Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨ Accelerated Filer x Non-accelerated Filer ¨ Smaller Reporting Company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x.

As of ~~November 6, 2007,~~May 7, 2008, there were ~~12,346,465~~12,362,098 shares of the Registrant’s Common Stock, par value $.01 per share, outstanding.


	September 30, 2007			December 31, 2006			March 31, 2008			December 31, 2007
	(Unaudited)						(Unaudited)
ASSETS

Cash and due from banks	$	29,456		$	32,204		$	32,728		$	27,547
Investment securities available for sale		58,133			82,384			53,191			57,625
Federal Home Loan Bank of New York stock, at cost		22,040			25,346			21,627			22,941
Mortgage-backed securities available for sale		58,285			68,369			50,263			54,137
Loans receivable, net		1,678,937			1,701,425			1,656,613			1,675,919
Mortgage loans held for sale		3,244			82,943			4,707			6,072
Interest and dividends receivable		8,357			8,083			6,625			6,915
Real estate owned, net		433			288			933			438
Premises and equipment, net		17,372			18,196			18,574			17,882
Servicing asset		9,340			9,787			8,498			8,940
Bank Owned Life Insurance		38,087			37,145			38,764			38,430
Intangible Assets		23			1,114
Other assets		13,123			9,718			12,948			10,653

Total assets	$	1,936,830		$	2,077,002		$	1,905,471		$	1,927,499


LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits	$	1,310,941		$	1,372,328		$	1,280,809		$	1,283,790
Securities sold under agreements to repurchase with retail customers		69,742			50,982			73,365			69,807
Securities sold under agreements to repurchase with the Federal Home Loan Bank		13,000			34,000			—			12,000
Federal Home Loan Bank advances		371,500			430,500			375,200			393,000
Other borrowings		27,500			17,500			27,500			27,500
Advances by borrowers for taxes and insurance		8,247			7,743			8,818			7,588
Other liabilities		12,329			31,629			16,526			9,508

Total liabilities		1,813,259			1,944,682			1,782,218			1,803,193


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 and 12,262,307 shares outstanding at September 30, 2007 and December 31, 2006, respectively		272			272
Common stock, $.01 par value, 55,000,000 shares authorized, 27,177,372 shares issued and 12,362,098 and 12,346,465 shares outstanding at March 31, 2008 and December 31, 2007, respectively								272			272
Additional paid-in capital		203,237			201,936			203,557			203,532
Retained earnings		154,317			164,121			156,537			154,929
Accumulated other comprehensive loss		(2,704	)		(470	)		(6,258	)		(3,211	)
Less: Unallocated common stock held by Employee Stock Ownership Plan		(5,612	)		(6,369	)		(5,287	)		(5,360	)
Treasury stock, 14,835,457 and 14,915,065 shares at September 30, 2007 and December 31, 2006, respectively		(225,939	)		(227,170	)
Treasury stock, 14,815,274 and 14,830,907 shares at March 31, 2008 and December 31, 2007, respectively								(225,568	)		(225,856	)
Common stock acquired by Deferred Compensation Plan		1,406			1,457			510			1,307
Deferred Compensation Plan Liability		(1,406	)		(1,457	)		(510	)		(1,307	)

Total stockholders’ equity		123,571			132,320			123,253			124,306

Total liabilities and stockholders’ equity	$	1,936,830		$	2,077,002		$	1,905,471		$	1,927,499


	For the three months ended September 30,					For the nine months ended September 30,						For the three months ended March 31,
	2007		2006			2007			2006			2008				2007
	(Unaudited)					(Unaudited)						(Unaudited)
Interest income:
Loans	$	25,945	$	27,825		$	79,528		$	79,051		$	25,003			$	27,344
Mortgage-backed securities		688		812			2,127			2,518			611				724
Investment securities and other		1,590		1,679			5,494			5,102			1,908				2,304

