several ways, including inspection of all such properties and the review of the overall financial condition of the borrower and guarantors, which include, for example, the review of the rent rolls and applicable leases/lease terms and conditions and the verification of income. A tenant analysis and market analysis are part of the underwriting.
Investor owned commercial real estate loans are among the largest of the Bank's loans and may have higher credit risk and lending spreads. Because repayment is often dependent on the successful management of the properties, repayment of commercial real estate loans may be affected by adverse conditions in the real estate market or the economy, and as a result, the Bank is particularly vigilant of this portfolio. The Bank believes this portfolio is highly diversified with loans secured by a variety of property types and the portfolio exhibits stable credit quality.
The acquired loans from Flushing were re-risked at the date of acquisition based on the Company's credit standards, which has increased the loans classified as special mention and substandard for a period of time until these loans are integrated and conform to the Company's credit standards.
The following table presents the Company's commercial real estate - investor owned loans by industry as of June 30, 2026:
As of June 30, 2026
(dollars in thousands) Amount Percent of Total
Weighted Average LTV (1)
Weighted Average Debt Service Coverage Ratio (2)
Office $ 650,746 8 % 51 % 1.9x
Medical 369,060 4 54 1.7
Credit Tenant 276,107 3 63 1.4
Total Office 1,295,913 15 54 1.7
Retail 1,915,399 23 57 1.9
Multi-family
1,506,096 18 59 1.5
Industrial/warehouse 975,470 11 50 2.0
Hospitality 234,262 3 46 1.7
Other (3)
2,534,243 30 41 1.7
Total 8,461,383 100 % 51 1.7
Construction 663,930
Total CRE - investor
$ 9,125,313
(1) Represents the weighted average of loan balances as of June 30, 2026 divided by their most recent appraisal value, which is generally obtained at the time of origination.
(2) Represents the weighted average of net operating income on the property before debt service divided by the loan's respective annual debt service based on the most recent credit review of the borrower.
(3) Other includes co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.
The following table presents total commercial real estate - investor owned loans by geography (generally based on location of collateral) as of June 30, 2026:
As of June 30, 2026
(dollars in thousands) Amount Percent of Total
New York $ 4,752,549 56 %
Pennsylvania and Delaware 1,431,518 17
New Jersey 1,309,030 15
Maryland and District of Columbia 224,061 3
Massachusetts 196,968 2
Other 547,257 7
Total 8,461,383 100 %
Construction 663,930
Total CRE - investor $ 9,125,313
Asset quality. The following table sets forth information regarding the Company's non-performing assets, consisting of non-performing loans, investments, and other real estate acquired through foreclosure. It is the policy of the Company to cease accruing interest on loans and investments 90 days or more past due or in the process of foreclosure.
June 30, December 31,
2026 2025
(dollars in thousands)
Non-performing assets (1) (2):
Commercial real estate - investor
$ 76,721 $ 13,636
Commercial and industrial:
Commercial and industrial - real estate 16,980 4,813
Commercial and industrial - non-real estate 5,045 640
Total commercial and industrial 22,025 5,453
Residential real estate
7,043 6,200
Other consumer
2,452 2,502
Total non-performing loans 108,241 27,791
Other real estate owned 13,453 10,266
Non-performing investment (3)
20,729 -
Total non-performing assets $ 142,423 $ 38,057
Allowance for loan credit losses $ 209,716 $ 83,726
Allowance for unfunded commitments 4,194 4,028
PCD loans, net of allowance for loan credit losses
696,763 14,968
Delinquent loans 30-89 days 47,097 47,808
Allowance for loan credit losses as a percent of total loans receivable
1.29 % 0.76 %
Allowance for loan credit losses as a percent of total non-performing loans 193.75 301.27
Non-performing loans as a percent of total loans receivable 0.67 0.25
Non-performing assets as a percent of total assets 0.61 0.26
(1)Excludes loans held-for-sale.
(2)June 30, 2026 included loans acquired from the Flushing acquisition. Non-performing, delinquent 30 to 89 days, and PCD loans included $53.8 million, $18.2 million, and $750.4 million, respectively, of acquired loans from Flushing.
