8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 19, 2006

OCEANFIRST FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Delaware	0-27428	22-3412577
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employer Identification No.)

975 HOOPER AVENUE, TOMS RIVER, NEW JERSEY 08753

(Address of principal executive offices, including zip code)

(732)240-4500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 140.13e-4(c))

ITEM 2.02 RESULTS OF OPERATION AND FINANCIAL CONDITION

On October 19, 2006, OceanFirst Financial Corp. (the “Company”) announced its financial results for the three and nine months ended September 30, 2006. For more information, reference is made to the Company’s press release dated October 19, 2006, a copy of which is attached to this Report as Exhibit 99.1 and is furnished herewith.

ITEM 8.01 OTHER EVENTS

On October 19, 2006, the Company announced that the Company’s Board of Directors has declared a regular quarterly cash dividend on the Company’s outstanding common stock. The cash dividend will be in the amount of $0.20 per share and will be payable on November 10, 2006 to the stockholders of record at the close of business on October 27, 2006. For more information, reference is made to the Company’s press release dated October 19, 2006, a copy of which is attached to this Report as Exhibit 99.1 and is furnished herewith.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) The following exhibits are filed herewith:

Exhibit 99.1 Press Release dated October 19, 2006

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OCEANFIRST FINANCIAL CORP.

/S/ Michael Fitzpatrick

Michael Fitzpatrick

Executive Vice President and Chief Financial Officer

Dated: October 20, 2006

EX-99.1

Exhibit 99.1

Company:

Michael J. Fitzpatrick

Chief Financial Officer

OceanFirst Financial Corp.

Tel: (732)240-4500, ext. 7506

Fax: (732)349-5070

email:Mfitzpatrick@oceanfirst.com

FOR IMMEDIATE RELEASE

OceanFirst Financial Corp.

ANNOUNCES INCREASE IN QUARTERLY EARNINGS

AND CONTINUATION OF QUARTERLY DIVIDEND

TOMS RIVER, NEW JERSEY, October 19, 2006…OceanFirst Financial Corp. (NASDAQ:OCFC), the holding company for OceanFirst Bank, today announced that diluted earnings per share for the quarter ended September 30, 2006 increased to $.42 from $.40 for the corresponding prior year period and $.41 in the linked quarter. For the nine months ended September 30, 2006 diluted earnings per share was $1.18 as compared to $1.20 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, 2006—to be paid on November 10, 2006, to shareholders of record on October 27, 2006.

In making today’s announcement, John R. Garbarino, Chairman, President and Chief Executive Officer said, “We are pleased to report consecutive quarters of earnings growth achieved despite the adverse interest rate environment. I am also pleased to announce our thirty-ninth consecutive quarterly cash dividend reflective of consistent delivery of solid earnings into our tenth year as a public company.”

Results of Operations

Net interest income for the three and nine months ended September 30, 2006 decreased to $14.5 million and $44.3 million, respectively, as compared to $15.4 million and $45.5 million, respectively, in the same prior year periods, reflecting a lower net interest margin partly offset by higher levels of interest-earning assets. The net interest margin decreased to 2.89% and 3.03%, respectively, for the three and nine months ended September 30, 2006 from 3.28% and 3.32%, respectively, in the same prior year periods. The yield on interest-earning assets increased to 6.06% and 5.93%, respectively, for the three and nine months ended September 30, 2006, as compared to 5.61% and 5.50%, respectively, for the same prior year periods. The cost of interest-bearing liabilities increased to 3.47% and 3.18%, respectively, for the three and nine months ended September 30, 2006, as compared to 2.57% and 2.41%, respectively, in the same prior year periods. The increased cost of interest-bearing liabilities is due to the continued increase of interest rates on the short-term end of the yield curve and intensified competition for deposits. Since September 30, 2005 the Board of Governors of the Federal Reserve increased the federal funds borrowing rate 6 times for a total of 150 basis points. Average interest-earning assets increased by $121.4 million and $118.3 million, respectively, for the three and nine months ended September 30, 2006, as compared to the same prior year periods. The growth was concentrated in average loans receivable which grew $142.9 million, or 8.6%, for the three months ended September 30, 2006, as compared to the same prior year period. For the nine months ended September 30, 2006 average loans receivable increased $151.1 million, or 9.4%, as compared to the same prior year period. The loan growth was funded by average borrowed funds which grew $107.3 million and average interest-bearing deposits which grew $22.2 million for the three months ended September 30, 2006, as compared to the same prior year period. For the nine months ended September 30, 2006, average borrowed funds increased $77.5 million and average interest-bearing deposits increased $35.6 million as compared to the same prior year period.