Total interest income		28,223		30,316			87,149			86,671			27,522				30,372

Interest expense:
Deposits		9,326		8,939			27,778			24,040			7,864				9,329
Borrowed funds		6,066		6,918			19,431			18,343			5,423		��		6,635

Total interest expense		15,392		15,857			47,209			42,383			13,287				15,964

Net interest income		12,831		14,459			39,940			44,288			14,235				14,408
Provision for loan losses		75		50			525			100			375				340

Net interest income after provision for loan losses		12,756		14,409			39,415			44,188			13,860				14,068

Other income (loss):
Loan servicing income		126		136			356			408			90				122
Fees and service charges		2,942		2,677			8,724			7,854			2,767				2,798
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			597				(9,583	)
Net income (loss) from other real estate operations		8		(60	)		27			(60	)
Net loss from other real estate operations													(21	)			(19	)
Income from Bank Owned Life Insurance		324		291			942			840			334				305
Other		6		44			41			55			3				5

Total other income (loss)		4,562		6,603			(1,586	)		17,571			3,770				(6,372	)

Operating expenses:
Compensation and employee benefits		6,755		7,497			22,227			22,752			5,935				7,859
Occupancy		1,569		1,244			4,028			3,564			1,201				1,206
Equipment		543		767			1,631			1,975			511				553
Marketing		359		531			1,046			1,230			393				316
Federal deposit insurance		168		133			444			400			309				136
Data processing		859		859			2,625			2,569			849				907
General and administrative		2,357		2,483			8,430			7,735			2,436				3,099
Goodwill impairment		—		—			1,014			—			—				1,014

Total operating expenses		12,610		13,514			41,445			40,225			11,634				15,090

Income (loss) before provision (benefit) for income taxes		4,708		7,498			(3,616	)		21,534			5,996				(7,394	)
Provision (benefit) for income taxes		1,582		2,592			(1,597	)		7,461			1,990				(1,972	)

Net income (loss)	$	3,126	$	4,906		$	(2,019	)	$	14,073		$	4,006			$	(5,422	)


Basic earnings (loss) per share	$	0.27	$	0.43		$	(0.18	)	$	1.22		$	0.34			$	(0.47	)

Diluted earnings (loss) per share	$	0.27	$	0.42		$	(0.18	)	$	1.18		$	0.34			$	(0.47	)


Average basic shares outstanding		11,561		11,465			11,522			11,567			11,653				11,486

Average diluted shares outstanding		11,643		11,689			11,522			11,880			11,706				11,486


	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Employee Stock Ownership Plan			Treasury Stock			Common Stock Acquired by Deferred Compensation Plan			Deferred Compensation Plan Liability			Total
Balance at December 31, 2005	$	272	$	197,621		$	164,613		$	(1,223	)	$	(7,472	)	$	(215,027	)	$	1,383		$	(1,383	)	$	138,784

Comprehensive income:
Net income		—		—			14,073			—			—			—			—			—			14,073
Other comprehensive income:
Unrealized gain on securities (net of tax expense $244)		—		—			—			354			—			—			—			—			354

Total comprehensive income																									14,427

Stock award		—		278			—			—			—			—			—			—			278
Tax benefit of stock plans		—		2,035			—			—			—			—			—			—			2,035
Purchase 669,604 shares of common stock		—		—			—			—			—			(15,288	)		—			—			(15,288	)
Allocation of ESOP stock		—		—			—			—			827			—			—			—			827
ESOP adjustment		—		1,385			—			—			—			—			—			—			1,385
Cash dividend—$.60 per share		—		—			(6,897	)		—			—			—			—			—			(6,897	)
Exercise of stock options		—		—			(3,720	)		—			—			5,179			—			—			1,459
Purchase of stock for the deferred compensation plan		—		—			—			—			—			—			134			(134	)		—

Balance at September 30, 2006	$	272	$	201,319		$	168,069		$	(869	)	$	(6,645	)	$	(225,136	)	$	1,517		$	(1,517	)	$	137,010

