Q2 2026 OceanFirst Financial Corp Earnings Call Transcript

Jul 31, 2026 / 03:00 PM GMT

Transcript 10-Q8-K

Key Points

Positve

Core earnings per share of $0.43 were unchanged from the prior quarter and up 39% year-over-year, with pre-tax, pre-provision core earnings growing 29% sequentially.
The transformational acquisition of Flushing Financial Corporation closed on June 1, 2026, adding approximately $8.7 billion in assets, $5 billion in loans, and $7.4 billion in deposits, creating a combined franchise of about $23 billion in assets.
Net interest income grew for the eighth consecutive quarter, increasing 25% from the prior quarter and 38% from the prior year, with net interest margin expanding 12 basis points to 3.05%.
Underlying asset quality remains strong, with non-performing loans to total loans at 0.33% and non-performing assets to total assets at 0.38% (excluding acquired credit deteriorated loans), consistent with historically low levels.
The company successfully repositioned its balance sheet by selling $1.3 billion of multi-family loans, eliminating most exposure to New York City rent-regulated properties and reducing commercial real estate concentration by approximately 50% points to 381%.
Organic commercial loan growth was approximately $154 million (2% from the prior quarter), with C&I business growing 8% on an annualized basis, reflecting continued momentum from recruitment efforts.
Deposit costs dropped by 17 basis points, and non-interest-bearing deposits increased 6%, with Premier Bank deposits growing by $150 million and crossing the $100 million mark.
The company remains on track to achieve its cost savings and returns targets, with a significant portion of cost savings expected shortly after systems conversion, and management reiterated its 2027 profitability targets.
Capital levels remain strong with an estimated common equity tier 1 ratio of 10.7%, supported by a $225 million strategic investment from Warburg Pincus.
The company has a clear path to margin expansion, with guidance for net interest margin to reach 307-312 basis points in Q3 and 309-314 in Q4, driven by full-quarter accretion and funding optimization.

Negative

GAAP net loss of $0.04 per share was driven by $0.47 per share (or $33.6 million) of non-recurring merger-related expenses, net of taxes.
Tangible book value per share declined to $18.19, reflecting the impact of purchase accounting and a substantial increase in the allowance for credit losses.
Criticized and classified loans increased to 3.12% of total loans, impacted by the Flushing acquisition and the application of OceanFirst's credit rating methodology, though management notes this does not reflect credit deterioration.
The company faces competitive pressures on loan pricing, with spreads on new loans at historically tight levels, particularly in the C&I space.
The company is modestly liability sensitive, and a 25 basis point rate hike would have a $5 million annual pre-tax impact on revenues, while a rate cut would have a $4 million impact.
Excluding Flushing, deposits declined modestly due to seasonal outflows in government deposits and a reduction in broker deposits.
The company expects a flat balance sheet for the remainder of 2026, with loan and deposit growth of only 1-2% from June 30 levels by year-end.
Operating expenses are expected to remain elevated in Q3 (120-125 million) and Q4 (110-115 million) as integration costs and brand launch expenses are incurred, before cost savings fully materialize.
The remaining rent-regulated multi-family loans are in a runoff posture, expected to decline slowly over the next 8-12 quarters, which could limit loan growth.
The effective tax rate is expected to remain around 28% going forward, which is higher than historical levels due to the company's new profile taxability.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

OCFC.OQ - OceanFirst Financial Corp
Q2 2026 OceanFirst Financial Corp Earnings Call
Jul 31, 2026 / 03:00PM GMT

=====================
Presentation
--------------------------------------------------------------------------------
Unidentified_1 [1]
--------------------------------------------------------------------------------
So the Ocean first, second quarter 2026 earnings call.

I'm Alfred Goon, SVP of Corporate Development and Investor Relations.

Before we kick off the call, we'd like to remind everyone that our quarterly earnings release and related earnings supplement can be found on the company website, oceanfirst.com.

Our remarks today may contain forward-looking statements and and may refer to non-GAAP financial measures.

All participants should refer to our SEC filings for a complete discussion of forward-looking statements and associated risk factors.

Thank you, and now I will turn the call over to Christopher Maher, Chief Executive Officer of Motion First.

Thank you, Alfred,

Already have an account? Log in

Get the full story

Subscribe Now

	Access to All Earning Calls and Stock Analysis
	30-Year Financial on one screen
	All-in-one Stock Screener with unlimited filters
	Customizable Stock Dashboard
	Real Time Insider Trading Transactions
	8,000+ Institutional investors’ 13F holdings
	Powerful Excel Add-in and Google sheets Add-on
	All data downloadable
	Quick customer support
	And much more...

7-Day Free Trial · Cancel Anytime

Subscription fee may be tax deductible.

Excellent

4.6 out of 5

Trustpilot

Research Tools

All-In-One Screener Stock Ideas Stock List Guru List Guru Real-Time Picks Insider List Insider Trades Economic Indicators Sector & Industry Performance DCF Calculator Calculators Discussion Board

Product

Pricing Plans Excel Add-In Google Sheets Add-on Data API Stock Comparison Table Manual of Stocks Instant Alerts Mobile App Newsletters Signup 中文

Education

Financial Glossary Tutorials FAQ Buffett Indicator Shiller P/E Yield Curve Today U.S. Inflation Rate Global Market Valuation Fed Net Liquidity Buffett Assets Allocation

Company

About GuruFocus Career Contact Us Advertise Term of Use Privacy Policy Referral Program Partner Program

Survey

We'd love to learn more about your experiences on GuruFocus.com and how we can improve!

Take Survey

Disclaimers

GuruFocus.com is not operated by a broker or a dealer. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The individuals or entities selected as "gurus" may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. Gurus may be added or dropped from the GuruFocus site at any time. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes are provided by QuoteMedia, Inc. (CSI). Company fundamental data is provided by Morningstar. Analyst estimates data is sourced from both Refinitiv and Morningstar, with priority given to Refinitiv data. Data is updated daily.