OceanFirst Financial Corp. Announces Enhanced Quarterly Profitability and Continuation of Dividend


TOMS RIVER, N.J., Oct. 25, 2007 (PRIME NEWSWIRE) -- OceanFirst Financial Corp. (Nasdaq:OCFC), the holding company for OceanFirst Bank, today announced that diluted earnings per share for the quarter ended September 30, 2007 rose to $.27 from the $.02 earned the previous quarter. The earnings for the corresponding prior year period were $.42. For the nine months ended September 30, 2007 the loss per share was $.18 as compared to diluted earnings per share of $1.18 for the corresponding prior year period. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $.20 per share - covering the three month period ended September 30, 2007 - to be paid on November 16, 2007, to shareholders of record on November 2, 2007.

During the second quarter, the Bank decided to discontinue operations at the Westchester County, New York office of Columbia Home Loans, LLC ("Columbia"), the Bank's mortgage banking subsidiary. During the third quarter, the Bank determined to completely shutter all of Columbia's loan origination activity by discontinuing the two remaining small loan production offices. The Bank is retaining Columbia's loan servicing portfolio. This planned shutdown was the result of the significant operating losses incurred by Columbia in the first two quarters of the year related to their origination of subprime mortgage loans. For the three and nine months ended September 30, 2007, Columbia recorded a net loss of $1.1 million and $13.6 million, respectively. Absent the closure, the Company expected Columbia to continue to incur operating losses for the foreseeable future. The elimination of Columbia's Westchester Headquarters operation was completed just prior to September 30, 2007. The planned shutdown of the two smaller loan production offices are expected to be completed by December 31, 2007. A portion of the revenue and expenses related to the retained loan servicing portfolio are expected to continue.

Discussing the results, CEO John R. Garbarino commented on the improved profitability as compared to the previous two quarters and expressed confidence that the previous subprime lending losses at Columbia had been recognized, contained and provided for. "The Company's strengthening profitability over the past three months demonstrates the resilience of our core banking operations after dealing with and accounting for the Columbia subprime losses." Mr. Garbarino continued, "I am also pleased to note the turnaround and expansion of our net interest margin during the quarter and to acknowledge our forty-third consecutive quarterly cash dividend, reflective of our confidence in the future performance of the Company."

Results of Operations

Net interest income for the three and nine months ended September 30, 2007 decreased to $12.8 million and $39.9 million, respectively, as compared to $14.5 million and $44.3 million, respectively, in the same prior year periods, reflecting a lower net interest margin and lower levels of average interest-earning assets. The net interest margin decreased to 2.76% and 2.78%, respectively, for the three and nine months ended September 30, 2007 from 2.89% and 3.03%, respectively, in the same prior year periods. The yield on interest-earning assets increased to 6.07% for both the three and nine months ended September 30, 2007, as compared to 6.06% and 5.93%, respectively, for the same prior year periods. The cost of interest-bearing liabilities increased, however, to 3.61% and 3.59%, respectively, for the three and nine months ended September 30, 2007, as compared to 3.47% and 3.18%, respectively, in the same prior year periods. Average interest-earning assets decreased by $139.9 million and $35.5 million, respectively, for the three and nine months ended September 30, 2007, as compared to the same prior year periods, partly reflective of the discontinuance of Columbia's mortgage banking operations.

Other income decreased to income of $4.6 million for the three months ended September 30, 2007 and a loss of $1.6 million for the nine months ended September 30, 2007, as compared to income of $6.6 million and $17.6 million, respectively, in the same prior year periods. For the three and nine months ended September 30, 2007, the Company recorded a gain of $1.2 million and a loss of $11.7 million, respectively, on the sale of loans and lower of cost or market adjustment, as compared to gains of $3.5 million and $8.5 million, respectively, in the same prior year periods. The loss for the nine months ended September 30, 2007 relates to the subprime mortgage loans originated by Columbia which were unable to be sold as planned and remained in inventory through the first quarter. Columbia was able to subsequently sell most of these loans in a bulk sale transaction during the second quarter. Included in the bulk sale were subprime loans with a stated principal balance of $42.6 million for which Columbia recognized a loss on sale, net of reserves, of $1.3 million. Additionally, included in the loss on sale of loans for the nine months ended September 30, 2007 are mark-to-market charges of $9.4 million incurred by Columbia to reduce loans held for sale to their current fair market value. There were no mark-to-market charges incurred for the three months ended September 30, 2007.