																											Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Employee Stock Ownership Plan			Treasury Stock			Common Stock Acquired by Deferred Compensation Plan			Deferred Compensation Plan Liability			Total
Balance at December 31, 2006	$	272	$	201,936		$	164,121		$	(470	)	$	(6,369	)	$	(227,170	)	$	1,457		$	(1,457	)	$	132,320		$	272	$	201,936		$	164,121		$	(470	)	$	(6,369	)	$	(227,170	)	$	1,457		$	(1,457	)	$	132,320

Comprehensive loss:
Net loss		—		—			(2,019	)		—			—			—			—			—			(2,019	)		—		—			(5,422	)		—			—			—			—			—			(5,422	)
Other comprehensive loss:
Unrealized loss on securities (net of tax benefit $1,543)		—		—			—			(2,234	)		—			—			—			—			(2,234	)
Unrealized loss on securities (net of tax benefit $23)																												—		—			—			(33	)		—			—			—			—			(33	)

Total comprehensive loss																									(4,253	)																									(5,455	)

Stock awards		—		354			—			—			—			—			—			—			354			—		96			—			—			—			—			—			—			96
Treasury stock allocated to restricted stock plan		—		(295	)		(3	)		—			—			298			—			—			—			—		(295	)		(3	)		—			—			298			—			—			—
Tax benefit of stock plans		—		337			—			—			—			—			—			—			337			—		320			—			—			—			—						—			320
Purchase 49,701 shares of common stock		—		—			—			—			—			(1,112	)		—			—			(1,112	)		—		—			—			—			—			(1,112	)		—			—			(1,112	)
Allocation of ESOP stock		—		—			—			—			757			—			—			—			757			—		—			—			—			252			—			—			—			252
ESOP adjustment		—		905			—			—			—			—			—			—			905			—		381			—			—			—			—			—			—			381
Cash dividend—$.60 per share		—		—			(6,784	)		—			—			—			—			—			(6,784	)
Cash dividend - $.20 per share																												—		—			(2,259	)		—			—			—			—			—			(2,259	)
Exercise of stock options		—		—			(998	)		—			—			2,045			—			—			1,047			—		—			(863	)		—			—			1,613			—			—			750
Sale of stock for the deferred compensation plan		—		—			—			—			—			—			(51	)		51			—			—		—			—			—			—			—			(43	)		43			—

Balance at September 30, 2007	$	272	$	203,237		$	154,317		$	(2,704	)	$	(5,612	)	$	(225,939	)	$	1,406		$	(1,406	)	$	123,571
Balance at March 31, 2007																											$	272	$	202,438		$	155,574		$	(503	)	$	(6,117	)	$	(226,371	)	$	1,414		$	(1,414	)	$	125,293

Balance at December 31, 2007																											$	272	$	203,532		$	154,929		$	(3,211	)	$	(5,360	)	$	(225,856	)	$	1,307		$	(1,307	)	$	124,306

Comprehensive income:
Net income																												—		—			4,006			—			—			—			—			—			4,006
Other comprehensive loss:
Unrealized loss on securities (net of tax benefit $1,641)																												—		—			—			(3,047	)		—			—			—			—			(3,047	)

Total comprehensive income																																																			959

Stock awards																												—		131			—			—			—			—			—			—			131
Treasury stock allocated to restricted stock plan																												—		(172	)		(24	)		—			—			196			—			—			—
Allocation of ESOP stock																												—		—			—			—			73			—			—			—			73
ESOP adjustment																												—		66			—			—			—			—			—			—			66
Cash dividend - $.20 per share																												—		—			(2,339	)		—			—			—			—			—			(2,339	)
Exercise of stock options																												—		—			(35	)		—			—			92			—			—			57
Sale of stock for the deferred compensation plan																												—		—			—			—			—			—			(797	)		797			—