(3)Non-performing investment acquired from Flushing.
Overall asset quality metrics remained stable. Non-performing loans increased to $108.2 million, from $27.8 million, primarily due to $53.8 million of non-performing loans acquired from Flushing and one commercial relationship of $20.6 million. The Company's non-performing loans represented 0.67% and 0.25% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 193.75%, as compared to 301.27%. The level of 30 to 89 days delinquent loans decreased to $47.1 million, from $47.8 million, primarily due to the one commercial relationship noted above, partially offset by $18.2 million of 30 to 89 days delinquent loans acquired from Flushing.
The Company identified $750.4 million of PCD loans from the Flushing acquisition which consisted of both criticized and classified loans and a significant portion of loans with any New York City rent-regulated exposure. The Company's other real estate owned increased to $13.5 million from $10.3 million. The Company's allowance for loan credit losses to total loans was 1.29%, as compared to 0.76%. The increase in the allowance for credit losses was largely driven by incremental allowance for loan credit losses of $121 million added for the Flushing portfolio.
The Company classifies loans (other than loans held-for-sale), investments, and other real estate owned in accordance with regulatory guidelines. The table below represents Special Mention and Substandard loans (other than loans held-for-sale) and investment, and other real estate owned (in thousands):
June 30, December 31,
2026 2025
Special Mention $ 136,705 $ 18,161
Substandard 404,832 103,981
Total $ 541,537 $ 122,142
Special mention and substandard loans (other than loans held-for-sale), investment, and other real estate owned increased by $419.4 million to $541.5 million at June 30, 2026 from $122.1 million at December 31, 2025. The increase was primarily due to $293.2 million of loans and a $20.7 million investment acquired from Flushing, which were re-risked at the date of acquisition based on the Company's credit standards. The remaining increase was driven by three accruing commercial relationships totaling $106.3 million.
Critical Accounting Policies and Estimates
Note 1 to the Company's Audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), as supplemented by this report, contains a summary of significant accounting policies. Various elements of these accounting policies, by their nature, are subject to estimation techniques, valuation assumptions and other subjective assessments. Certain assets are carried on the consolidated statements of financial condition at estimated fair value or the lower of cost or estimated fair value.
Policies with respect to the methodology used to determine the allowance for credit losses is a critical accounting policy and estimate because of its importance to the presentation of the Company's financial condition and results of operations and high level of subjectivity. A critical accounting policy involves a higher degree of complexity and requires management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions, and estimates could result in material differences in the results of operations or financial condition. The critical accounting policy and its application is reviewed periodically, and at least annually, with the Audit Committee of the Board.
Goodwill in accordance with ASC 350, Intangibles - Goodwill and Other, was also a critical accounting estimate in the preparation of the consolidated financial statements at June 30, 2026 and December 31, 2025.
Significant negative industry or economic trends, including declines in the market price of the Company's stock, reduced estimates of future cash flows or business disruptions could result in impairments to goodwill in the future, which may result in recording an impairment loss. Any resulting impairment loss may have a material adverse impact on the Company's financial condition and results of operations and is considered a non-cash event with no impact to the Company's regulatory capital ratios, liquidity position, and ongoing operations.
Management continued to carefully assess and evaluate all available information for potential triggering events after the August 31 annual testing date, and concluded no triggering events were identified subsequent to the annual test date. Management will continue evaluating the economic conditions at future reporting periods for triggering events.
Impact of New Accounting Pronouncements
Accounting Pronouncements Adopted in 2026
None.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, FASB issued ASU 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)". The amendments in this ASU require expanded disclosure and disaggregation of certain costs and expenses including, but not limited to, purchases of inventory, employee compensation, depreciation, depletion, and amortization. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements.
In November 2024, FASB issued ASU 2024-04, "Debt - Debt with Conversion and Other Options (Subtopic 470-20)". The amendments in this ASU clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2025, and for interim periods beginning after December 15, 2026. Early adoption is permitted. Currently, this ASU does not have any impact to the consolidated financial statements.