Columbia has also established a reserve for repurchased loans to account for Columbia's obligation to repurchase loans which experienced an "early payment default," defined as the failure by the borrower to make a payment within a designated period early in the loan term. In July 2006, Columbia renegotiated and tightened investor loan sale agreements to generally define early payment default as the failure of the borrower to make the first payment following sale of the loan. In addition to early payment defaults, Columbia must also repurchase a loan in the event of a breach of a representation or warranty or a misrepresentation during the loan origination process. The early payment defaults primarily relate to subprime mortgage loans, especially those with 100% financing relative to the value of the underlying property. In March 2007, the Company discontinued the origination of all subprime loans. The reserve for repurchased loans, which is included in other liabilities in the Company's consolidated statement of financial condition, was $2.8 million at September 30, 2007 and outstanding loan repurchase requests totaled $618,000 at the same date. The reserve for repurchased loans is established to provide for expected losses related to outstanding loan repurchase requests and additional repurchase requests which may be received on loans previously sold to investors. For the quarter ended September 30, 2007, the Company recognized a reversal of the provision for repurchased loans of $200,000. For the nine months ended September 30, 2007 the provision for repurchased loans was $3.8 million which is included as part of the gain (loss) on sale of loans.

At September 30, 2007, the Company was holding subprime loans with a gross principal balance of $7.2 million and a carrying value, net of reserves and lower of cost or market adjustment, of $4.4 million.

Fees and service charges increased $265,000, or 9.9%, and $870,000, or 11.1%, for the three and nine months ended September 30, 2007, respectively, as compared to the same prior year period primarily related to increased fees from trust services and deposit accounts.

Operating expenses amounted to $12.6 million and $41.4 million, respectively, for the three and nine months ended September 30, 2007, as compared to $13.5 million and $40.2 million, respectively, for the corresponding prior year periods. The decrease in operating expenses for the three months ended September 30, 2007 as compared to the corresponding prior year period was due to the discontinuation of operations at Columbia and lower ESOP expense. These reductions were partly offset by the cost of new branches, higher professional fees and total severance costs at Columbia of $101,000. Additionally, occupancy expense for the three and nine months ended September 30, 2007 includes a $375,000 charge for lease termination costs at Columbia. For the nine months ended September 30, 2007 general and administrative expense includes $1.0 million relating to the write-off of the previously established goodwill on the August 2000 acquisition of Columbia.

Financial Condition

Mortgage loans held for sale decreased by $79.7 million at September 30, 2007 as compared to December 31, 2006 due to reduced loan origination volume at Columbia. Deposits decreased to $1,310.9 million at September 30, 2007 from $1,372.3 million at December 31, 2006 as the Bank moderated its pricing relating to certificates of deposit. Total Federal Home Loan Bank borrowings decreased by $80.0 million to $384.5 million at September 30, 2007, as compared to $464.5 million at December 31, 2006 due to the lower loan balances. Additionally, during the quarter ended June 30, 2007, the Company issued $10.0 million of Trust Preferred Securities to provide additional liquidity at the holding company.

Stockholders' equity decreased by $8.7 million to $123.6 million at September 30, 2007, as compared to $132.3 million at December 31, 2006. For the nine months ended September 30, 2007, 49,701 common shares were repurchased at a total cost of $1.1 million. All of these shares were repurchased in the first quarter of 2007. Under the 5% repurchase program authorized by the Board of Directors in July 2006, 489,062 shares remain to be purchased as of September 30, 2007. Stockholders' equity was further reduced by the net loss and cash dividend payments.

Asset Quality

The Company's non-performing assets totaled $9.6 million at September 30, 2007, an increase from $4.8 million at December 31, 2006. The increase was primarily due to the subprime loans now held by the Company. The September 30, 2007 amount includes $887,000 of loans repurchased by Columbia due to early payment default which were written down to market value on the date of repurchase and $3.3 million of loans previously held-for-sale which were written down to market value at March 31, 2007. For the nine months ended September 30, 2007 the Company realized a net loan charge-off of $76,000.

