OCFC OceanFirst Financial Corporation

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 $23.4 million, or $0.40 per diluted share, for the three months ended June 30, 2024, a decrease from $26.8 million, or $0.45 per diluted share, for the corresponding prior year period, and $27.7 million, or $0.47 per diluted share, for the prior linked quarter. For the six months ended June 30, 2024, the Company reported net income available to common stockholders of $51.0 million, or $0.87 per diluted share, a decrease from $53.7 million, or $0.91 per diluted share, for the corresponding prior year period. Selected performance metrics are as follows (refer to “Selected Quarterly Financial Data” for additional information):

	For the Three Months Ended,									For the Six Months Ended,
Performance Ratios (Annualized):	June 30,			March 31,			June 30,			June 30,			June 30,
	2024			2024			2023			2024			2023
Return on average assets	0.70	%		0.82	%		0.80	%		0.76	%		0.81	%
Return on average stockholders’ equity	5.61			6.65			6.61			6.13			6.69
Return on average tangible stockholders’ equity (a)	8.10			9.61			9.70			8.86			9.84
Return on average tangible common equity (a)	8.51			10.09			10.21			9.30			10.37
Efficiency ratio	62.86			59.56			62.28			61.17			61.53
Net interest margin	2.71			2.81			3.02			2.76			3.17

(a) Return on average tangible stockholders’ equity and return on average tangible common equity (“ROTCE”) are non-GAAP (“generally accepted accounting principles”) financial measures and exclude the impact of intangible assets and goodwill from both assets and stockholders’ equity. ROTCE also excludes preferred stock from stockholders’ equity. Refer to “Explanation of Non-GAAP Financial Measures,” “Selected Quarterly Financial Data” and “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.

Core earnings1 for the three and six months ended June 30, 2024 were $22.7 million and $48.3 million, respectively, or $0.39 and $0.83 per diluted share, a decrease from $27.2 million and $59.9 million, or $0.46 and $1.01 per diluted share, for the corresponding prior year periods, and a decrease from $25.6 million, or $0.44 per diluted share, for the prior linked quarter.

Core earnings PTPP1 for the three and six months ended June 30, 2024 was $32.7 million and $68.9 million, respectively, or $0.56 and $1.18 per diluted share, as compared to $37.6 million and $83.7 million, or $0.64 and $1.42 per diluted share, for the corresponding prior year periods, and $36.2 million, or $0.62 per diluted share, for the prior linked quarter. Selected performance metrics are as follows:

	For the Three Months Ended,												For the Six Months Ended,
	June 30,				March 31,				June 30,				June 30,				June 30,
Core Ratios1 (Annualized):		2024				2024				2023				2024				2023
Return on average assets		0.68	%			0.76	%			0.81	%			0.72	%			0.90	%
Return on average tangible stockholders’ equity		7.86				8.91				9.84				8.38				10.98
Return on average tangible common equity		8.26				9.36				10.36				8.81				11.56
Efficiency ratio		63.47				61.05				61.94				62.24				59.13
Core diluted earnings per share	$	0.39			$	0.44			$	0.46			$	0.83			$	1.01
Core PTPP diluted earnings per share		0.56				0.62				0.64				1.18				1.42

Key developments for the recent quarter are described below:

• Asset Quality: Asset quality metrics remain strong as criticized and classified assets, non-performing loans, and loans 30 to 89 days past due as a percentage of total loans receivable were 1.42%, 0.33%, and 0.10%, respectively. These metrics continue to reflect strong credit performance and remain low compared to pre-pandemic levels.
• Capital Accretion: Common equity tier 1 capital ratio2, book value and tangible book value per share were 11.2%, $28.67 and $18.93, respectively, and increased approximately 20 basis points, $0.35 and $0.30 from the prior linked quarter.3
• Share repurchases: The Company repurchased 338,087 shares totaling $5.0 million. The Company has 1,638,524 shares available for repurchase under the authorized repurchase program.

Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “Our current quarter results reflected prudent balance sheet management and expense discipline. As rates are elevated and the yield curve remains inverted, net interest margin compressed during the quarter, but the pace of margin compression is slowing. Additionally, our credit quality continues to remain robust, we grew capital, and continued share repurchases during the quarter.” Mr. Maher added, “The Company is well positioned to bolster shareholder value through growth in the second half of the year.”

The Company’s Board of Directors declared its 110th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on August 16, 2024 to common stockholders of record on August 5, 2024. The Company’s Board of Directors also 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 August 15, 2024 to preferred stockholders of record on July 31, 2024.

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 branch consolidation expense, net (gain) loss on equity investments, net loss on sale of investments, net gain on sale of trust business, 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. 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.

2 Estimated.3 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.

Results of Operations

The current quarter net interest income and margin were impacted by a mix-shift to and repricing of higher cost funding. Deposit betas increased modestly to 42%, from 40% in the prior linked quarter.4 Additionally, the current quarter provision for credit losses includes the impact of an additional $1.6 million charge-off on the single commercial real estate relationship that was previously moved to non-accrual and partially charged-off in 2023. The collateral related to the noted credit is currently under an agreement to sell, which is expected to occur during the third quarter.

4 Deposit beta measures the change in the interest rates paid for interest-bearing deposit accounts versus the change in the federal funds target rate. Represents the deposit beta for total deposits (interest-bearing and non-interest bearing) for the current rate cycle (since December 31, 2021).

Net Interest Income and Margin

Three months ended June 30, 2024 vs. June 30, 2023

Net interest income decreased to $82.3 million, from $92.1 million, primarily reflecting the net impact of the higher interest rate environment.

Net interest margin decreased to 2.71%, from 3.02%, which included the impact of purchase accounting accretion and prepayment fees of 0.04% and 0.05%, respectively. Net interest margin decreased primarily due to the increase in cost of funds outpacing the increase in yield on average interest-earning assets.

Average interest-earning assets decreased by $46.3 million due to balance sheet contraction while the average yield for interest-earning assets increased to 5.25%, from 4.91%.