Other income amounted to $6.6 million and $17.6 million for the three and nine months ended September 30, 2006, respectively, as compared to $6.3 million and $18.1 million, respectively, in the same prior year periods. For the three and nine months ended September 30, 2006, the Company recorded gains of $3.5 million and $8.5 million, respectively, on the sale of loans, as compared to gains of $3.5 million and $10.1 million, respectively, in the same prior year periods. Loans sold for the three month period ended September 30, 2006 increased to $245.7 million from $212.4 million in the same prior year period. Loans sold for the nine month period ended September 30, 2006 decreased to $505.5 million from $538.7 million in the same prior year period. Most of the decline in sales volume for the nine month period ended September 30, 2006 occurred at the Company’s mortgage banking subsidiary, Columbia Home Loans, LLC during the first quarter of 2006. The decline experienced by Columbia in the first quarter of 2006 was partly reflective of declines experienced industry-wide. Additionally, staff turnover in the wholesale alternative credit channel adversely affected sales volume. In light of the continuing pressure on volume and margins, Columbia implemented plans to consolidate lending channels to a more centralized platform designed to improve efficiency and reduce operating costs. The consolidation also adversely impacted the volume of loan sales. During the second quarter of 2006 Columbia re-established the wholesale alternative credit channel and sales volume was restored to exceed prior year levels, for the second and third quarter. Fees and service charges increased $271,000, or 11.3%, and $878,000, or 12.6%, for the three and nine months ended September 30, 2006, respectively, as compared to the same prior year periods primarily related to fees from reverse mortgage loans, a new emphasis for the Company, as well as fees from title insurance and trust services.

Operating expenses decreased to $13.5 million and $40.2 million, respectively, for the three and nine months ended September 30, 2006, as compared to $14.2 million and $40.7 million, respectively, for the corresponding prior year periods. The decrease in operating expenses was due to reduced incentive plan accruals and loan related marketing expense reductions.

Financial Condition

Loans receivable net, increased by $60.2 million, a 4.9% annualized rate, at September 30, 2006 as compared to December 31, 2005. Deposits increased to $1,371.7 million at September 30, 2006 from $1,356.6 million at December 31, 2005. Federal Home Loan Bank borrowings increased $48.3 million at September 30, 2006 as compared to December 31, 2005 in order to fund loan growth. For the year-to-date, the holding company issued Trust Preferred Securities for $12.5 million, the proceeds of which were partly used to fund the Company’s continuing common stock repurchase program.

Stockholders’ equity decreased by $1.8 million to $137.0 million at September 30, 2006, as compared to $138.8 million at December 31, 2005. For the nine months ended September 30, 2006, 669,604 common shares were repurchased at a total cost of $15.3 million. Under the 5% repurchase program authorized by the Board of Directors in October 2005, 26,080 shares remained to be purchased as of September 30, 2006. A new repurchase program, the Company’s thirteenth, was announced on July 19, 2006. Under this 5% repurchase program, an additional 615,883 shares are available for repurchase. The reduction in stockholders’ equity due to common stock repurchases was partly offset by net income, proceeds from stock option exercises and related tax benefit, and Employee Stock Ownership Plan amortization.

Asset Quality

The Company’s non-performing assets totaled $4.0 million at September 30, 2006 as compared to $1.9 million at December 31, 2005. For the nine months ended September 30, 2006 the Company realized net loan charge-offs of $150,000 as compared to net loan charge-offs of $628,000 for the same prior year period.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, October 20, 2006 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 #215336, from one hour after the end of the call until midnight on Friday, October 27, 2006.

OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered stock savings bank with $2.1 billion in assets and nineteen 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 Board of Governors of the Federal Reserve System, 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, 2006			December 31, 2005			September 30, 2005
	(Unaudited)						(Unaudited)
ASSETS
Cash and due from banks	$	36,967		$	31,108		$	31,614
Investment securities available for sale		82,050			83,861			84,507
Federal Home Loan Bank of New York stock, at cost		24,634			21,792			19,450
Mortgage-backed securities available for sale		71,692			85,025			92,571
Loans receivable, net		1,714,760			1,654,544			1,618,304
Mortgage loans held for sale		62,206			32,044			66,240
Interest and dividends receivable		8,366			7,089			7,360
Real estate owned, net		288			278			278
Premises and equipment, net		17,722			16,118			15,521
Servicing asset		9,565			9,730			9,671
Bank Owned Life Insurance		36,842			36,002			35,846
Intangible Assets		1,195			1,272			1,298
Other assets		6,877			6,494			6,893
Total assets	$	2,073,164		$	1,985,357		$	1,989,553
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	1,371,738		$	1,356,568		$	1,369,414
Securities sold under agreements to repurchase with retail customers		55,050			54,289			67,727
Securities sold under agreements to repurchase with the Federal Home Loan Bank		34,000			59,000			59,000
Federal Home Loan Bank advances		428,200			354,900			330,000
Other borrowings		17,500			5,000			5,000
Advances by borrowers for taxes and insurance		8,788			7,699			8,517
Other liabilities		20,878			9,117			13,359
Total liabilities		1,936,154			1,846,573			1,853,017
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 12,349,245, 12,698,505, and 12,720,732 shares outstanding at September 30, 2006, December 31, 2005 and September 30, 2005, respectively		272			272			272
Additional paid-in capital		201,319			197,621			196,924
Retained earnings		168,069			164,613			162,450
Accumulated other comprehensive loss		(869	)		(1,223	)		(1,256	)
Less: Unallocated common stock held by Employee Stock Ownership Plan		(6,645	)		(7,472	)		(7,766	)
Treasury stock, 14,828,127, 14,478,867, and 14,456,640 shares at September 30, 2006, December 31, 2005 and September 30, 2005, respectively		(225,136	)		(215,027	)		(214,088	)
Common stock acquired by Deferred Compensation Plan		1,517			1,383			1,365
Deferred Compensation Plan Liability		(1,517	)		(1,383	)		(1,365	)
Total stockholders’ equity		137,010			138,784			136,536
Total liabilities and stockholders’ equity	$	2,073,164		$	1,985,357		$	1,989,553

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	For the three months ended September 30,					For the nine months ended September 30,
	2006			2005		2006			2005
	(Unaudited)					(Unaudited)
Interest income:
Loans	$	27,825		$	24,222	$	79,051		$	68,752
Mortgage-backed securities		812			897		2,518			2,959
Investment securities and other		1,679			1,209		5,102			3,799
Total interest income		30,316			26,328		86,671			75,510
Interest expense:
Deposits		8,939			6,056		24,040			16,074
Borrowed funds		6,918			4,862		18,343			13,921
Total interest expense		15,857			10,918		42,383			29,995
Net interest income		14,459			15,410		44,288			45,515
Provision for loan losses		50			100		100			350
Net interest income after provision for loan losses		14,409			15,310		44,188			45,165
Other income:
Loan servicing income		136			47		408			148
Fees and service charges		2,677			2,406		7,854			6,976
Net gain on sales of loans and securities available for sale		3,515			3,535		8,474			10,079
Net loss from other real estate operations		(60	)		—		(60	)		—
Income from Bank Owned Life Insurance		291			321		840			856
Other		44			5		55			47
Total other income		6,603			6,314		17,571			18,106
Operating expenses:
Compensation and employee benefits		7,497			8,206		22,752			23,219
Occupancy		1,244			1,109		3,564			3,284
Equipment		767			659		1,975			1,934
Marketing		531			750		1,230			2,213
Federal deposit insurance		133			126		400			379
Data processing		859			857		2,569			2,413
General and administrative		2,483			2,485		7,735			7,276
Total operating expenses		13,514			14,192		40,225			40,718
Income before provision for income taxes		7,498			7,432		21,534			22,553
Provision for income taxes		2,592			2,602		7,461			7,902
Net income	$	4,906		$	4,830	$	14,073		$	14,651
Basic earnings per share	$	0.43		$	0.41	$	1.22		$	1.24
Diluted earnings per share	$	0.42		$	0.40	$	1.18		$	1.20
Average basic shares outstanding		11,465			11,793		11,567			11,859
Average diluted shares outstanding		11,689			12,184		11,880			12,251
Cash earnings (1)	$	5,576		$	5,576	$	16,227		$	16,882
Diluted cash earnings per share	$	0.48		$	0.46	$	1.37		$	1.38