Conference Call

As previously announced, the Company will host an earnings conference call on Thursday, October 25, 2007 at 11:00 a.m. Eastern time. The direct dial number for the call is (877) 407-8035. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877)660-6853, Account #286, Conference ID#257827, from one hour after the end of the call until midnight on November 1, 2007.

OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered stock savings bank with $1.9 billion in assets and twenty branches located in Ocean, Monmouth and Middlesex counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.'s press releases are available at no charge by visiting us on the worldwide web at http://www.oceanfirst.com.

Forward-Looking Statements

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake - and specifically disclaims any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.



                     OceanFirst Financial Corp.
          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
         (dollars in thousands, except per share amounts)

                                September 30, December 31, September 30,
                                    2007         2006          2006
                                 -----------  -----------  -----------
                                 (Unaudited)               (Unaudited)
 ASSETS
 ------
 Cash and due from banks          $   29,456  $   32,204   $   36,967
 Investment securities
   available for sale                 58,133      82,384       82,050
 Federal Home Loan Bank
  of New York stock, at cost          22,040      25,346       24,634
 Mortgage-backed securities
  available for sale                  58,285      68,369       71,692
 Loans receivable, net             1,678,937   1,701,425    1,714,760
 Mortgage loans held for sale          3,244      82,943       62,206
 Interest and
  dividends receivable                 8,357       8,083        8,366
 Real estate owned, net                  433         288          288
 Premises and equipment, net          17,372      18,196       17,722
 Servicing asset                       9,340       9,787        9,565
 Bank Owned Life Insurance            38,087      37,145       36,842
 Intangible Assets                        23       1,114        1,195
 Other assets                         13,123       9,718        6,877
                                  ----------- -----------  -----------
       Total assets               $1,936,830  $2,077,002   $2,073,164
                                  =========== ===========  ===========
 LIABILITIES AND
  STOCKHOLDERS' EQUITY
  --------------------
 Deposits                         $1,310,941  $1,372,328   $1,371,738
 Securities sold under
  agreements to repurchase
  with retail customers               69,742      50,982       55,050
 Securities sold under
  agreements to repurchase
  with the Federal Home Loan Bank     13,000      34,000       34,000
 Federal Home Loan Bank advances     371,500     430,500      428,200
 Other borrowings                     27,500      17,500       17,500
 Advances by borrowers
  for taxes and insurance              8,247       7,743        8,788
 Other liabilities                    12,329      31,629       20,878
                                  ----------- -----------  -----------
       Total liabilities           1,813,259   1,944,682    1,936,154
                                  ----------- -----------  -----------
 Stockholders' equity:
   Preferred stock, $.01 par value,
    5,000,000 shares authorized,
    no shares issued                      --          --           --
   Common stock, $.01 par value,
    55,000,000 shares authorized,
    27,177,372 shares issued and
    12,341,915, 12,262,307, and
    12,349,245 shares outstanding
    at September 30, 2007,
    December 31, 2006 and
    September 30, 2006,
    respectively                         272         272          272
   Additional paid-in capital        203,237     201,936      201,319
   Retained earnings                 154,317     164,121      168,069
   Accumulated other
    comprehensive loss                (2,704)       (470)        (869)

   Less: Unallocated common stock
          held by Employee Stock
          Ownership Plan              (5,612)     (6,369)      (6,645)
         Treasury stock,
          14,835,457,
          14,915,065 and
          14,828,127
          shares at
          September 30, 2007,
          December 31, 2006 and
          September 30, 2006,
          respectively              (225,939)   (227,170)    (225,136)

   Common stock acquired
    by Deferred
    Compensation Plan                  1,406       1,457        1,517

   Deferred Compensation
    Plan Liability                    (1,406)     (1,457)      (1,517)
                                  ----------- -----------  -----------
         Total stockholders'
          equity                     123,571     132,320      137,010
                                  ----------- ----------   -----------
         Total liabilities
          and stockholders'
          equity                  $1,936,830  $2,077,002   $2,073,164
                                  =========== ===========  ===========



                 OceanFirst Financial Corp.
            CONSOLIDATED STATEMENTS OF OPERATIONS
           (in thousands, except per share amounts)