The cost of average interest-bearing liabilities increased to 3.14%, from 2.39%, primarily due to higher cost of deposits. The total cost of deposits (including non-interest bearing deposits) increased to 2.37%, from 1.52%. Average interest-bearing liabilities increased by $149.6 million, primarily due to an increase in total deposits, partly offset by a decrease in total borrowings.

Six months ended June 30, 2024 vs. June 30, 2023

Net interest income decreased to $168.5 million, from $190.9 million, reflecting the net impact of the higher interest rate environment. Net interest margin decreased to 2.76%, from 3.17%, which included the impact of purchase accounting accretion and prepayment fees of 0.04% for both periods.

Average interest-earning assets increased by $146.4 million, primarily driven by securities growth of $135.4 million, while the average yield increased to 5.25%, from 4.80%.

The cost of average interest-bearing liabilities increased to 3.09%, from 2.08%. The total cost of deposits (including non-interest bearing deposits) increased to 2.34%, from 1.21%. Average interest-bearing liabilities increased by $392.0 million. The drivers for the three month periods, described above, were also the drivers for the six month periods.

Three months ended June 30, 2024 vs. March 31, 2024

Net interest income decreased by $4.0 million, primarily due to an increase in cost of funds and lower average-interest earning assets. Net interest margin decreased to 2.71%, from 2.81%, which included the impact of purchase accounting accretion and prepayment fees of 0.04% for both periods.

Average interest-earning assets decreased by $146.6 million, primarily due to a decrease in loans. The yield on average interest-earning assets decreased to 5.25%, from 5.26%.

The total cost of average interest-bearing liabilities increased to 3.14%, from 3.03%, primarily due to higher cost of deposits. Total cost of deposits (including non-interest bearing deposits) increased to 2.37%, from 2.31%. Average interest-bearing liabilities decreased by $129.4 million, primarily due to decreases in brokered time deposits and high yield savings accounts, partly offset by an increase in borrowings.

Provision for Credit Losses

Provision for credit losses for the three and six months ended June 30, 2024 was $3.1 million and $3.7 million, respectively, as compared to $1.2 million and $4.2 million for the corresponding prior year periods, and $591,000 in the prior linked quarter. The current quarter provision was driven by the additional charge-off previously noted and changes in the external macro-economic forecasts, partly offset by lower loan balances.

Net loan charge-offs were $1.5 million and $1.8 million for the three and six months ended June 30, 2024, respectively, as compared to net loan charge-offs of $123,000 and $76,000 for the three and six months ended June 30, 2023. The current quarter includes the impact of an additional $1.6 million charge-off related to a single commercial real estate relationship, as previously noted. Net loan charge-offs were $349,000 in the prior linked quarter. Refer to “Asset Quality” section for further discussion.

Non-interest Income

Three months ended June 30, 2024 vs. June 30, 2023

Other income increased to $11.0 million, as compared to $8.9 million. Other income was favorably impacted by non-core operations related to net gains/losses on equity investments of $887,000 for the current quarter, and adversely impacted by non-core operations of $559,000 for the prior year quarter.

Excluding non-core operations, other income increased by $611,000, primarily driven by increases in the cash surrender value of bank owned life insurance of $544,000 and net gain on sale of loans of $387,000, partially offset by a decrease in fees and service charges of $587,000 on lower title activity and retail deposit fees.

Six months ended June 30, 2024 vs. June 30, 2023

Other income increased to $23.3 million, as compared to $11.0 million. The current period was favorably impacted by non-core operations of $4.0 million related to net gains on equity investments and sale of a portion of the Company’s trust business. The prior year was adversely impacted by non-core operations of $8.1 million, primarily related to losses on sale of investments.

Excluding non-core operations, other income increased by $241,000, primarily driven by increases in the cash surrender value of bank owned life insurance of $1.1 million, which included one-time death benefits in the current period, and net gain on sale of loans of $724,000. This was partially offset by a decrease in fees and service charges of $1.3 million, which was driven by the same factors as noted above.

Three months ended June 30, 2024 vs. March 31, 2024

Other income in the prior linked quarter was $12.3 million and was favorably impacted by non-core operations of $3.1 million related to net gains on equity investments and sale of a portion of the Company’s trust business. Excluding non-core operations, other income increased by $897,000, primarily due to an increase in fees and service charges of $542,000, which was driven by higher title activity.

Non-interest Expense

Three months ended June 30, 2024 vs. June 30, 2023

Operating expenses decreased $4.3 million to $58.6 million, from $62.9 million. The primary drivers were decreases in professional fees of $2.9 million and compensation and employee benefits expenses of $1.1 million, which reflect the net realization of the Company’s performance improvements initiatives and strategic investments made over the past year.

Six months ended June 30, 2024 vs. June 30, 2023

Operating expenses decreased to $117.3 million, as compared to $124.2 million. Operating expenses were adversely impacted by an FDIC special assessment in the current year of $418,000, and merger related and net branch consolidation expenses of $92,000 in the prior year period.

Excluding non-core operations, operating expenses decreased by $7.3 million. The primary drivers were decreases in professional fees of $5.3 million and compensation and employee benefits expenses of $2.2 million, which reflect the net realization of the Company’s performance improvements initiatives and strategic investments made over the past year.

Three months ended June 30, 2024 vs. March 31, 2024

Operating expenses in the prior linked quarter were $58.7 million and included non-core operations of $418,000, related to an FDIC special assessment. Excluding non-core operations, operating expenses increased by $366,000.

Income Tax Expense

The provision for income taxes was $7.1 million and $17.7 million for the three and six months ended June 30, 2024, respectively, as compared to $9.0 million and $17.7 million for the same prior year periods, and $10.6 million for the prior linked quarter. The effective tax rate was 22.5% and 25.0% for the three and six months ended June 30, 2024, respectively, as compared to 24.4% and 24.0% for the same prior year periods, and 27.1% for the prior linked quarter. The prior linked quarter and current year’s effective tax rates were negatively impacted by 3.0% and 1.6%, respectively, due to a non-recurring write-off of a deferred tax asset of $1.2 million.