(1) Cash earnings are determined by adding (net of taxes) to reported earnings the non-cash expenses stemming from the amortization and appreciation of allocated shares in the company’s stock-related benefit plans and the amortization of intangible assets.

OceanFirst Financial Corp.

SELECTED CONSOLIDATED FINANCIAL DATA

(in thousands, except per share amounts)

	At September 30, 2006		At December 31, 2005		At September 30, 2005
STOCKHOLDERS’ EQUITY
Stockholders’ equity to total assets	6.61	%	6.99	%	6.86	%
Common shares outstanding (in thousands)	12,349		12,699		12,721
Stockholders’ equity per common share	$  11.09		$  10.93		$  10.73
Tangible stockholders’ equity per common share	11.00		10.83		10.63
ASSET QUALITY
Allowance for loan losses	$10,411		$10,460		$10,410
Nonperforming loans	3,699		1,595		1,424
Nonperforming assets	3,987		1,873		1,702
Allowance for loan losses as a percent of total loans receivable	0.58	%	0.62	%	0.61	%
Allowance for loan losses as a percent of nonperforming loans	281.45		655.80		731.04
Nonperforming loans as a percent of total loans receivable	0.21		0.09		0.08
Nonperforming assets as a percent of total assets	0.19		0.09		0.09

	For the three months ended September 30,				For the nine months ended September 30,
	2006		2005		2006		2005
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets	0.94	%	0.98	%	0.92	%	1.01	%
Return on average stockholders’ equity	14.79		14.33		14.00		14.47
Interest rate spread	2.59		3.04		2.75		3.09
Interest rate margin	2.89		3.28		3.03		3.32
Operating expenses to average assets	2.58		2.87		2.62		2.81
Efficiency ratio	64.16		65.33		65.03		64.00

CASH EARNINGS

Although reported earnings and return on stockholders’ equity are traditional measures of performance, the Company believes that the change in stockholders’ equity or “cash earnings,” and related return measures are also a significant measure of a company’s performance. Cash earnings exclude the effects of various non-cash expenses, such as the employee stock plans amortization expense and related tax benefit, as well as the amortization of intangible assets. The following table reconciles the Company’s net income with cash earnings. The table is a pro forma calculation which is not in accordance with GAAP.

	For the three months ended September 30,						For the nine months ended September 30,
	2006			2005			2006			2005
Net income	$	4,906		$	4,830		$	14,073		$	14,651
Add: Employee stock plans amortization Expense		771			832			2,490			2,526
Amortization of intangible assets		26			26			78			78
Less: Tax benefit (1)		(127	)		(112	)		(414	)		(373	)
Cash earnings	$	5,576		$	5,576		$	16,227		$	16,882
Basic cash earnings per share	$	0.49		$	0.47		$	1.40		$	1.42
Diluted cash earnings per share	$	0.48		$	0.46		$	1.37		$	1.38

⁽¹⁾ The Company does not receive any tax benefit for that portion of employee stock plan amortization expense relating to the ESOP fair market value adjustment.