                                        For the          For the
                                     three months      nine months
                                         ended             ended
                                     September 30,     September 30,
                                   ----------------- -----------------
                                     2007     2006     2007     2006
                                    ---------------- -----------------
                                       (Unaudited)       (Unaudited)
 Interest income:
   Loans                           $25,945  $27,825  $79,528  $79,051
   Mortgage-backed securities          688      812    2,127    2,518
   Investment securities and other   1,590    1,679    5,494    5,102
                                   -------- -------- -------- --------
     Total interest income          28,223   30,316   87,149   86,671
                                   -------- -------- -------- --------
 Interest expense:
   Deposits                          9,326    8,939   27,778   24,040
   Borrowed funds                    6,066    6,918   19,431   18,343
                                   -------- -------- -------- --------
     Total interest expense         15,392   15,857   47,209   42,383
                                   -------- -------- -------- --------
     Net interest income            12,831   14,459   39,940   44,288

 Provision for loan losses              75       50      525      100
                                   -------- -------- -------- --------
     Net interest income after
      provision for loan losses     12,756   14,409   39,415   44,188
                                   -------- -------- -------- --------
 Other income (loss):
   Loan servicing income               126      136      356      408
   Fees and service charges          2,942    2,677    8,724    7,854
   Net gain (loss) and lower
    of cost or market
    adjustment on sales of
    loans and securities
    available for sale               1,156    3,515  (11,676)   8,474
   Net income (loss) from
    other real estate operations         8      (60)      27      (60)
   Income from Bank Owned Life
    Insurance                          324      291      942      840
   Other                                 6       44       41       55
                                   -------- -------- -------- --------
     Total other income (loss)       4,562    6,603   (1,586)  17,571
                                   -------- -------- -------- --------

 Operating expenses:
   Compensation and
    employee benefits                6,755    7,497   22,227   22,752
   Occupancy                         1,569    1,244    4,028    3,564
   Equipment                           543      767    1,631    1,975
   Marketing                           359      531    1,046    1,230
   Federal deposit insurance           168      133      444      400
   Data processing                     859      859    2,625    2,569
   General and administrative        2,357    2,483    9,444    7,735
                                   -------- -------- -------- --------
     Total operating expenses       12,610   13,514   41,445   40,225
                                   -------- -------- -------- --------
     Income (loss) before provision
      (benefit) for income taxes     4,708    7,498   (3,616)  21,534
  Provision (benefit) for
   income taxes                      1,582    2,592   (1,597)   7,461
                                   -------- -------- -------- --------
     Net income (loss)             $ 3,126  $ 4,906  $(2,019) $14,073
                                   ======== ======== ======== ========

 Basic earnings (loss)
  per share                        $  0.27  $  0.43  $ (0.18) $  1.22
                                   ======== ======== ======== ========
 Diluted earnings (loss)
  per share                        $  0.27  $  0.42  $ (0.18) $  1.18
                                   ======== ======== ======== ========
 Average basic shares
  outstanding                       11,561   11,465   11,522   11,567
                                   ======== ======== ======== ========
 Average diluted shares
  outstanding                       11,643   11,689   11,522   11,880
                                   ======== ======== ======== ========



                       OceanFirst Financial Corp.
                   SELECTED CONSOLIDATED FINANCIAL DATA
                  (in thousands, except per share amounts)

                                             At        At        At 
                                          Sept. 30, Dec. 31,  Sept. 30,
                                            2007      2006      2006
                                          --------  --------  --------

 STOCKHOLDERS' EQUITY
 --------------------
 Stockholders' equity to total assets        6.38%     6.37%     6.61%
 Common shares outstanding (in thousands)  12,342    12,262    12,349
 Stockholders' equity per common share    $ 10.01   $ 10.79   $ 11.09
 Tangible stockholders' equity                              
  per common share                          10.01     10.70     11.00
                                                            
 ASSET QUALITY                                              
 -------------                                                           
 Allowance for loan losses                $10,687   $10,238   $10,411
 Nonperforming loans                        9,162     4,525     3,699
 Nonperforming assets                       9,595     4,813     3,987
 Allowance for loan losses                                  
  as a percent of total loans receivable     0.63%     0.57%     0.58%
 Allowance for loan losses                                  
  as a percent of nonperforming loans      116.64    226.25    281.45
 Nonperforming loans                                        
  as a percent of total loans receivable     0.54      0.25      0.21
 Nonperforming assets as a percent                                
  of total assets                            0.50      0.23      0.19