Financial Condition

June 30, 2024 vs. December 31, 2023

Total assets decreased by $216.5 million to $13.32 billion, from $13.54 billion, primarily due to decreases in loans and debt securities. Total loans decreased by $175.3 million to $10.02 billion, from $10.19 billion, primarily due to a decrease in the total commercial portfolio of $165.3 million driven by loan payoffs and lower loan originations. The loan pipeline increased by $76.1 million to $259.1 million from $183.0 million. Held-to-maturity debt securities decreased by $53.9 million to $1.11 billion, from $1.16 billion, primarily due to principal repayments. Debt securities available-for-sale decreased $32.4 million to $721.5 million, from $753.9 million, primarily due to principal reductions and maturities. Other assets increased by $23.3 million to $203.0 million, from $179.7 million, primarily due to an increase in the market values of derivatives associated with customer interest rate swap programs.

Total liabilities decreased by $231.2 million to $11.65 billion, from $11.88 billion primarily related to lower deposits and a funding mix shift. Deposits decreased by $440.9 million to $9.99 billion, from $10.43 billion, primarily due to decreases in high-yield savings accounts of $283.1 million and interest bearing deposits of $243.9 million. Time deposits decreased to $2.37 billion, from $2.45 billion, representing 23.7% and 23.4% of total deposits, respectively, which was primarily related to planned runoff of brokered time deposits which decreased by $229.9 million, offset by increases in retail time deposits of $161.7 million. The loan-to-deposit ratio was 100.3%, as compared to 97.7%. Federal Home Loan Bank (“FHLB”) advances decreased by $59.3 million to $789.3 million, from $848.6 million due to a mix shift in funding sources to other borrowings, which increased by $228.0 million to $424.5 million, from $196.5 million, as a result of lower cost funding availability.

Other liabilities increased by $31.4 million to $332.1 million, from $300.7 million, primarily due to an increase 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 June 30, 2024, including the Company’s estimated common equity tier one capital ratio which increased to 11.2%, up approximately 35 basis points from December 31, 2023.

Total stockholders’ equity increased to $1.68 billion, as compared to $1.66 billion, primarily reflecting net income, partially offset by capital returns comprising of share repurchases and dividends. For the six months ended June 30, 2024, the Company repurchased 1,295,914 shares totaling $20.1 million representing a weighted average cost of $15.35. The Company had 1,638,524 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $3.7 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.

The Company actively monitors its goodwill as the challenging economic environment persists and continues to pressure the Company’s stock price and industry valuations. The Company customarily performs its annual goodwill impairment assessment during the third quarter.

The Company’s tangible common equity3 increased by $11.6 million to $1.11 billion. The Company’s stockholders’ equity to assets ratio was 12.59% at June 30, 2024, and tangible common equity to tangible assets ratio increased by 26 basis points during the quarter to 8.64%, primarily due to the drivers described above.

Book value per common share increased to $28.67, as compared to $27.96. Tangible book value per common share3 increased to $18.93, as compared to $18.35.

Asset Quality

June 30, 2024 vs. December 31, 2023

Overall asset quality metrics remained stable. The Company’s non-performing loans increased to $33.4 million from $29.5 million and represented 0.33% and 0.29% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 205.97%, as compared to 227.21%. The level of 30 to 89 days delinquent loans decreased to $9.7 million, from $19.2 million. Criticized and classified assets decreased to $142.6 million, from $146.9 million. The Company’s allowance for loan credit losses was 0.69% of total loans, as compared to 0.66%. 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 $30.6 million, from $26.4 million. The allowance for loan credit losses as a percentage of total non-performing loans was 225.10%, as compared to 254.64%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, decreased to $8.5 million, from $17.7 million. The allowance for loan credit losses plus the unamortized credit and PCD marks amounted to $75.0 million, or 0.75% of total loans, as compared to $74.7 million, or 0.73% of total loans.

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.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, July 19, 2024 at 11:00 a.m. Eastern Time. The direct dial number for the call is (833) 470-1428, using the access code 619002. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (866) 813-9403, access code 217614, from one hour after the end of the call until August 16, 2024. 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, 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 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 effect of the Company’s rating under the Community Reinvestment Act, 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, 2023, 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)
		June 30,			March 31,			December 31,			June 30,
		2024			2024			2023			2023
		(Unaudited)			(Unaudited)						(Unaudited)
Assets
Cash and due from banks		$	181,198		$	130,422		$	153,718		$	457,747
Debt securities available-for-sale, at estimated fair value			721,484			744,944			753,892			452,016
Debt securities held-to-maturity, net of allowance for securities credit losses of $958 at June 30, 2024, $1,058 at March 31, 2024, $1,133 at December 31, 2023 and $964 at June 30, 2023 (estimated fair value of $1,003,850 at June 30, 2024, $1,029,965 at March 31, 2024, $1,068,438 at December 31, 2023 and $1,109,756 at June 30, 2023)			1,105,843			1,128,666			1,159,735			1,222,507
Equity investments			104,132			103,201			100,163			96,452
Restricted equity investments, at cost			92,679			85,689			93,766			105,305
Loans receivable, net of allowance for loan credit losses of $68,839 at June 30, 2024, $67,173 at March 31, 2024, $67,137 at December 31, 2023 and $61,791 at June 30, 2023			9,961,117			10,068,209			10,136,721			10,030,106
Loans held-for-sale			2,062			4,702			5,166			4,200
Interest and dividends receivable			50,976			52,502			51,874			47,933
Premises and equipment, net			117,392			119,211			121,372			124,139
Bank owned life insurance			267,867			266,615			266,498			263,836
Assets held for sale			28			28			28			3,608
Goodwill			506,146			506,146			506,146			506,146
Core deposit intangible			7,859			8,669			9,513			11,476
Other assets			202,972			199,974			179,661			213,432
Total assets		$	13,321,755		$	13,418,978		$	13,538,253		$	13,538,903
Liabilities and Stockholders’ Equity
Deposits		$	9,994,017		$	10,236,851		$	10,434,949		$	10,158,337
Federal Home Loan Bank advances			789,337			658,436			848,636			1,091,666
Securities sold under agreements to repurchase with customers			80,000			66,798			73,148			74,452
Other borrowings			424,490			425,722			196,456			195,925
Advances by borrowers for taxes and insurance			25,168			28,187			22,407			27,839
Other liabilities			332,074			337,147			300,712			364,401
Total liabilities			11,645,086			11,753,141			11,876,308			11,912,620
Stockholders’ equity:
OceanFirst Financial Corp. stockholders’ equity			1,675,885			1,665,112			1,661,163			1,625,435
Non-controlling interest			784			725			782			848
Total stockholders’ equity			1,676,669			1,665,837			1,661,945			1,626,283
Total liabilities and stockholders’ equity		$	13,321,755		$	13,418,978		$	13,538,253		$	13,538,903

