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 21, 2010

OCEANFIRST FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Delaware	001-11713	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 21, 2010, OceanFirst Financial Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2010. That press release is attached to this Report as Exhibit 99.1.

ITEM 8.01 OTHER EVENTS

In the press release described in Item 2.02, 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 $0.12 per share and will be payable on November 12, 2010 to the stockholders of record at the close of business on November 1, 2010.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) EXHIBITS

99.1 Press Release dated October 21, 2010.

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 22, 2010

Exhibit Index

Exhibit	Description
99.1	Press Release dated October 21, 2010.

EX-99.1

Exhibit 99.1

Company Contact:

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 NET INCOME,

EARNINGS PER SHARE

GROWTH

TOMS RIVER, NEW JERSEY, October 21, 2010…OceanFirst Financial Corp. (NASDAQ:OCFC), the holding company for OceanFirst Bank (the “Bank”), today announced that net income available to common stockholders increased to $5.2 million for the quarter ended September 30, 2010 as compared to $5.0 million for the quarter ended June 30, 2010, and $4.0 million for the corresponding prior year period. Diluted earnings per share for the quarter ended September 30, 2010 was $0.29, an increase of $0.02 from the prior linked quarter. Additional highlights for the quarter ended September 30, 2010 include:

• Diluted earnings per share have grown in each of the last three quarters. Return on average stockholders equity was 10.7% for the quarter ended September 30, 2010.

• Total revenue (i.e. net interest income and total other income) increased to $23.8 million for the quarter ended September 30, 2010 as compared to $23.3 million for the quarter ended June 30, 2010 and $21.2 million for the quarter ended September 30, 2009.

• Deposits grew $83.5 million during the quarter to $1,623.5 million, including an increase of $102.4 million in core deposits (i.e. all deposits excluding time deposits).

• Tangible common equity capital increased to 8.96% of assets.

The Company also announced that the Board of Directors declared its fifty-fifth consecutive quarterly cash dividend on common stock of $0.12 per share - covering the three month period ended September 30, 2010, to be paid on November 12, 2010 to shareholders of record on November 1, 2010.

Chairman and CEO John R. Garbarino reflected on the quarter. “We are pleased with our record of growing our bottom line and increasing earnings per share, and the consequential value we are building for our shareholders. Core deposit growth also continues, with average core deposits now comprising 81.6% of total deposits. Complementing this growth, the Company again fortified its capital position with an increase in tangible common equity to 8.96% of assets.”

Results of Operations

Net income available to common stockholders for the three months ended September 30, 2010 was $5.2 million or $0.29 per diluted share, as compared to net income available to common stockholders of $4.0 million, or $0.34 per diluted share, for the corresponding prior year period. For the nine months ended September 30, 2010, net income available to common

stockholders was $14.6 million or $0.80 per diluted share, as compared to net income available to common stockholders of $10.5 million or $0.90 per diluted share for the corresponding prior year period. For both the three and nine months ended September 30, 2010 diluted earnings per share reflects the higher number of average diluted shares outstanding from the issuance of additional common share in November 2009.

Net interest income for the three and nine months ended September 30, 2010 increased to $19.6 million and $58.2 million, respectively, as compared to $16.7 million and $48.5 million, respectively, in the same prior year periods, reflecting greater interest-earning assets and, for the nine months ended September 30, 2010, a higher net interest margin. The net interest margin increased to 3.75% for the nine months ended September 30, 2010 from 3.59% in the same prior year period partly due to the low interest rate environment. For the three months ended September 30, 2010 the net interest margin was unchanged at 3.73%, as compared to the same prior year period. The yield on interest-earning assets decreased to 4.90% and 4.94%, respectively, for the three and nine months ended September 30, 2010, as compared to 5.32% and 5.35%, respectively, in the same prior year periods. The cost of interest-bearing liabilities decreased to 1.32% and 1.33%, respectively, for the three and nine months ended September 30, 2010, as compared to 1.79% and 1.98%, respectively, in the same prior year periods. Average interest-earning assets increased by $306.3 million and $264.2 million, respectively, for the three and nine months ended September 30, 2010, as compared to the same prior year periods. The increase in average interest-earning assets was primarily due to the increase in average mortgage-backed securities which increased $259.3 million and $252.5 million, respectively, for the three and nine months ended September 30, 2010.

The provision for loan losses increased to $1.6 million and $6.0 million, respectively, for the three and nine months ended September 30, 2010, as compared to $1.5 million and $3.5 million, respectively, for the corresponding prior year periods. The increased provisions are primarily due to higher levels of non-performing loans and partially due to higher loan balances. Additionally, for the nine months ended September 30, 2010, net charge-offs increased by $645,000 over the corresponding prior year period.