Balance at March 31, 2008																											$	272	$	203,557		$	156,537		$	(6,258	)	$	(5,287	)	$	(225,568	)	$	510		$	(510	)	$	123,253


	For the nine months ended September 30,						For the three months March 31,
	2007			2006			2008			2007
	(Unaudited)						(Unaudited)
Cash flows from operating activities:
Net (loss) income	$	(2,019	)	$	14,073
Net income (loss)							$	4,006		$	(5,422	)

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of premises and equipment		1,486			1,531			414			533
Amortization of ESOP		757			827			73			252
ESOP adjustment		905			1,385			66			381
Stock award		354			278			131			96
Amortization of servicing asset		1,648			1,509			551			562
Amortization and impairment of intangible assets		1,091			77			—			1,040
Net premium amortization in excess of discount accretion on securities		81			194			10			42
Net amortization of deferred costs and discounts on loans		729			506			156			215
Provision for loan losses		525			100			375			340
Lower of cost or market write-down on loans held for sale		9,400			—			—			7,078
Provision for repurchased loans		3,760			—
Net loss on write-off of fixed assets		21			—
Net loss on sale of real estate owned		(11	)		99
(Recovery) provision for repurchased loans								(161	)		3,960
Net gain on sales of loans and securities		(1,484	)		(8,474	)		(436	)		(1,455	)
Loans repurchased		(1,012	)		—			(222	)		—
Proceeds from sales of mortgage loans held for sale		352,373			514,441			28,435			162,701
Mortgage loans originated for sale		(281,342	)		(537,480	)		(26,643	)		(139,924	)
Increase in value of Bank Owned Life Insurance		(942	)		(840	)		(334	)		(305	)
Increase in interest and dividends receivable		(274	)		(1,277	)
Decrease (increase) in interest and dividends receivable								290			(246	)
Increase in other assets		(1,862	)		(627	)		(655	)		(598	)
(Decrease) increase in other liabilities		(12,453	)		11,761
Increase (decrease) in other liabilities								7,702			(12,242	)

Total adjustments		73,750			(15,990	)		9,752			22,430

Net cash provided by (used in) operating activities		71,731			(1,917	)

Net cash provided by operating activities								13,758			17,008

Cash flows from investing activities:
Net decrease (increase) in loans receivable		15,880			(60,892	)		18,165			(1,856	)
Loans repurchased		(14,128	)		—			(408	)		(13,934	)
Proceeds from sales of loans repurchased		8,666			—
Proceeds from maturities or calls of investment securities available for sale		20,780			2,584			—			10,780
Purchase of investment securities available for sale		(681	)		(748	)
Proceeds from sale of investment securities available for sale		—			437			122			—
Proceeds from sale of mortgage-backed securities available for sale		—			6,241
Purchase of mortgage-backed securities available for sale		—			(6,439	)
Purchases of investment securities								(633	)		(681	)
Principal payments on mortgage-backed securities available for sale		10,378			13,480			4,244			3,616
Decrease (increase) in Federal Home Loan Bank of New York stock		3,306			(2,842	)
Net proceeds (disbursements) from sales and acquisition of real estate owned		638			(39	)
Decrease in Federal Home Loan Bank of New York stock								1,314			27
Disbursements for acquisition of real estate owned								—			(41	)
Purchases of premises and equipment		(683	)		(3,135	)		(1,106	)		(236	)

Net cash provided by (used in) investing activities		44,156			(51,353	)		21,698			(2,325	)