OceanFirst Financial Corp.CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts)
		For the Three Months Ended,											For the Six Months Ended,
		June 30,			March 31,				June 30,				June 30,			June 30,
		2024				2024				2023			2024				2023
		|---------------------- (Unaudited) ----------------------|											|---------- (Unaudited) -----------|
Interest income:
Loans		$	136,049		$	137,121			$	129,104			$	273,170		$	250,824
Debt securities			19,039			19,861				14,320				38,900			28,606
Equity investments and other			4,338			4,620				6,672				8,958			9,700
Total interest income			159,426			161,602				150,096				321,028			289,130
Interest expense:
Deposits			60,071			59,855				37,934				119,926			59,264
Borrowed funds			17,092			15,523				20,053				32,615			38,955
Total interest expense			77,163			75,378				57,987				152,541			98,219
Net interest income			82,263			86,224				92,109				168,487			190,911
Provision for credit losses			3,114			591				1,229				3,705			4,242
Net interest income after provision for credit losses			79,149			85,633				90,880				164,782			186,669
Other income:
Bankcard services revenue			1,571			1,416				1,544				2,987			2,874
Trust and asset management revenue			419			526				645				945			1,257
Fees and service charges			5,015			4,473				5,602				9,488			10,761
Net gain on sales of loans			420			357				33				777			53
Net gain (loss) on equity investments			887			1,923				(559	)			2,810			(7,360	)
Income from bank owned life insurance			1,726			1,862				1,182				3,588			2,463
Commercial loan swap income			241			138				—				379			701
Other			706			1,591				481				2,297			252
Total other income			10,985			12,286				8,928				23,271			11,001
Operating expenses:
Compensation and employee benefits			33,136			32,759				34,222				65,895			68,142
Occupancy			5,175			5,199				5,265				10,374			10,504
Equipment			1,068			1,130				1,101				2,198			2,306
Marketing			1,175			990				961				2,165			1,943
Federal deposit insurance and regulatory assessments			2,685			3,135				2,465				5,820			4,214
Data processing			6,018			5,956				6,165				11,974			12,319
Check card processing			1,075			1,050				1,214				2,125			2,495
Professional fees			2,161			2,732				5,083				4,893			10,181
Amortization of core deposit intangible			810			844				994				1,654			2,021
Branch consolidation expense, net			—			—				—				—			70
Merger related expenses			—			—				—				—			22
Other operating expense			5,317			4,877				5,460				10,194			10,022
Total operating expenses			58,620			58,672				62,930				117,292			124,239
Income before provision for income taxes			31,514			39,247				36,878				70,761			73,431
Provision for income taxes			7,082			10,637				8,996				17,719			17,650
Net income			24,432			28,610				27,882				53,042			55,781
Net income (loss) attributable to non-controlling interest			59			(57	)			85				2			101
Net income attributable to OceanFirst Financial Corp.			24,373			28,667				27,797				53,040			55,680
Dividends on preferred shares			1,004			1,004				1,004				2,008			2,008
Net income available to common stockholders		$	23,369		$	27,663			$	26,793			$	51,032		$	53,672
Basic earnings per share		$	0.40		$	0.47			$	0.45			$	0.87		$	0.91
Diluted earnings per share		$	0.40		$	0.47			$	0.45			$	0.87		$	0.91
Average basic shares outstanding			58,356			58,789				59,147				58,489			58,988
Average diluted shares outstanding			58,357			58,791				59,153				58,490			59,038

OceanFirst Financial Corp.SELECTED LOAN AND DEPOSIT DATA(dollars in thousands)
LOANS RECEIVABLE				At
				June 30,				March 31,				December 31,				September 30,				June 30,
					2024				2024				2023				2023				2023
Commercial:
Commercial real estate - investor				$	5,324,994			$	5,322,755			$	5,353,974			$	5,334,279			$	5,319,686
Commercial real estate - owner-occupied					857,710				914,582				943,891				957,216				981,618
Commercial and industrial					616,400				677,176				666,532				652,119				620,284
Total commercial					6,799,104				6,914,513				6,964,397				6,943,614				6,921,588
Consumer:
Residential real estate					2,977,698				2,965,276				2,979,534				2,928,259				2,906,556
Home equity loans and lines and other consumer ("other consumer")					242,526				245,859				250,664				251,698				255,486
Total consumer					3,220,224				3,211,135				3,230,198				3,179,957				3,162,042
Total loans					10,019,328				10,125,648				10,194,595				10,123,571				10,083,630
Deferred origination costs (fees), net					10,628				9,734				9,263				8,462				8,267
Allowance for loan credit losses					(68,839	)			(67,173	)			(67,137	)			(63,877	)			(61,791	)
Loans receivable, net				$	9,961,117			$	10,068,209			$	10,136,721			$	10,068,156			$	10,030,106
Mortgage loans serviced for others				$	104,136			$	89,555			$	68,217			$	52,796			$	50,820
	At June 30, 2024 Average Yield
Loan pipeline (1):
Commercial	7.88	%		$	166,206			$	66,167			$	124,707			$	50,756			$	39,164
Residential real estate	6.96				80,330				57,340				49,499				66,682				58,022
Other consumer	8.81				12,586				13,030				8,819				13,795				18,621
Total	7.64	%		$	259,122			$	136,537			$	183,025			$	131,233			$	115,807

	For the Three Months Ended
	June 30,						March 31,			December 31,			September 30,			June 30,
	2024						2024			2023			2023			2023
	Average Yield
Loan originations:
Commercial	7.98	%		$	56,053		$	123,010		$	94,294		$	90,263		$	197,732
Residential real estate	6.74				121,388			78,270			113,227			92,299			100,542
Other consumer	8.99				16,970			11,405			16,971			17,019			22,487
Total	7.29	%		$	194,411		$	212,685		$	224,492		$	199,581		$	320,761
Loans sold				$	45,045		$	29,965		$	20,138		$	15,404		$	18,664

(1) Loan pipeline includes loans approved but not funded.