Other income decreased to $4.2 million and $10.8 million, respectively, for the three and nine months ended September 30, 2010, as compared to $4.5 million and $11.9 million, respectively, in the same prior year periods. Loan servicing income (loss) increased to income of $231,000 for the nine months ended September 30, 2010 from a loss of $102,000 in the same prior year period due to an impairment to the loan servicing asset of $263,000 recognized in the first quarter of 2009. Fees and service charges increased to $2.8 million and $8.1 million, respectively, for the three and nine months ended September 30, 2010, as compared to $2.7 million and $7.8 million for the corresponding prior year periods. The increase was due to higher fees from merchant services, commercial checking accounts and trust services partly offset by a reduction in private mortgage insurance fee income. This reduction in PMI fee income resulted from a charge of $203,000 for the three and nine months ended September 30, 2010, related to several rescission claims. The net gain on sales of loans increased to $1.2 million for the three months ended September 30, 2010, as compared to $1.1 million for the corresponding prior year period. Although loan sales volume decreased from the prior year period, the gain on sale margin was very strong resulting in the overall increase in gain on sale of loans for the three months ended September 30, 2010. For the nine months ended September 30, 2010, the net gain on the sale of loans sold decreased to $2.2 million, as compared to $3.1

million for the corresponding prior year period due to a decline in the volume of loans sold. The net loss from other real estate operations was $408,000 for the nine months ended September 30, 2010, as compared to a gain of $71,000 in the same prior year period due to current period write-downs in the value of properties previously acquired. Other income decreased $361,000 and $362,000 for the three and nine months ended September 30, 2010, respectively, as compared to the same prior year periods due to the prior year recovery of $367,000 on borrower escrow funds at Columbia Home Loans, LLC (“Columbia”), the Company’s mortgage banking subsidiary which was shuttered in the fourth quarter of 2007.

Operating expenses increased to $13.8 million and $39.7 million, respectively, for the three and nine months ended September 30, 2010, as compared to $12.4 million and $37.4 million, respectively, for the corresponding prior year periods. Compensation and employee benefits costs increased due to higher incentive compensation, salary and stock plan expense. For the nine months ended September 30, 2010, the increase was also due to the reduction in mortgage loan closings from prior year levels. Fewer loan closings in the current year decreased deferred loan expense which is reflected as an increase to compensation expense. Occupancy expense decreased by $570,000 for the nine months ended September 30, 2010, as compared to the corresponding prior year period due to a $556,000 charge in the second quarter of 2009 relating to the termination of all remaining lease obligations of Columbia. Federal deposit insurance expense for the nine months ended September 30, 2010 decreased by $529,000 from the corresponding prior year period primarily due to a special assessment of $869,000 in the second quarter of 2009. General and administrative expense for the three and nine months ended September 30, 2009 included $413,000 and $582,000, respectively, of costs related to the Company’s announced, but subsequently terminated, merger with Central Jersey Bancorp. For the three and nine months ended September 30, 2010, the reduction in merger related expenses was offset by higher loan origination and servicing related expenses.

Dividends on preferred stock and discount accretion totaled $537,000 and $1.5 million, respectively, for the three and nine months ended September 30, 2009, as compared to no amounts in the current year periods. The preferred stock was redeemed on December 30, 2009.

Financial Condition

Total assets increased to $2,225.4 million at September 30, 2010, an increase from $2,030.0 million at December 31, 2009. Loans receivable, net increased by $36.7 million to $1,666.0 million at September 30, 2010, from $1,629.3 million December 31, 2009, primarily due to increased commercial and commercial real estate lending. Investment securities available for sale increased to $68.9 million at September 30, 2010, as compared to $37.3 million at December 31, 2009, due to third quarter purchases of government agency and municipal securities as the Company invested part of the funds received from strong deposit flows. Mortgage-backed securities available for sale increased to $343.4 million at September 30, 2010, as compared to $213.6 million at December 31, 2009, due to purchases of $162.8 million in mortgage-backed securities issued by U.S. government sponsored enterprises.

