Oceanfirst Financial Reports Net Loss Following Flushing Financial Acquisition
The company reported a net loss of $3.0 million for the second quarter of 2026.
Oceanfirst Financial (OCFC) reported a net loss of $3.0 million, or $0.04 per diluted share, for the second quarter of 2026. The bank, a regional financial services provider, swung to a loss from a net income of $16.2 million in the second quarter of 2025 and $20.5 million in the first quarter of 2026.
The results followed the June 1, 2026, completion of the acquisition of Flushing Financial Corporation. The transaction added $8.69 billion to total assets, $6.19 billion to loans, and $7.44 billion to deposits. To manage commercial real estate concentration, the company sold $1.31 billion of multifamily loans from the Flushing acquisition, which reduced its concentration by approximately 50 percentage points to 381%.
Core earnings rose to $30.5 million, or $0.43 per diluted share, from $17.7 million in the second quarter of 2025 and $24.3 million in the first quarter of 2026. Net interest income increased by $24.3 million to $120.7 million compared to $96.4 million in the prior quarter. The net interest margin expanded 12 basis points to 3.05% from 2.93% in the first quarter of 2026 and 2.91% in the second quarter of 2025.
Operating expenses rose to $129.9 million from $71.5 million in the second quarter of 2025. This increase was due to $42.8 million in non-recurring merger-related expenses. Consequently, the efficiency ratio deteriorated to 98.88% from 71.13% in the first quarter of 2026 and 71.93% in the second quarter of 2025, though the core efficiency ratio remained stable at 66.20% compared to 66.76% in the prior quarter.
Credit quality metrics shifted following the merger. Non-performing loans increased to $108.2 million, or 0.67% of total loans, from $27.8 million, or 0.25% of total loans, as of December 31, 2025. The allowance for loan credit losses rose to 1.29% of total loans from 0.76% at the end of 2025.
As of June 30, 2026, the loan-to-deposit ratio fell to 91.6% from 100.6% as of December 31, 2025. Book value per common share decreased to $24.50 from $28.97, and tangible book value per common share fell to $18.19 from $19.79 over the same period.
The company received a $225 million strategic investment from affiliates of funds managed by Warburg in exchange for common and NVCE stock and warrants.