	For the nine months ended September 30,						For the three months ended March 31,
	2007			2006			2008			2007
	(Unaudited)						(Unaudited)
Cash flows from financing activities:
(Decrease) increase in deposits	$	(61,387	)	$	15,170
Increase (decrease) in short-term borrowings		3,760			(3,939	)
Decrease in deposits							$	(2,981	)	$	(19,397	)
(Decrease) increase in short-term borrowings								(28,242	)		15,502
Repayments of securities sold under agreements to repurchase with the Federal Home Loan Bank		—			(10,000	)		(12,000	)		(15,000	)
Proceeds from Federal Home Loan Bank advances		20,000			190,000			37,000			30,000
Repayments of Federal Home Loan Bank advances		(85,000	)		(127,000	)		(23,000	)		(22,000	)
Proceeds from other borrowings		10,000			12,500
Increase in advances by borrowers for taxes and insurance		504			1,089			1,230			1,264
Exercise of stock options		1,047			1,459			57			750
Dividends paid		(6,784	)		(6,897	)		(2,339	)		(2,259	)
Purchase of treasury stock		(1,112	)		(15,288	)		—			(1,112	)
Tax benefit of stock plans		337			2,035			—			320

Net cash (used in) provided by financing activities		(118,635	)		59,129
Net cash used in financing activities								(30,275	)		(11,932	)

Net (decrease) increase in cash and due from banks		(2,748	)		5,859

Net increase in cash and due from banks								5,181			2,751
Cash and due from banks at beginning of period		32,204			31,108			27,547			32,204

Cash and due from banks at end of period	$	29,456		$	36,967		$	32,728		$	34,955


Supplemental Disclosure of Cash Flow
Information:
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	47,590		$	41,689		$	13,412		$	16,253
Income taxes		227			3,947			20			79
Non cash activities:
Transfer of loans receivable to real estate owned		772			70			495			380
Transfer of securities sold under agreements to repurchase to advances		21,000			15,000

The accompanying unaudited consolidated financial statements include the accounts of OceanFirst Financial Corp. (the “Company”) and its wholly-owned subsidiary, OceanFirst Bank (the “Bank”) and its wholly-owned subsidiaries, Columbia Home Loans, LLC, OceanFirst REIT Holdings, LLC, and OceanFirst Services, LLC. ~~At September 30, 2007 most of the~~The operations of Columbia Home Loans, LLC were ~~discontinued.~~shuttered in late 2007.

The interim consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 are not necessarily indicative of the results of operations that may be expected for all of ~~2007.~~2008.

Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report to Stockholders on Form 10-K for the year ended December 31, ~~2006.~~

~~Certain amounts previously reported have been reclassified to conform to the current period’s classification.~~2007.

The following reconciles shares outstanding for basic and diluted earnings per share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~ (in thousands):


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
	2007		2006		2007		2006		2008		2007
Weighted average shares issued net of Treasury shares	12,329		12,345		12,317		12,481		12,351		12,304
Less: Unallocated ESOP shares	(681	)	(804	)	(710	)	(837	)	(631	)	(740	)
Unallocated incentive award shares and shares held by deferred compensation plan	(87	)	(76	)	(85	)	(77	)	(67	)	(78	)

Average basic shares outstanding	11,561		11,465		11,522		11,567		11,653		11,486
Add: Effect of dilutive securities:
Stock options	15		150		—		240		42		—
Incentive awards and shares held by deferred compensation plan	67		74		—		73		11		—

Average diluted shares outstanding	11,643		11,689		11,522		11,880		11,706		11,486

For the three months ended ~~September 30,~~March 31, 2008 and 2007, 1,402,000 and ~~2006, 1,408,000 and 924,000, respectively, antidilutive stock options were excluded from earnings per share calculations. For the nine months ended September 30, 2007 and 2006, 1,312,000 and 659,000,~~1,005,000, respectively, antidilutive stock options were excluded from earnings per share calculations. In addition, for the ~~nine~~three months ended ~~September 30,~~March 31, 2007, ~~113,000~~133,000 antidilutive potential shares of common stock have been excluded from the calculation of average diluted shares outstanding, as the Company incurred a net loss for the period.

