OceanFirst Financial Corp.

Reported second quarter 2026 GAAP net loss was $0.04 per diluted share, driven by $0.47 per share, or $33.6 million, of non-recurring merger-related expenses net of taxes. Core EPS was $0.43, or $30.5 million, flat sequentially and up 39% year over year. Pre-tax, pre-provision core earnings were $44.5 million, up 29% from the prior quarter. Net interest income increased $24 million, or 25% sequentially, and $33 million, or 38% year over year; net interest margin expanded 12 bps to 3.05%. Total deposits were $17.8 billion, up $6.6 billion in the quarter mainly from Flushing, and loan originations totaled $642 million, up 50% sequentially. Core operating expense was $87 million, including about $15 million of one month of Flushing operations, while GAAP operating expenses were $130 million including $43 million of merger-related expenses. For the balance of 2026, management expects loans and deposits to grow 1% to 2% from June 30 levels by year-end, NIM to be 3.07%-3.12% in Q3 and 3.09%-3.14% in Q4, other income of $12 million to $16 million per quarter, and operating expenses to decline to $120 million-$125 million in Q3 and $110 million-$115 million in Q4 as cost savings begin to flow through.

Christopher Maher framed the quarter as a turning point because the Flushing transaction closed on June 1 and the combined franchise is already seeing competitive wins in talent and customer acquisition. He emphasized that management is still focused on organic growth, but now has a much larger New York footprint and better scale to deepen relationships. His tone was upbeat and confident, especially on integration, cost savings, and the view that the company is moving closer to peer profitability.

Patrick Barrett highlighted the operating leverage coming from the deal: net interest income growth of $24 million sequentially, margin expansion to 3.05%, and a strong capital position with estimated CET1 at 10.7% flat to last quarter. He noted that the allowance for credit losses rose to 1.29% of loans mainly from day 1 reserve builds, while net charge-offs were de minimis at 5 bps annualized. On the expense side, he pointed to $130 million GAAP operating expenses and $87 million core operating expenses, with the core run rate excluding Flushing at $72 million, and said expenses should step down through Q4 as cost saves are realized. He also said normalized tax rate is about 28% and should stay around that level near term.

Analysts pressed on the NIM outlook, deposit costs, and how much rate hikes or competitive pressure could offset the benefits of the Flushing transaction. Management said the balance sheet is now modestly liability sensitive, a 25 bps hike would be about a $5 million annual pre-tax revenue headwind, and pricing pressure is strongest in loans, especially from bank and non-bank competition. Questions also focused on credit quality after a $21 million CRE relationship went non-performing and two commercial relationships totaling $56 million were criticized; management said those credits are known, well-secured, and expected to resolve through upgrade or refinance, with no broader underlying credit deterioration. The group also asked about expense savings and capital allocation, and management said buybacks would be the top use of excess capital if organic growth opportunities do not absorb it, while M&A is not a current focus.