                                        For the           For the
                                  three months ended nine months ended
                                     September 30,     September 30,
                                  ------------------ -----------------
                                     2007     2006     2007      2006
                                   -------  -------  -------   -------
 PERFORMANCE RATIOS (ANNUALIZED)
 -------------------------------
 Return on average assets            0.64%    0.94%   (0.13)%    0.92%
 Return on average
  stockholders' equity              10.19    14.79    (2.14)    14.00
 Interest rate spread                2.46     2.59     2.48      2.75
 Interest rate margin                2.76     2.89     2.78      3.03
 Operating expenses to
  average assets                     2.57     2.58     2.74      2.62
 Efficiency ratio                   72.50    64.16   108.06     65.03



                        OceanFirst Financial Corp.
                     SELECTED LOAN AND DEPOSIT DATA
                             (in thousands)

 LOANS RECEIVABLE
 ----------------
                                            At Sept. 30,   At Dec. 31,
                                                2007          2006
                                            -----------   ------------
 Real estate:
   One- to four-family                      $1,104,566    $ 1,231,716
   Commercial real estate, multi-
    family and land                            317,080        306,288
   Construction                                 14,172         13,475
 Consumer                                      209,232        190,029
 Commercial                                     46,532         49,693
                                            -----------   ------------
      Total loans                            1,691,582      1,791,201

   Loans in process                             (3,883)        (2,318)
   Deferred origination costs, net               5,169          5,723
   Allowance for loan losses                   (10,687)       (10,238)
      Total loans, net                       1,682,181      1,784,368

 Less: mortgage loans held for sale              3,244         82,943
                                            -----------   ------------
      Loans receivable, net                 $1,678,937    $ 1,701,425
                                            ===========   ============

 Mortgage loans serviced for others         $1,036,346    $   992,658
 Loan pipeline                                  93,793        294,646



                               For the                For the
                         three months ended       nine months ended
                             September 30,           September 30,
                         --------------------    --------------------
                           2007        2006        2007        2006
                         --------    --------    --------    --------
 Loan originations       $123,677    $331,465    $570,236    $926,105
 Loans sold                63,991     245,658     359,802     505,457
 Net charge-offs                7         326          76         150



 DEPOSITS
 --------
                                            At Sept. 30,   At Dec. 31,
 Type of Account                                2007          2006
 ---------------                            -----------   ------------
 Non-interest bearing                       $  113,488     $  114,950
 Interest-bearing checking                     442,195        408,666
 Money market deposit                           86,442        105,571
 Savings                                       193,872        200,544
 Time deposits                                 474,944        542,597
                                            -----------    -----------
                                            $1,310,941     $1,372,328
                                            ===========    ===========



                   OceanFirst Financial Corp.
                ANALYSIS OF NET INTEREST INCOME

                             FOR THE QUARTERS ENDED SEPTEMBER 30,
                   ---------------------------------------------------
                               2007                      2006
                   -------------------------- ------------------------
                                     AVERAGE                   AVERAGE
                     AVERAGE          YIELD/  AVERAGE           YIELD/
                     BALANCE INTEREST COST    BALANCE INTEREST   COST
                   ---------------------------------------------------
                                   (Dollars in thousands)
 Assets
 Interest-earnings
  assets:
   Interest-earning
    deposits and
    short-term
    investments    $   17,191 $   217  5.05% $    8,960 $   117  5.22%
 Investment
  securities (1)       62,836     895  5.70      83,917   1,212  5.78
   FHLB stock          22,432     478  8.52      25,940     350  5.40
   Mortgage-backed
    securities (1)     60,539     688  4.55      74,679     812  4.35
   Loans
    receivable,
    net (2)         1,696,679  25,945  6.12   1,806,060  27,825  6.16
                   ---------- ------- ------ ---------- ------- ------
     Total
      interest
      -earning
      assets        1,859,677  28,223  6.07   1,999,556  30,316  6.06
                              ------- ------            ------- ------
 Non-interest
  -earning assets     102,284                    99,144
                   ----------                ----------
     Total assets  $1,961,961                $2,098,700
                   ==========                ==========
 Liabilities and
  Stockholders'
  Equity
 Interest
  -bearing
  liabilities:
   Transaction
    deposits       $  727,233   3,837  2.11  $  703,986   3,039  1.73
   Time deposits      488,688   5,489  4.49     557,093   5,900  4.24
                   ---------- ------- ------ ---------- ------- ------
     Total          1,215,921   9,326  3.07   1,261,079   8,939  2.84
   Borrowed funds     489,662   6,066  4.96     567,003   6,918  4.88
                   ---------- ------- ------ ---------- ------- ------
     Total
      interest
      -bearing
      liabilities   1,705,583  15,392  3.61   1,828,082  15,857  3.47
                              ------- ------            ------- ------
 Non-interest
  -bearing
  deposits            116,895                   124,998
 Non-interest
  -bearing
  liabilities          16,834                    12,896
                   ----------                ---------- 
     Total
      liabilities   1,839,312                 1,965,976
 Stockholders'
  equity              122,649                   132,724
                   ----------                ----------
     Total
      liabilities
      and
      stockholders'
      equity       $1,961,961                $2,098,700
                   ==========                ==========