For the three month periods ended ~~September 30,~~March 31, 2008 and 2007, ~~and 2006,~~ total comprehensive income (loss), representing net income plus or minus the change in unrealized gains or losses on securities available for sale amounted to ~~$1,224,000~~$959,000 and ~~$5,598,000,~~$(5,455,000), respectively. ~~For the nine months ended September 30, 2007 and 2006 total comprehensive (loss) income amounted to $(4,253,000) and $14,427,000.~~

Loans receivable, net at ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007 consisted of the following (in thousands):


	September 30, 2007			December 31, 2006			March 31, 2008			December 31, 2007
Real estate:
One-to-four family	$	1,104,566		$	1,231,716
One- to-four family							$	1,071,720		$	1,084,687
Commercial real estate, multi-family and land		317,080			306,288			322,451			326,707
Construction		14,172			13,475			10,067			10,816
Consumer		209,232			190,029			210,743			213,282
Commercial		46,532			49,693			53,947			54,279

Total loans		1,691,582			1,791,201			1,668,928			1,689,771

Loans in process		(3,883	)		(2,318	)		(2,080	)		(2,452	)
Deferred origination costs, net		5,169			5,723			5,211			5,140
Allowance for loan losses		(10,687	)		(10,238	)		(10,739	)		(10,468	)

Total loans, net		1,682,181			1,784,368			1,661,320			1,681,991

Less: Mortgage loans held for sale		3,244			82,943			4,707			6,072

Loans receivable, net	$	1,678,937		$	1,701,425		$	1,656,613		$	1,675,919

An analysis of the allowance for loan losses for the three months ended March 31, 2008 and 2007 is as follows (in thousands):

An analysis of the reserve for repurchased loans for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 follows (in thousands). ~~There was no balance in the reserve at September 30, 2006.~~ The reserve is included in other liabilities in the accompanying ~~statement~~statements of financial condition.


							Three months ended March 31,
	Three months ended September 30, 2007			Nine months ended September 30, 2007			2008			2007
Balance at beginning of period	$	5,397		$	9,600		$	2,398		$	9,600
(Recovery) provision charged to operations		(200	)		3,760			(161	)		3,960
Loss on loans repurchased		(2,444	)		(10,607	)		(524	)		(3,777	)

Balance at end of period	$	2,753		$	2,753		$	1,713		$	9,783

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. In establishing the reserve for repurchased loans, the Company considered all types of sold loans, however, the actual types of loans which resulted in loss estimates included subprime loans with 100% financing, all other subprime loans and a small amount of ALT-A loans. At ~~September 30, 2007, the Company utilized $15.1 million to repurchase loans from investors of which $12.2 million were subsequently resold. Also, at September 30, 2007~~March 31, 2008 the Company had no unresolved loan repurchase ~~requests of $618,000.~~requests.

The major types of deposits at ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007 were as follows (in thousands):

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company adopted the statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 with early adoption permitted as of the beginning of a fiscal year that begins on or before November 15, 2007.January 1, 2008. The ~~Company does not expect the~~ adoption of ~~statement~~Statement No. 159 todid not have a material impact on ~~its~~the Company’s financial ~~statements.~~statements as the Company did not choose to measure any additional financial instruments or certain other items at fair value.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This ~~Statement~~statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This ~~Statement~~statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this ~~Statement~~statement does not require any new fair value measurements. The ~~Statement is~~Company adopted the statement effective ~~for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.~~January 1, 2008. The ~~Company does not expect the~~ adoption of Statement No. 157 todid not have a material impact on ~~its financial statements.~~the Company’s operations.

In June ~~2006,~~2007, the Emerging Issues Task Force (“EITF”) of the FASB issued ~~FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” The interpretation clarifies~~EITF 06-11 which provides guidance on how an entity should recognize the ~~accounting for uncertainty in~~ income ~~taxes recognized in an enterprise’s financial statements in accordance with FASB~~tax benefit received on dividends that are (a) paid to employees holding equity-classified nonvested shares, equity-classified nonvested share units, or equity-classified outstanding share options and (b) charged to retained earnings under Statement 109 – “Accounting for Income Taxes.” This Interpretation presents a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.123(R). The Company adopted ~~the Interpretation~~EITF 06-11 effective January 1, ~~2007.~~2008. The adoption of ~~Interpretation No. 48~~EITF 06-11 did not have a material impact on the Company’s financial statements.