The increase in assets was funded by increased deposits, which grew to $1,623.5 million at September 30, 2010 from $1,364.2 million at December 31, 2009. The growth was concentrated in core deposits, which increased $284.3 million. Time deposits decreased $25.0 million as the Bank continued to moderate its pricing for this product. Also, as a result of the increase in deposits, Federal Home Loan Bank advances decreased to $280.0 million at September 30, 2010 from $333.0 million at December 31, 2009. Stockholders’ equity increased

to $199.4 million at September 30, 2010, as compared to $183.5 million at December 31, 2009 due to net income and a reduction in accumulated other comprehensive loss partly offset by the cash dividend on common stock.

Asset Quality

The Company’s non-performing loans totaled $33.8 million at September 30, 2010, an increase from $28.3 million at December 31, 2009, with the largest increase of $2.6 million attributable to one-to-four family mortgage loans. The overall increase is reflective of the weak economic environment. Non-performing loans at September 30, 2010 include $653,000 of loans repurchased due to early payment default that were written down to market value on the date of repurchase and $2.5 million of loans previously held for sale that were also written down to market value. Net loan charge-offs decreased to $153,000 for the three months ended September 30, 2010, as compared to $578,000 for the corresponding prior year period. For the nine months ended September 30, 2010, net loan charge-offs increased to $2.1 million, as compared to $1.5 million for the corresponding prior year period. For the three and nine months ended September 30, 2010 net charge-offs included $75,000 and $1.2 million, respectively, of loans originated by Columbia.

The reserve for repurchased loans, which is included in other liabilities in the Company’s consolidated statements of financial condition, was $809,000 at September 30, 2010, as compared to $819,000 at December 31, 2009. There was no provision for repurchased loans and one charge-off of $10,000 during the nine months ended September 30, 2010. At September 30, 2010, there are two outstanding loan repurchase requests on loans with a total principal balance of $325,000 which the Company is evaluating. One of these requests, with a principal balance of $203,000, was resolved with no loss subsequent to September 30, 2010.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, October 22, 2010 at 11:00 a.m. Eastern time. The direct dial number for the call is (877) 317-6789. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 444952, from one hour after the end of the call until November 8, 2010. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

* * *

OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered savings bank with $2.2 billion in assets and twenty-three 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 by visiting us at www.oceanfirst.com.

Forward-Looking Statements

This news release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995, 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,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” 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 are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and 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, 2010			December 31, 2009			September 30, 2009
	(Unaudited)						(Unaudited)
ASSETS
Cash and due from banks	$	29,632		$	23,016		$	21,767
Investment securities available for sale		68,919			37,267			34,547
Federal Home Loan Bank of New York stock, at cost		17,425			19,434			14,878
Mortgage-backed securities available for sale		343,410			213,622			83,001
Loans receivable, net		1,665,997			1,629,284			1,622,531
Mortgage loans held for sale		4,086			5,658			4,960
Interest and dividends receivable		7,085			6,059			6,412
Real estate owned, net		2,242			2,613			1,204
Premises and equipment, net		21,843			22,088			21,226
Servicing asset		5,661			6,515			6,750
Bank Owned Life Insurance		40,594			39,970			39,768
Other assets		18,484			24,502			15,959
Total assets	$	2,225,378		$	2,030,028		$	1,873,003
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	1,623,516		$	1,364,199		$	1,357,909
Securities sold under agreements to repurchase with retail customers		70,874			64,573			72,996
Federal Home Loan Bank advances		280,000			333,000			230,500
Other borrowings		27,500			27,500			27,500
Due to brokers		3,456			40,684			—
Advances by borrowers for taxes and insurance		7,782			7,453			7,823
Other liabilities		12,821			9,083			10,103
Total liabilities		2,025,949			1,846,492			1,706,831
Stockholders’ equity:
Preferred stock, $.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, no shares issued at September 30, 2010 and December 31, 2009, 38,263 shares issued at September 30, 2009		—			—			37,345
Common stock, $.01 par value, 55,000,000 shares authorized, 33,566,772, 33,566,772 and 27,177,372 shares issued and 18,822,556, 18,821,956 and 12,432,556 shares outstanding at September 30, 2010, December 31, 2009 and September 30, 2009, respectively		336			336			272
Additional paid-in capital		260,435			260,130			205,565
Retained earnings		171,085			163,063			163,487
Accumulated other comprehensive loss		(3,413	)		(10,753	)		(11,184	)
Less: Unallocated common stock held by Employee Stock Ownership Plan		(4,557	)		(4,776	)		(4,849	)
Treasury stock, 14,744,216, 14,744,816 and 14,744,816 shares at September 30, 2010, December 31, 2009 and September 30, 2009, respectively		(224,457	)		(224,464	)		(224,464	)
Common stock acquired by Deferred Compensation Plan		951			986			981
Deferred Compensation Plan Liability		(951	)		(986	)		(981	)
Total stockholders’ equity		199,429			183,536			166,172
Total liabilities and stockholders’ equity	$	2,225,378		$	2,030,028		$	1,873,003