DEPOSITS	At
	June 30,			March 31,			December 31,			September 30,			June 30,
	2024			2024			2023			2023			2023
Type of Account
Non-interest-bearing	$	1,632,521		$	1,639,828		$	1,657,119		$	1,827,381		$	1,854,136
Interest-bearing checking		3,667,837			3,865,699			3,911,766			3,708,874			3,537,834
Money market		1,210,312			1,150,979			1,021,805			860,025			770,440
Savings		1,115,688			1,260,309			1,398,837			1,484,000			1,229,897
Time deposits (1)		2,367,659			2,320,036			2,445,422			2,653,649			2,766,030
Total deposits	$	9,994,017		$	10,236,851		$	10,434,949		$	10,533,929		$	10,158,337

(1)	Includes brokered time deposits of $401.6 million, $543.4 million, $631.5 million, $995.5 million, and $1.42 billion at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.

OceanFirst Financial Corp.ASSET QUALITY(dollars in thousands)
ASSET QUALITY (1)	June 30,				March 31,				December 31,				September 30,				June 30,
		2024				2024				2023				2023				2023
Non-performing loans:
Commercial real estate - investor	$	19,761			$	21,507			$	20,820			$	20,723			$	13,000
Commercial real estate - owner-occupied		4,081				3,355				351				240				565
Commercial and industrial		434				567				304				1,120				199
Residential real estate		7,213				7,181				5,542				5,624				6,174
Other consumer		1,933				2,401				2,531				2,391				2,820
Total non-performing loans	$	33,422			$	35,011			$	29,548			$	30,098			$	22,758
Delinquent loans 30 to 89 days	$	9,655			$	17,534			$	19,202			$	20,591			$	3,136
Modifications to borrowers experiencing financial difficulty (2)
Non-performing (included in total non-performing loans above)	$	8,677			$	9,075			$	6,420			$	6,679			$	6,882
Performing		27,184				15,619				15,361				7,645				7,516
Total modifications to borrowers experiencing financial difficulty (2)	$	35,861			$	24,694			$	21,781			$	14,324			$	14,398
Allowance for loan credit losses	$	68,839			$	67,173			$	67,137			$	63,877			$	61,791
Allowance for loan credit losses as a percent of total loans receivable (3)		0.69	%			0.66	%			0.66	%			0.63	%			0.61	%
Allowance for loan credit losses as a percent of total non-performing loans (3)		205.97				191.86				227.21				212.23				271.51
Non-performing loans as a percent of total loans receivable		0.33				0.35				0.29				0.30				0.23
Non-performing assets as a percent of total assets		0.25				0.26				0.22				0.22				0.17
Supplemental PCD and non-performing loans
PCD loans, net of allowance for loan credit losses	$	16,058			$	16,700			$	16,122			$	18,640			$	18,872
Non-performing PCD loans		2,841				3,525				3,183				3,177				3,171
Delinquent PCD and non-performing loans 30 to 89 days		1,188				2,088				1,516				13,007				1,976
PCD modifications to borrowers experiencing financial difficulty (2)		759				764				771				750				755
Asset quality, excluding PCD loans (4)
Non-performing loans		30,581				31,486				26,365				26,921				19,587
Delinquent loans 30 to 89 days (excludes non-performing loans)		8,467				15,446				17,686				7,584				1,160
Modifications to borrowers experiencing financial difficulty (2)		35,102				23,930				21,010				13,574				13,643
Allowance for loan credit losses as a percent of total non-performing loans (3)		225.10	%			213.34	%			254.64	%			237.28	%			315.47	%
Non-performing loans as a percent of total loans receivable		0.31				0.31				0.26				0.27				0.19
Non-performing assets as a percent of total assets		0.23				0.23				0.19				0.20				0.14

(1)	At June 30, 2024, non-performing loans included the remaining exposure of $7.2 million on the single commercial real estate relationship discussed in “Results of Operations”.
(2)	Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.
(3)	Loans acquired from prior bank 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 $6.1 million, $7.0 million, $7.5 million, $8.8 million and $9.8 million at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively.
(4)	All balances and ratios exclude PCD loans.

NET LOAN CHARGE-OFFS	For the Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
		2024				2024				2023				2023				2023
Net loan charge-offs:
Loan charge-offs (1)	$	(1,600	)		$	(441	)		$	(98	)		$	(8,379	)		$	(206	)
Recoveries on loans		148				92				63				108				83
Net loan charge-offs	$	(1,452	)		$	(349	)		$	(35	)		$	(8,271	)		$	(123	)
Net loan charge-offs to average total loans (annualized)		0.06	%			0.01	%			—	%			0.33	%			—	%
Net loan charge-offs detail:
Commercial	$	(1,576	)		$	(35	)		$	9			$	(8,332	)		$	(117	)
Residential real estate		87				66				9				17				9
Other consumer		37				(380	)			(53	)			44				(15	)
Net loan charge-offs	$	(1,452	)		$	(349	)		$	(35	)		$	(8,271	)		$	(123	)

(1) The three months ended June 30, 2024 and September 30, 2023 includes charge-offs related to a single commercial real estate relationship of $1.6 million and $8.4 million, respectively.