Statement No. 157 defines fair value as the ~~FASB issued SFAS No. 156, “Accounting~~price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair market measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for ~~Servicing~~the asset or liability or in the absence of ~~Financial Assets.” SFAS No. 140, “Accounting~~a principal market, the most advantageous market for ~~Transfers~~the asset or liability. The price in the principal (or the most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and ~~Servicing of Financial Assets and Extinguishments of Liabilities,” establishes, among other things, the accounting~~customary for ~~all separately recognized servicing~~transactions involving such assets and ~~servicing liabilities. SFAS~~liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Statement No. ~~156 amends Statement 140 to require~~157 requires the use of valuation techniques that ~~all separately recognized servicing~~are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and ~~servicing~~liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount

on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, Statement No. 157 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities ~~be initially~~and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

A description of the valuation methodologies used for assets and liabilities measured at fair value, ~~if practicable. This Statement permits, but does~~as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not ~~require, the subsequent measurement of separately recognized servicing assets and servicing liabilities~~available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. ~~An entity that uses derivative instruments~~While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to ~~mitigate~~determine the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under this Statement, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. By electing that option, an entity may simplify its accounting because this Statement permits income statement recognition of the potential offsetting changes in fair value of ~~those servicing~~certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale – Securities classified as available for sale are reported at fair value utilizing Level 1 and Level 2 inputs. Most of the Company’s investment and mortgage-backed securities are fixed income instruments that are not quoted on an exchange, but are bought and sold in active markets. Prices for these instruments are obtained through third party pricing vendors or security industry sources that actively participate in the buying and selling of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing is a mathematical technique used principally to value certain securities without relying exclusively on quoted prices for the specific securities, but comparing the securities to benchmark or comparable securities.

The following table summarizes financial assets and ~~servicing~~financial liabilities measured at fair value on a recurring basis as of March 31, 2008, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

Certain financial assets and ~~derivative~~financial liabilities are measured at fair value on a nonrecurring basis, that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in ~~the same accounting period. The Company adopted the~~ certain circumstances (for example, when there is evidence of impairment). Financial assets and liabilities measured at fair value on a non-recurring basis were not significant as of March 31, 2008.

Statement ~~effective~~157 will be applicable to certain non-financial assets and non-financial liabilities measured at fair value on a recurring and non-recurring basis, such as real estate owned, beginning January 1, ~~2007. The adoption of SFAS No. 156 did not have a material impact on the Company’s financial statements.~~2009.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Note 1 to the Company’s Audited Consolidated Financial Statements for the year ended December 31, ~~2006~~2007 included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2006,~~2007, as supplemented by this report, contains a summary of significant accounting policies. Various elements of these accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. Certain assets are carried in the consolidated statements of financial condition at fair value or the lower of cost or fair value. Policies with respect to the methodologies used to determine the allowance for loan losses, the reserve for repurchased loans, the valuation of Mortgage Servicing Rights and judgments regarding securities impairment are the most critical accounting policies because they are important to the presentation of the Company’s financial condition and results of operations, involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions and estimates could result in material differences in the results of operations or financial condition. These critical accounting policies and their application are reviewed periodically and, at least annually, with the Audit Committee of the Board of Directors.

The Company’s results of operations are primarily dependent on net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and the interest expense on interest-bearing liabilities, such as deposits and borrowings. The Company also generates non-interest income such as income from loan sales, loan servicing, loan originations, merchant credit card services, deposit accounts, the sale of alternative investments, trust and asset management services and other fees. The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, data processing and general and administrative expenses. The Company’s results of operations are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government policies and actions of regulatory agencies.