 Net interest
  income                      $12,831                   $14,459
                              =======                   =======
 Net interest
  rate
  spread (3)                           2.46%                     2.59%
                                      ======                    ======
 Net interest
  margin (4)                           2.76%                     2.89%
                                      ======                    ======



                          FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                   ---------------------------------------------------
                               2007                      2006
                   -------------------------- ------------------------
                                     AVERAGE                   AVERAGE
                     AVERAGE          YIELD/  AVERAGE           YIELD/
                     BALANCE INTEREST COST    BALANCE INTEREST   COST
                   ---------------------------------------------------
                                  (Dollars in thousands)
 Assets
 Interest-earnings
  assets:
   Interest
    -earning
    deposits and
    short-term
    investments    $   11,212 $   430  5.11% $    8,706 $   315  4.82%
   Investment
    securities (1)     69,980   3,661  6.98      84,480   3,880  6.12
   FHLB stock          24,575   1,403  7.61      24,289     907  4.98
   Mortgage-backed
    securities (1)     63,912   2,127  4.44      79,506   2,518  4.22
   Loans receivable,
    net (2)         1,743,488  79,528  6.08   1,751,643  79,051  6.02
                   ---------- ------- ------ ---------- ------- ------
     Total
      interest
      -earning
      assets        1,913,167  87,149  6.07   1,948,624  86,671  5.93
                              ------- ------            ------- ------
 Non-interest
  -earning assets     101,345                    96,516
                   ----------                ----------
     Total assets  $2,014,512                $2,045,140
                   ==========                ==========
 Liabilities and
  Stockholders'
  Equity
 Interest
  -bearing
  liabilities:
   Transaction
    deposits       $  723,194  11,116  2.05  $  717,194   8,544  1.59
   Time deposits      501,697  16,662  4.43     531,557  15,496  3.89
                   ---------- ------- ------ ---------- ------- ------
     Total          1,224,891  27,778  3.02   1,248,751  24,040  2.57
   Borrowed funds     529,584  19,431  4.89     526,266  18,343  4.65
                   ---------- ------- ------ ---------- ------- ------
     Total
      interest
      -bearing
      liabilities   1,754,475  47,209  3.59   1,775,017  42,383  3.18
                              ------- ------            ------- ------
 Non-interest
  -bearing
  deposits            115,299                   124,508
 Non-interest
  -bearing
   liabilities         19,153                    11,563
                   ----------                ---------- 
     Total
      liabilities   1,888,927                 1,911,088
 Stockholders'
  equity              125,585                   134,052
                   ----------                ---------- 
     Total
      liabilities
      and
      stockholders'
      equity       $2,014,512                $2,045,140
                   ==========                ==========
 Net interest
  income                      $39,940                   $44,288
                              =======                   =======
 Net interest
  rate
  spread (3)                           2.48%                     2.75%
                                      ======                    ======
 Net interest
  margin (4)                           2.78%                     3.03%
                                      ======                    ======

      (1) Amounts are recorded at average amortized cost.
      (2) Amount is net of deferred loan fees, undisbursed loan funds,
          discounts and premiums and estimated loss allowances and
          includes loans held for sale and non-performing loans.
      (3) Net interest rate spread represents the difference between
          the yield on interest-earning assets and the cost of
          interest-bearing liabilities.
      (4) Net interest margin represents net interest income divided
          by average interest-earning assets.


            

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