OceanFirst Financial Corp.ANALYSIS OF NET INTEREST INCOME
	For the Three Months Ended
	June 30, 2024										March 31, 2024										June 30, 2023
(dollars in thousands)	AverageBalance				Interest			AverageYield/Cost (1)			AverageBalance				Interest			AverageYield/Cost (1)			AverageBalance				Interest			AverageYield/Cost (1)
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments	$	132,574			$	1,770		5.37	%		$	163,192			$	2,226		5.49	%		$	308,238			$	4,283		5.57	%
Securities (2)		2,058,711				21,607		4.22				2,098,421				22,255		4.27				1,931,032				16,709		3.47
Loans receivable, net (3)
Commercial		6,845,988				102,620		6.03				6,925,048				104,421		6.06				6,912,698				99,350		5.76
Residential real estate		2,978,749				29,072		3.90				2,974,468				28,596		3.85				2,895,629				25,936		3.58
Other consumer		246,024				4,357		7.12				248,396				4,104		6.65				255,785				3,818		5.99
Allowance for loan credit losses, net of deferred loan costs and fees		(58,270	)			—		—				(59,141	)			—		—				(53,327	)			—		—
Loans receivable, net		10,012,491				136,049		5.46				10,088,771				137,121		5.46				10,010,785				129,104		5.17
Total interest-earning assets		12,203,776				159,426		5.25				12,350,384				161,602		5.26				12,250,055				150,096		4.91
Non-interest-earning assets		1,237,442										1,206,336										1,217,666
Total assets	$	13,441,218									$	13,556,720									$	13,467,721
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing checking	$	3,862,060				21,043		2.19	%		$	3,925,965				20,795		2.13	%		$	3,718,289				11,964		1.29	%
Money market		1,183,429				10,482		3.56				1,092,003				9,172		3.38				694,311				3,678		2.12
Savings		1,164,203				2,604		0.90				1,355,718				4,462		1.32				1,248,312				389		0.12
Time deposits		2,337,458				25,942		4.46				2,414,063				25,426		4.24				2,458,872				21,903		3.57
Total		8,547,150				60,071		2.83				8,787,749				59,855		2.74				8,119,784				37,934		1.87
FHLB Advances		711,801				8,746		4.94				644,818				7,771		4.85				1,246,914				15,406		4.96
Securities sold under agreements to repurchase		72,305				478		2.66				68,500				411		2.41				71,752				192		1.07
Other borrowings (4)		541,266				7,868		5.85				500,901				7,341		5.89				284,460				4,455		6.28
Total borrowings		1,325,372				17,092		5.19				1,214,219				15,523		5.14				1,603,126				20,053		5.02
Total interest-bearing liabilities		9,872,522				77,163		3.14				10,001,968				75,378		3.03				9,722,910				57,987		2.39
Non-interest-bearing deposits		1,626,165										1,634,583										1,873,226
Non-interest-bearing liabilities(4)		268,078										247,129										244,892
Total liabilities		11,766,765										11,883,680										11,841,028
Stockholders’ equity		1,674,453										1,673,040										1,626,693
Total liabilities and equity	$	13,441,218									$	13,556,720									$	13,467,721
Net interest income					$	82,263									$	86,224									$	92,109
Net interest rate spread (5)								2.11	%									2.23	%									2.52	%
Net interest margin (6)								2.71	%									2.81	%									3.02	%
Total cost of deposits (including non-interest-bearing deposits)								2.37	%									2.31	%									1.52	%

	For the Six Months Ended June 30,
		2024										2023
(dollars in thousands)	AverageBalance				Interest			AverageYield/Cost (1)			AverageBalance				Interest			AverageYield/Cost (1)
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments	$	147,883			$	3,995		5.43	%		$	219,482			$	5,221		4.80	%
Securities (2)		2,078,566				43,863		4.24				1,943,148				33,085		3.43
Loans receivable, net (3)
Commercial		6,885,518				207,041		6.05				6,876,553				192,130		5.63
Residential real estate		2,976,608				57,668		3.87				2,883,904				51,097		3.54
Other consumer		247,210				8,461		6.88				259,573				7,597		5.90
Allowance for loan credit losses, net of deferred loan costs and fees		(58,705	)			—		—				(51,948	)			—		—
Loans receivable, net		10,050,631				273,170		5.46				9,968,082				250,824		5.07
Total interest-earning assets		12,277,080				321,028		5.25				12,130,712				289,130		4.80
Non-interest-earning assets		1,221,889										1,226,061
Total assets	$	13,498,969									$	13,356,773
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing checking	$	3,894,013				41,838		2.16	%		$	3,790,413				18,234		0.97	%
Money market		1,137,716				19,653		3.47				699,940				5,437		1.57
Savings		1,259,960				7,066		1.13				1,308,381				723		0.11
Time deposits		2,375,760				51,369		4.35				2,144,514				34,870		3.28
Total		8,667,449				119,926		2.78				7,943,248				59,264		1.50
FHLB Advances		678,309				16,517		4.90				1,234,919				29,824		4.87
Securities sold under agreements to repurchase		70,403				889		2.54				71,825				282		0.79
Other borrowings (4)		521,084				15,209		5.87				295,248				8,849		6.04
Total borrowings		1,269,796				32,615		5.17				1,601,992				38,955		4.90
Total interest-bearing liabilities		9,937,245				152,541		3.09				9,545,240				98,219		2.08
Non-interest-bearing deposits		1,630,374										1,950,437
Non-interest-bearing liabilities (4)		257,603										242,864
Total liabilities		11,825,222										11,738,541
Stockholders’ equity		1,673,747										1,618,232
Total liabilities and equity	$	13,498,969									$	13,356,773
Net interest income					$	168,487									$	190,911
Net interest rate spread (5)								2.16	%									2.72	%
Net interest margin (6)								2.76	%									3.17	%
Total cost of deposits (including non-interest-bearing deposits)								2.34	%									1.21	%