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,
	2010			2009		2010			2009
	(Unaudited)					(Unaudited)
Interest income:
Loans	$	22,314		$	22,618	$	66,524		$	68,581
Mortgage-backed securities		2,976			817		8,923			2,458
Investment securities and other		438			406		1,164			1,408
Total interest income		25,728			23,841		76,611			72,447
Interest expense:
Deposits		3,781			4,263		10,693			14,136
Borrowed funds		2,379			2,876		7,683			9,794
Total interest expense		6,160			7,139		18,376			23,930
Net interest income		19,568			16,702		58,235			48,517
Provision for loan losses		1,600			1,500		6,000			3,500
Net interest income after provision for loan losses		17,968			15,202		52,235			45,017
Other income:
Loan servicing income (loss)		72			119		231			(102	)
Fees and service charges		2,760			2,700		8,117			7,804
Net gain on sales of loans and securities available for sale		1,210			1,094		2,215			3,119
Net (loss) gain from other real estate operations		(45	)		67		(408	)		71
Income from Bank Owned Life Insurance		220			202		624			634
Other		2			363		6			368
Total other income		4,219			4,545		10,785			11,894
Operating expenses:
Compensation		7,326			6,216		20,907			17,781
Occupancy		1,325			1,398		4,117			4,687
Equipment		568			478		1,581			1,428
Marketing		514			467		1,341			1,171
Federal deposit insurance		663			605		1,983			2,512
Data processing		858			812		2,521			2,506
Legal		279			236		843			1,086
Check card processing		311			287		937			792
Accounting and audit		143			135		465			466
General and administrative		1,773			1,719		5,027			4,948
Total operating expenses		13,760			12,353		39,722			37,377
Income before provision for income taxes		8,427			7,394		23,298			19,534
Provision for income taxes		3,189			2,860		8,704			7,448
Net income		5,238			4,534		14,594			12,086
Dividends on preferred stock and warrant accretion		—			537		—			1,539
Net income available to common stockholders	$	5,238		$	3,997	$	14,594		$	10,547
Basic earnings per share	$	0.29		$	0.34	$	0.80		$	0.90
Diluted earnings per share	$	0.29		$	0.34	$	0.80		$	0.90
Average basic shares outstanding		18,146			11,724		18,137			11,710
Average diluted shares outstanding		18,194			11,772		18,186			11,758

OceanFirst Financial Corp.

SELECTED CONSOLIDATED FINANCIAL DATA

(in thousands, except per share amounts)

	At September 30, 2010			At December 31, 2009			At September 30, 2009
STOCKHOLDERS’ EQUITY
Stockholders’ equity to total assets		8.96	%		9.04	%		8.87	%
Common shares outstanding (in thousands)		18,823			18,822			12,433
Stockholders’ equity per common share	$	10.59		$	9.75		$	10.36
Tangible stockholders’ equity per common share		10.59			9.75			10.36
ASSET QUALITY
Non-performing loans:
Real estate – one-to-four family	$	21,776		$	19,142		$	15,814
Commercial real estate		6,822			5,152			4,922
Construction		368			368			67
Consumer		4,132			3,031			2,416
Commercial		674			627			295
Total non-performing loans		33,772			28,320			23,514
REO, net		2,242			2,613			1,204
Total non-performing assets	$	36,014		$	30,933		$	24,718
Delinquent loans 30 to 89 days	$	18,376		$	15,528		$	16,423
Allowance for loan losses	$	18,593		$	14,723		$	13,680
Allowance for loan losses as a percent of total loans receivable		1.10	%		0.89	%		0.83	%
Allowance for loan losses as a percent of non-performing loans		55.05			51.99			58.18
Non-performing loans as a percent of total loans receivable		2.00			1.72			1.44
Non-performing assets as a percent of total assets		1.62			1.52			1.32

	For the three months ended September 30,						For the nine months ended September 30,
	2010			2009			2010			2009
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets		0.94	%		0.96	%		0.89	%		0.85	%
Return on average stockholders’ equity		10.71			11.22			10.30			10.28
Interest rate spread		3.58			3.53			3.61			3.37
Interest rate margin		3.73			3.73			3.75			3.59
Operating expenses to average assets		2.48			2.62			2.43			2.63
Efficiency ratio		57.85			58.14			57.55			61.87

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(in thousands)