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(in thousands)

LOANS RECEIVABLE

	At September 30, 2006			At December 31, 2005
Real estate:
One- to four-family	$	1,235,443		$	1,187,226
Commercial real estate, multi-family and land		302,149			281,585
Construction		18,690			22,739
Consumer		180,601			146,911
Commercial		48,509			61,637
Total loans		1,785,392			1,700,098
Loans in process		(3,644	)		(7,646	)
Deferred origination costs, net		5,629			4,596
Allowance for loan losses		(10,411	)		(10,460	)
Total loans, net		1,776,966			1,686,588
Less: mortgage loans held for sale		62,206			32,044
Loans receivable, net	$	1,714,760		$	1,654,544
Mortgage loans serviced for others	$	948,749		$	910,272
Loan pipeline		254,786			293,934

	For the three months ended September 30,				For the nine months ended September 30,
	2006		2005		2006		2005
Loan originations	$	331,465	$	368,427	$	926,105	$	1,015,606
Loans sold		245,658		212,392		505,457		538,700
Net charge-offs		326		204		150		628

DEPOSITS

	At September 30, 2006		At December 31, 2005
Type of Account
Non-interest bearing	$	122,714	$	120,188
Interest-bearing checking		385,390		381,787
Money market deposit		108,022		125,169
Savings		209,032		242,689
Time deposits		546,580		486,735
	$	1,371,738	$	1,356,568

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

	FOR THE QUARTERS ENDED SEPTEMBER 30,
	2006						2005
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST		AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and short-term investments	$	8,960	$	117	5.22	%	$	8,846	$	76	3.44	%
Investment securities (1)		83,917		1,212	5.78			85,978		887	4.13
FHLB stock		25,940		350	5.40			19,596		246	5.02
Mortgage-backed securities (1)		74,679		812	4.35			100,549		897	3.57
Loans receivable, net (2)		1,806,060		27,825	6.16			1,663,158		24,222	5.83
Total interest-earning assets		1,999,556		30,316	6.06			1,878,127		26,328	5.61
Non-interest-earning assets		99,144						99,493
Total assets	$	2,098,700					$	1,977,620
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	703,986		3,039	1.73		$	749,488		2,193	1.17
Time deposits		557,093		5,900	4.24			489,411		3,863	3.16
Total		1,261,079		8,939	2.84			1,238,899		6,056	1.96
Borrowed funds		567,003		6,918	4.88			459,736		4,862	4.23
Total interest-bearing liabilities		1,828,082		15,857	3.47			1,698,635		10,918	2.57
Non-interest-bearing deposits		124,998						127,718
Non-interest-bearing liabilities		12,896						16,468
Total liabilities		1,965,976						1,842,821
Stockholders’ equity		132,724						134,799
Total liabilities and stockholders’ equity	$	2,098,700					$	1,977,620
Net interest income			$	14,459					$	15,410
Net interest rate spread (3)					2.59	%					3.04	%
Net interest margin (4)					2.89	%					3.28	%

	FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2006						2005
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST		AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and short-term investments	$	8,706	$	315	4.82	%	$	12,231	$	269	2.93	%
Investment securities (1)		84,480		3,880	6.12			86,272		2,882	4.45
FHLB stock		24,289		907	4.98			19,921		648	4.34
Mortgage-backed securities (1)		79,506		2,518	4.22			111,288		2,959	3.55
Loans receivable, net (2)		1,751,643		79,051	6.02			1,600,564		68,752	5.73
Total interest-earning assets		1,948,624		86,671	5.93			1,830,276		75,510	5.50
Non-interest-earning assets		96,516						101,048
Total assets	$	2,045,140					$	1,931,324
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	717,194		8,544	1.59		$	733,548		5,526	1.00
Time deposits		531,557		15,496	3.89			479,624		10,548	2.93
Total		1,248,751		24,040	2.57			1,213,172		16,074	1.77
Borrowed funds		526,266		18,343	4.65			448,787		13,921	4.14
Total interest-bearing liabilities		1,775,017		42,383	3.18			1,661,959		29,995	2.41
Non-interest-bearing deposits		124,508						119,236
Non-interest-bearing liabilities		11,563						15,117
Total liabilities		1,911,088						1,796,312
Stockholders’ equity		134,052						135,012
Total liabilities and stockholders’ equity	$	2,045,140					$	1,931,324
Net interest income			$	44,288					$	45,515
Net interest rate spread (3)					2.75	%					3.09	%
Net interest margin (4)					3.03	%					3.32	%

(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.