In May 2025, FASB issued ASU 2025-03, "Business Combinations (Topic 805) and Consolidation (Topic 810)". The amendments in this ASU require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquired is a variable interest entity, to determine which entity is the accounting acquirer. The amendment requires that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements.
In September 2025, FASB issued ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)". The amendments in this ASU remove all references to prescriptive and sequential software development stages and provides disclosure requirements for related capitalized costs. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Currently, this ASU does not have any impact to the consolidated financial statements.
In September 2025, FASB issued ASU 2025-07, "Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)". The amendments in this ASU, related to Topic 815, exclude from derivative accounting any non-exchange traded contracts that are based on operations or activities specific to contracted parties, while providing specific exceptions to this exclusion. The amendments in this ASU, related to Topic 606, clarify that an entity should apply Topic 606 guidance to contracts with share-based noncash consideration from a customer in a revenue contract. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. Topic 606 is not applicable to the Company. The Company is currently evaluating the impact of the standard for Topic 815 on the consolidated financial statements.
In November 2025, FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements". The amendments in this ASU include new guidance on assessing similar risks for cash flow hedges, hedging interest payments on "choose-your-rate" debt, accounting for cash flow hedges of nonfinancial forecasted transactions, using net written options as hedging instruments, and the accounting for foreign currency-denominated debt in "dual hedges". This update will be effective for financial statements issued for fiscal years beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. Currently this ASU does not have an impact on the consolidated financial statements.
In May 2026, FASB issued ASU 2026-02, "Environmental Credits and Environmental Credit Obligations (Topic 818)". The amendments in this ASU establish a framework for the recognition, measurement, presentation, and disclosure of environmental credits and related compliance obligations. The ASU requires entities to recognize environmental credits as assets when certain criteria are met and introduces measurement requirements based on the intended use of the credits, as well as guidance for recognizing and measuring environmental credit obligations. The ASU also requires enhanced disclosures regarding the nature, use, and financial statement impacts of environmental credits and related obligations. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Earl,y adoption is permitted. The Company is currently evaluating the impact of the standard for Topic 818 on the consolidated financial statements.
Private Securities Litigation Reform Act Safe Harbor Statement
In addition to historical information, this quarterly report contains certain forward-looking statements within the meaning of the federal securities laws with respect to the transaction between OceanFirst and Flushing and the investment by affiliates of funds managed by Warburg Pincus in equity securities of OceanFirst. Forward-looking statements may be identified by the use of the words such as " estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "strategy," "future," "opportunity," "may," "could," "target," "should," "will," "would," "will be," "will continue," "will likely result," or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. These statements are based on various assumptions, whether or not identified in this document, and on the current expectations of the Company's management and are not predictions of actual performance, and, as a result, are subject to risks and uncertainties. These forward-looking statements are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict, may differ from assumptions and many are beyond the control of the Company. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, inflation, general economic conditions, including potential recessionary conditions, levels of unemployment in the Company's lending area, real estate market values in the Company's lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the imposition of tariffs or other domestic or international governmental policies, trade restrictions and retaliatory measures impacting our borrowers and the broader economy, the effects of a potential future federal government shutdown, debt ceiling impasses or fiscal uncertainty, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company's deposit portfolio and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company's market area, our ability to enter into new markets and capitalize on growth opportunities, the adequacy of and changes in the economic assumptions and methodology for computing the allowance for credit losses, availability of capital, competition, our ability to maintain and increase market share and control expenses, changes in investor sentiment and consumer spending, borrowing and savings habits, changes in accounting principles, risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in the Company's operational or security systems and infrastructure, including the risks arising from the Company's dependence on third-party service providers and vendors, the failure to maintain current technologies and the operational risks associated with the adoption of artificial intelligence and other emerging technologies, failure to retain or attract employees, the impact of pandemics on our operations and financial results and those of our customers and the Bank's ability to successfully integrate acquired operations.
You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of OceanFirst's Annual Report on Form 10-K for the year ended December 31, 2025, and other documents filed by OceanFirst from time to time with the U.S. Securities and Exchange Commission (the "SEC"). The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
OceanFirst Financial Corporation published this content on August 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 07, 2026 at 20:10 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]