LOANS RECEIVABLE

	At September 30, 2010			At December 31, 2009
Real estate:
One-to-four family	$	960,557		$	954,736
Commercial real estate, multi-family and land		426,390			396,883
Construction		13,135			9,241
Consumer		211,035			217,290
Commercial		76,877			70,214
Total loans		1,687,994			1,648,364
Loans in process		(4,220	)		(3,466	)
Deferred origination costs, net		4,902			4,767
Allowance for loan losses		(18,593	)		(14,723	)
Total loans, net		1,670,083			1,634,942
Less: mortgage loans held for sale		4,086			5,658
Loans receivable, net	$	1,665,997		$	1,629,284
Mortgage loans serviced for others	$	926,148		$	952,871
Loan pipeline		129,747			90,320

	For the three months  ended September 30,				For the nine months ended September 30,
	2010		2009		2010		2009
Loan originations	$	129,360	$	122,405	$	347,722	$	448,091
Loans sold		50,188		61,448		100,341		192,556
Net charge-offs		153		578		2,130		1,485

DEPOSITS

	At September 30, 2010		At December 31, 2009
Type of Account
Non-interest bearing	$	138,563	$	107,721
Interest-bearing checking		844,458		615,347
Money market deposit		107,086		96,886
Savings		246,214		232,081
Time deposits		287,195		312,164
	$	1,623,516	$	1,364,199

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

	FOR THE THREE MONTHS ENDED SEPTEMBER 30,
	2010							2009
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST			AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments	$	6,300	$	4		.25	%	$	—	$	—		—	%
Investment securities (1)		59,692		156		1.05			55,763		167		1.20
FHLB stock		17,869		278		6.22			15,168		239		6.30
Mortgage-backed securities (1)		344,579		2,976		3.45			85,279		817		3.83
Loans receivable, net (2)		1,670,590		22,314		5.34			1,636,541		22,618		5.53
Total interest-earning assets		2,099,030		25,728		4.90			1,792,751		23,841		5.32
Non-interest-earning assets		118,312							93,544
Total assets	$	2,217,342						$	1,886,295
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	1,180,155		2,365		.80		$	924,360		2,356		1.02
Time deposits		296,579		1,416		1.91			335,073		1,907		2.28
Total		1,476,734		3,781		1.02			1,259,433		4,263		1.35
Borrowed funds		391,169		2,379		2.43			335,242		2,876		3.43
Total interest-bearing liabilities		1,867,903		6,160		1.32			1,594,675		7,139		1.79
Non-interest-bearing deposits		137,595							113,879
Non-interest-bearing liabilities		16,253							16,150
Total liabilities		2,021,751							1,724,704
Stockholders’ equity		195,591							161,591
Total liabilities and stockholders’ equity	$	2,217,342						$	1,886,295
Net interest income			$	19,568						$	16,702
Net interest rate spread (3)						3.58	%						3.53	%
Net interest margin (4)						3.73	%						3.73	%

	FOR THE NINE MONTHS ENDED SEPTEMBER 30,
	2010							2009
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST			AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments	$	2,685	$	5		.25	%	$	—	$	—		—	%
Investment securities (1)		57,226		423		.99			55,906		756		1.80
FHLB stock		22,091		736		4.44			17,115		652		5.08
Mortgage-backed securities (1)		337,515		8,923		3.52			85,027		2,458		3.85
Loans receivable, net (2)		1,648,991		66,524		5.38			1,646,232		68,581		5.55
Total interest-earning assets		2,068,508		76,611		4.94			1,804,280		72,447		5.35
Non-interest-earning assets		111,795							88,477
Total assets	$	2,180,303						$	1,892,757
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	1,059,780		6,412		.81		$	885,408		7,513		1.13
Time deposits		302,627		4,281		1.89			349,514		6,623		2.53
Total		1,362,407		10,693		1.05			1,234,922		14,136		1.53
Borrowed funds		485,731		7,683		2.11			373,833		9,794		3.49
Total interest-bearing liabilities		1,848,138		18,376		1.33			1,608,755		23,930		1.98
Non-interest-bearing deposits		125,953							110,379
Non-interest-bearing liabilities		17,208							16,917
Total liabilities		1,991,299							1,736,051
Stockholders’ equity		189,004							156,706
Total liabilities and stockholders’ equity	$	2,180,303						$	1,892,757
Net interest income			$	58,235						$	48,517
Net interest rate spread (3)						3.61	%						3.37	%
Net interest margin (4)						3.75	%						3.59	%

(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.