OCFC · OceanFirst Financial Corp.

OceanFirst Financial Corp.’s Q1 2026 results reflect a deliberate pivot toward commercial lending and operational discipline amid ongoing integration planning for the Flushing Financial Corporation merger. Net interest margin expanded 6 basis points to 2.93%, driven primarily by a 16-basis-point decline in the total cost of deposits to 1.97%, as the company shifted funding from higher-cost FHLB advances ($217M reduction) toward favorably priced deposits ($192M increase). Loan growth was concentrated in commercial and industrial segments—up $105.1M (19% annualized)—while residential and consumer originations were fully discontinued as of December 31, 2025, resulting in a $71.0M decline in consumer loans and contributing to a $1.9M drop in fees and service charges. Core earnings rose 20% year-over-year to $24.3M, underscoring underlying profitability despite $4.2M in merger-related expenses and $0.1M in restructuring charges tied to the residential exit. Management explicitly attributed performance to 'continued loan growth, net interest margin expansion, and expense discipline' and reaffirmed expectation that the Flushing merger will close in Q2 2026, subject to Federal Reserve approval—a condition highlighted across both Exhibit 99.1 and Exhibit 99.2 as material to near-term execution risk and strategic trajectory. Asset quality remained robust: non-performing loans were 0.31% of total loans, criticized loans stood at 1.53% (below pre-pandemic average), and the allowance for loan credit losses covered non-performing loans 248.6x—indicating strong coverage even as provision expense declined to $2.7M from $5.3M year-ago. Capital metrics remained solid, with estimated CET1 ratio at 10.7% and tangible common equity to tangible assets at 8.15%, supporting continued dividend continuity ($0.20/share, 117th consecutive) and modest buybacks ($3.4M repurchased during the quarter).