(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)	For the three and six months ended June 30, 2023, includes reclassifications to conform with current period presentation.
(5)	Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)	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)
		June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
Selected Financial Condition Data:
Total assets		$	13,321,755		$	13,418,978		$	13,538,253		$	13,498,183		$	13,538,903
Debt securities available-for-sale, at estimated fair value			721,484			744,944			753,892			453,208			452,016
Debt securities held-to-maturity, net of allowance for securities credit losses			1,105,843			1,128,666			1,159,735			1,189,339			1,222,507
Equity investments			104,132			103,201			100,163			97,908			96,452
Restricted equity investments, at cost			92,679			85,689			93,766			82,484			105,305
Loans receivable, net of allowance for loan credit losses			9,961,117			10,068,209			10,136,721			10,068,156			10,030,106
Deposits			9,994,017			10,236,851			10,434,949			10,533,929			10,158,337
Federal Home Loan Bank advances			789,337			658,436			848,636			606,056			1,091,666
Securities sold under agreements to repurchase and other borrowings			504,490			492,520			269,604			279,164			270,377
Total stockholders’ equity			1,676,669			1,665,837			1,661,945			1,637,604			1,626,283

		For the Three Months Ended,
		June 30,			March 31,				December 31,			September 30,				June 30,
		2024				2024			2023				2023				2023
Selected Operating Data:
Interest income		$	159,426		$	161,602			$	160,434		$	158,410			$	150,096
Interest expense			77,163			75,378				72,610			67,414				57,987
Net interest income			82,263			86,224				87,824			90,996				92,109
Provision for credit losses			3,114			591				3,153			10,283				1,229
Net interest income after provision for credit losses			79,149			85,633				84,671			80,713				90,880
Other income (excluding activity related to debt and equity investments and sale of trust business)			10,098			9,201				9,685			9,310				9,487
Net gain (loss) on equity investments			887			1,923				2,176			1,452				(559	)
Net gain on sale of trust business			—			1,162				—			—				—
Operating expenses (excluding FDIC special assessment)			58,620			58,254				58,526			64,484				62,930
FDIC special assessment			—			418				1,663			—				—
Income before provision for income taxes			31,514			39,247				36,343			26,991				36,878
Provision for income taxes			7,082			10,637				8,591			6,459				8,996
Net income			24,432			28,610				27,752			20,532				27,882
Net income (loss) attributable to non-controlling interest			59			(57	)			70			(135	)			85
Net income attributable to OceanFirst Financial Corp.		$	24,373		$	28,667			$	27,682		$	20,667			$	27,797
Net income available to common stockholders		$	23,369		$	27,663			$	26,678		$	19,663			$	26,793
Diluted earnings per share		$	0.40		$	0.47			$	0.46		$	0.33			$	0.45
Net accretion/amortization of purchase accounting adjustments included in net interest income		$	1,086		$	921			$	1,604		$	1,745			$	1,152

		At or For the Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
		2024			2024			2023			2023			2023
Selected Financial Ratios and Other Data(1) (2):
Performance Ratios (Annualized):
Return on average assets (3)		0.70	%		0.82	%		0.78	%		0.57	%		0.80	%
Return on average tangible assets (3) (4)		0.73			0.85			0.81			0.59			0.83
Return on average stockholders’ equity (3)		5.61			6.65			6.41			4.75			6.61
Return on average tangible stockholders’ equity (3) (4)		8.10			9.61			9.33			6.93			9.70
Return on average tangible common equity (3) (4)		8.51			10.09			9.81			7.29			10.21
Stockholders’ equity to total assets		12.59			12.41			12.28			12.13			12.01
Tangible stockholders’ equity to tangible assets (4)		9.08			8.92			8.80			8.64			8.51
Tangible common equity to tangible assets (4)		8.64			8.49			8.38			8.21			8.09
Net interest rate spread		2.11			2.23			2.25			2.37			2.52
Net interest margin		2.71			2.81			2.82			2.91			3.02
Operating expenses to average assets		1.75			1.74			1.76			1.88			1.87
Efficiency ratio (5)		62.86			59.56			60.38			63.37			62.28
Loan-to-deposit ratio		100.30			98.90			97.70			96.10			99.30

		For the Six Months Ended June 30,
		2024			2023
Performance Ratios (Annualized):
Return on average assets (3)		0.76	%		0.81	%
Return on average tangible assets (3) (4)		0.79			0.84
Return on average stockholders’ equity (3)		6.13			6.69
Return on average tangible stockholders’ equity (3) (4)		8.86			9.84
Return on average tangible common equity (3) (4)		9.30			10.37
Net interest rate spread		2.16			2.70
Net interest margin		2.76			3.17
Operating expenses to average assets		1.75			1.88
Efficiency ratio (5)		61.17			61.53

		At or For the Three Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
			2024				2024				2023				2023				2023
Trust and Asset Management:
Wealth assets under administration and management (“AUA/M”)		$	150,519			$	236,891			$	335,769			$	336,913			$	339,890
Nest Egg AUA/M			403,647				407,478				401,420				385,317				397,927
Total AUA/M			554,166				644,369				737,189				722,230				737,817
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			28.67				28.32				27.96				27.56				27.37
Tangible book value per common share at end of period (4)			18.93				18.63				18.35				17.93				17.72
Common shares outstanding at end of period			58,481,418				58,812,498				59,447,684				59,421,498				59,420,859
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				38				38
Quarterly Average Balances
Total securities		$	2,058,711			$	2,098,421			$	1,863,136			$	1,873,450			$	1,931,032
Loans receivable, net			10,012,491				10,088,771				10,089,161				10,040,522				10,010,785
Total interest-earning assets			12,203,776				12,350,384				12,349,140				12,384,797				12,250,055
Total goodwill and core deposit intangible			514,535				515,356				516,289				517,282				518,265
Total assets			13,441,218				13,556,720				13,593,107				13,637,213				13,467,721
Time deposits			2,337,458				2,414,063				2,596,706				2,867,921				2,458,872
Total deposits (including non-interest-bearing deposits)			10,173,315				10,422,332				10,633,516				10,626,159				9,993,010
Total borrowings			1,325,372				1,214,219				1,016,722				1,095,173				1,603,126
Total interest-bearing liabilities			9,872,522				10,001,968				9,910,739				9,880,134				9,722,910
Non-interest bearing deposits			1,626,165				1,634,583				1,739,499				1,841,198				1,873,226
Stockholders' equity			1,674,453				1,673,040				1,650,699				1,642,899				1,626,693
Tangible stockholders’ equity (4)			1,159,918				1,157,684				1,134,410				1,125,617				1,108,428
Quarterly Yields and Costs
Total securities			4.22	%			4.27	%			3.81	%			3.82	%			3.47	%
Loans receivable, net			5.46				5.46				5.40				5.30				5.17
Total interest-earning assets			5.25				5.26				5.16				5.08				4.91
Time deposits			4.46				4.24				4.13				4.06				3.57
Total cost of deposits (including non-interest-bearing deposits)			2.37				2.31				2.22				1.99				1.52
Total borrowed funds			5.19				5.14				5.13				5.12				5.02
Total interest-bearing liabilities			3.14				3.03				2.91				2.71				2.39
Net interest spread			2.11				2.23				2.25				2.37				2.52
Net interest margin			2.71				2.81				2.82				2.91				3.02

