Lends mainly to businesses, funding investor-owned commercial real estate and commercial and industrial loans through dozens of branches across New Jersey and the New York and Philadelphia metros. It began in 1902 in Point Pleasant, New Jersey, as the Point Pleasant Building & Loan Association, a neighborhood savings-and-mortgage club that later took the OceanFirst name, drawn from its Ocean County home on the Jersey Shore.
OceanFirst posts a $3.0M net loss as $42.8M in merger costs and a $1.31B loan sale loss overshadow a 38% rise in net interest income.
The Flushing Financial merger closed, nearly doubling the balance sheet. rose 32% to $131.3 million and the expanded to 3.05%, but a $42.8 million merger charge and a loss on a $1.31 billion multifamily loan sale pushed the to a net loss of $3.0 million. The merger transforms the company's scale, but the quarter's repositioning costs obscure the core earnings power of the combined entity.
Key takeaways
The company reported a net loss of $3.0 million, or $0.04 per share, driven by $42.8 million in merger-related expenses and a loss on the sale of a $1.31 billion multifamily loan portfolio that was used to reposition the balance sheet.
rose 38% to $120.7 million, as average interest-earning assets increased by $3.81 billion following the Flushing Financial acquisition and organic loan growth.
The expanded 12 to 3.05%, benefiting from asset repricing and higher-yielding acquired loans, while the total cost of deposits remained flat at 2.06%.
Section summaries
Management's Discussion and Analysis
Q2 2026 net loss of $3.0M driven by $42.8M in merger expenses, while net interest margin expanded 12 bps to 3.05%.
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rose 38% to $120.7M, driven by a $3.81B increase in average interest-earning assets from the Flushing acquisition and organic loan growth.
Total assets nearly doubled to $23.27 billion after the acquisition added $8.69 billion in assets, $6.19 billion in loans, and $7.44 billion in deposits.
rose to $142.4 million from $38.1 million at year-end, largely due to $53.8 million in acquired non-performing loans and a $20.7 million non-performing investment from Flushing.
The stood at 10.72%, supported by a $225 million strategic equity investment from Warburg Pincus affiliates that closed concurrently with the merger.
What changed
The Flushing Financial merger, flagged in the FY 2025 10-K as introducing material execution and integration risk, closed during the quarter, adding $8.69 billion in assets and triggering $42.8 million in merger-related expenses.
The continued to expand, reaching 3.05% from 2.91% a year ago and 2.93% in the prior quarter, as the benefit of higher-yielding acquired assets outweighed flat deposit costs.
The single $50.4 million commercial relationship downgraded to substandard in Q1 2026 was not called out as resolved; instead, rose sharply to $142.4 million, driven primarily by acquired Flushing assets rather than organic deterioration.
The declined to 10.72% from 10.75% in the prior quarter, as the $225 million Warburg Pincus investment partially offset the capital impact of the merger and the loan sale loss.
The restructuring of residential loan originations, which incurred $11.5 million in charges in FY 2025, appears complete, with no new restructuring costs reported this quarter.
What to watch
Whether the can hold at 3.05% or expand further now that the higher-yielding Flushing loan portfolio is fully on the books and deposit costs remain flat at 2.06%.
The resolution of the $142.4 million in , particularly whether the $53.8 million in acquired non-performing loans and the $20.7 million non-performing investment result in charge-offs or can be resolved without material loss.
Whether the elevated operating expense run rate, which included $42.8 million in merger costs this quarter, normalizes in the second half of 2026 and reveals the underlying efficiency of the combined entity.
The trajectory of the , which at 10.72% remains above regulatory minimums but has declined from 11.31% a year ago, and whether further balance sheet repositioning or share repurchases pressure capital.
expanded to 3.05% from 2.91% a year ago, benefiting from asset repricing and higher-yielding acquired loans, while the total cost of deposits remained flat at 2.06%.
The company reported a net loss of $3.0M, or $0.04 per share, primarily due to $42.8M in merger-related expenses and a $1.31B multifamily loan sale at a loss, which repositioned the balance sheet.
Total assets nearly doubled to $23.27B following the Flushing acquisition, which added $8.69B in assets, $6.19B in loans, and $7.44B in deposits.
surged to $142.4M from $38.1M at year-end, largely due to $53.8M in acquired non-performing loans and a $20.7M non-performing investment from Flushing.
Capital ratios remain strong with a Common Equity Tier 1 ratio of 10.72%, supported by a $225M strategic equity investment from Warburg Pincus concurrent with the merger.
Quantitative and Qualitative Disclosures About Market Risk
The company is modestly liability-sensitive, with rising-rate EVE and NII risk increasing from year-end 2025 to mid-2026.
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Primary market risk is interest rate risk (IRR) from lending, investing, deposit-taking, and funding activities.
IRR is managed via an Asset Liability Committee (ALCO) and strategies including loan structuring, deposit mix, and derivatives (swaps, caps, floors, collars).
Sensitivity is measured by and 12-month under rate shocks.
At June 30, 2026, a +300bps shock reduces EVE by 13.2% and by 13.5%, versus -6.6% and -2.5% at year-end 2025.
Increased sensitivity reflects the addition of Flushing loans and deposits, redeployment of loan sale proceeds into securities, and use of interest rate collars.
The model assumes a static balance sheet, uniform yield-curve shifts, and historical prepayment data, and does not forecast precise future impacts.
The Company and the Bank are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings in the aggregate are believed by management to be immaterial to the Company’s financial co…
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The Company and the Bank are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings in the aggregate are believed by management to be immaterial to the Company’s financial condition or results of operations.
For a summary of risk factors relevant to the Company, see Part I, Item 1A, “Risk Factors,” in the 2025 Form 10-K. There have been no material changes to risk factors relevant to the Company’s operations since December 31, 2025. Additional risks not presently known to the Compan…
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For a summary of risk factors relevant to the Company, see Part I, Item 1A, “Risk Factors,” in the 2025 Form 10-K. There have been no material changes to risk factors relevant to the Company’s operations since December 31, 2025. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also adversely affect the business, financial condition or results of operations.