OceanFirst Forecasts 1% to 2% Quarterly Loan and Deposit Growth

OceanFirst Financial Corp. expects loans and deposits to grow 1% to 2% per quarter in the near term as savings from its Flushing Financial integration begin to reduce expenses.

Chief Financial Officer Patrick Barrett gave the growth outlook on Oct. 28. “We expect modest growth in both loans and deposits in the near term, 1% to 2% quarterly,” Barrett said.

OceanFirst’s outlook projects loan growth of about 1% to 2% in each of Q4 2026 and Q1 2027, with deposits expected to grow in line with loans. The bank projected operating expenses of about $110 million in Q4 and $105 million in Q1 2027. Savings are expected to begin lowering expenses in Q4, with the full cost-savings run rate projected for Q1 2027.

Loans increased $215.7 million from June 30 to $16.491 billion at Sept. 30. Deposits rose $319.3 million over the same period to $18.079 billion.

The quarter was OceanFirst’s first full one including Flushing’s operations after the acquisition closed June 1. Core system conversion and integration activities were completed in September.

OceanFirst reported third-quarter diluted GAAP earnings of $0.17 per share and core diluted earnings of $0.48 per share. The quarter included $29.4 million after tax, or $0.30 per share, in nonrecurring merger expenses.

Net interest margin was 3.18%, including a $5.5 million nonrecurring interest benefit from payoffs of assets acquired from Flushing. Excluding that recovery, Barrett put the margin at 3.08%. OceanFirst’s Q4 outlook calls for net interest margin to be stable to modestly higher, subject to growth and the recovery adjustment.