(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 intangible assets related to goodwill and core deposit intangible. Tangible common equity (also referred to as “tangible book value”) excludes goodwill, core deposit intangible 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
		June 30,				March 31,				December 31,				September 30,				June 30,
			2024				2024				2023				2023				2023
Core Earnings:
Net income available to common stockholders (GAAP)		$	23,369			$	27,663			$	26,678			$	19,663			$	26,793
(Less) add non-recurring and non-core items:
Net (gain) loss on equity investments			(887	)			(1,923	)			(2,176	)			(1,452	)			559
Net gain on sale of trust business			—				(1,162	)			—				—				—
FDIC special assessment			—				418				1,663				—				—
Income tax expense (benefit) on items			188				642				129				351				(162	)
Core earnings (Non-GAAP)		$	22,670			$	25,638			$	26,294			$	18,562			$	27,190
Income tax expense		$	7,082			$	10,637			$	8,591			$	6,459			$	8,996
Provision for credit losses			3,114				591				3,153				10,283				1,229
Less: income tax expense (benefit) on non-core items			188				642				129				351				(162	)
Core earnings PTPP (Non-GAAP)		$	32,678			$	36,224			$	37,909			$	34,953			$	37,577
Core earnings diluted earnings per share		$	0.39			$	0.44			$	0.45			$	0.32			$	0.46
Core earnings PTPP diluted earnings per share		$	0.56			$	0.62			$	0.65			$	0.59			$	0.64
Core Ratios (Annualized):
Return on average assets			0.68	%			0.76	%			0.77	%			0.54	%			0.81	%
Return on average tangible stockholders’ equity			7.86				8.91				9.20				6.54				9.84
Return on average tangible common equity			8.26				9.36				9.67				6.88				10.36
Efficiency ratio			63.47				61.05				60.02				64.29				61.94

		For the Six Months Ended June 30,
			2024				2023
Core Earnings:
Net income available to common stockholders (GAAP)		$	51,032			$	53,672
Add (less) non-recurring and non-core items:
Net (gain) loss on equity investments(1)			(2,810	)			2,752
Net loss on sale of investments(1)			—				5,305
Net gain on sale of trust business			(1,162	)			—
FDIC special assessment			418				—
Merger related expenses			—				22
Branch consolidation expense, net			—				70
Income tax expense (benefit) on items			830				(1,959	)
Core earnings (Non-GAAP)		$	48,308			$	59,862
Income tax expense		$	17,719			$	17,650
Provision for credit losses			3,705				4,242
Less: income tax expense (benefit) on non-core items			830				(1,959	)
Core earnings PTPP (Non-GAAP)		$	68,902			$	83,713
Core diluted earnings per share		$	0.83			$	1.01
Core earnings PTPP diluted earnings per share		$	1.18			$	1.42
Core Ratios (Annualized):
Return on average assets			0.72	%			0.90	%
Return on average tangible stockholders’ equity			8.38				10.98
Return on average tangible common equity			8.81				11.56
Efficiency ratio			62.24				59.13

(1)

The sale of specific positions in two financial institutions impacted both equity investments and debt securities for the three months ended March 31, 2023. On the Consolidated Statements of Income, the losses on sale of equity investments and debt securities are reported within net gain (loss) on equity investments ($4.6 million) and other ($697,000), respectively, for the three months ended March 31, 2023.

		June 30,				March 31,				December 31,				September 30,				June 30,
			2024				2024				2023				2023				2023
Tangible Equity:
Total stockholders' equity		$	1,676,669			$	1,665,837			$	1,661,945			$	1,637,604			$	1,626,283
Less:
Goodwill			506,146				506,146				506,146				506,146				506,146
Core deposit intangible			7,859				8,669				9,513				10,489				11,476
Tangible stockholders' equity			1,162,664				1,151,022				1,146,286				1,120,969				1,108,661
Less:
Preferred stock			55,527				55,527				55,527				55,527				55,527
Tangible common equity		$	1,107,137			$	1,095,495			$	1,090,759			$	1,065,442			$	1,053,134
Tangible Assets:
Total assets		$	13,321,755			$	13,418,978			$	13,538,253			$	13,498,183			$	13,538,903
Less:
Goodwill			506,146				506,146				506,146				506,146				506,146
Core deposit intangible			7,859				8,669				9,513				10,489				11,476
Tangible assets		$	12,807,750			$	12,904,163			$	13,022,594			$	12,981,548			$	13,021,281
Tangible stockholders' equity to tangible assets			9.08	%			8.92	%			8.80	%			8.64	%			8.51	%
Tangible common equity to tangible assets			8.64	%			8.49	%			8.38	%			8.21	%			8.09	%

Company Contact:

Patrick S. BarrettChief Financial OfficerOceanFirst Financial Corp. Tel: (732) 240-4500, ext. 27507Email: pbarrett@oceanfirst.com