~~During~~Throughout the ~~second~~first quarter of 2008 short-term interest rates continued to decline and the ~~Board~~interest rate yield curve steepened. The changing interest rate environment has generally had a positive impact on the Bank’s results of ~~Directors of~~operations and net interest margin. Interest-earning assets, both loans and securities, are generally priced against longer-term indices, while interest-bearing liabilities, primarily deposits and borrowings, are generally priced against shorter-term indices.

The Company incurred a net loss for the ~~Bank decided~~three months ended March 31, 2007 due to ~~discontinue most of the operations of~~losses at Columbia ~~Homes~~Home Loans, LLC (“Columbia”), the ~~Bank’s~~Company’s mortgage banking ~~subsidiary. During the third quarter, the Bank decided~~subsidiary, relating 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. Columbia originated a full product line of residential mortgage loans including the origination of subprime ~~mortgage~~ loans. These subprime loans were ordinarily sold to investors in the normal course of business. The loan sale agreements generally required Columbia to repurchase certain loans previously sold in the event of an early payment default, generally defined as the failure by the borrower to make a payment within a designated period early in the loan term. Columbia may also be required to repurchase a loan in the event of a breach to a representation or warranty. Columbia experienced early payment defaults primarily related to subprime mortgage loans with 100% financing relative to the value of the underlying property. During the first quarter of 2007, Columbia originated $38.2 million in subprime loans of which $8.7 million were loans with 100% financing. In March 2007, ~~the Company~~Columbia discontinued the origination of all subprime loans. A reserve was established to account for Columbia’s potential obligation to repurchase loans. In establishing the reserve for repurchased loans, the Company considered all types of sold loans, however, the actual types of loans which resulted in loss estimates included subprime loans with 100% financing, all other subprime loans and ~~a small amount of ALT-A loans. As a result~~in September 2007, the Bank discontinued all of the ~~analysis of the reserve for repurchased loans~~loan origination activity at September 30, 2007, the Company recognized a reversal of the provision for repurchased loans of $200,000 for the quarter ended September 30, 2007. 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. Columbia also maintained an inventory of loans held for sale. These loans were originated for sale to investors, however, a large amount of subprime loans remained unsold atColumbia. At March 31, ~~2007 due to a significant decline in liquidity in~~2008, the subprime loan market during the first quarter of 2007, primarily related to changes in investor product specifications. The loans were initially underwritten to the specifications of particular investors and were generally intended to be sold in bulk. When the investors’ product specifications changed, thereBank was an absence of traditional buyers for these loans creating the significant decline in liquidity in the subprime loan market. During the second quarter of 2007, Columbia closed on a bulk sale of 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, is a charge of $9.4 million incurred by Columbia to reduce loans held for sale to their current fair market value. There was no lower of cost or market value charge for the quarter ended September 30, 2007. At September 30, 2007, Columbia wasstill holding subprime loans with a gross principal balance of ~~$7.2~~$6.1 million and a carrying value, net of reserves and lower of cost or market adjustment, of ~~$4.4~~$3.7 million and ALT-A loans with a gross principal balance of $7.3 million and a carrying value, net of reserves and lower of cost or market adjustment, of $6.3 million.

The interest rate yield curve began the year in an inverted position and generally remained flat to inverted through most of the second quarter when longer-term rates rose and the interest rate yield curve had a modest upward slope. During the third quarter shorter-term rates began to decline resulting in a continued upward slope to the interest rate yield curve. The flat to inverted yield curve experienced throughout most of 2006 and through the beginning of 2007 has generally had a negative impact on the Bank’s results of operations and net interest margin as interest-earning assets, both loans and securities, are priced against longer-term indices, while interest-bearing liabilities, primarily deposits and borrowings, are priced against shorter-term indices. The Bank has generally not repriced all core deposits (defined as all deposits other than time deposits) at the same pace as market increases in short-term interest rates. Any upward repricing of core deposits would likely have a negative impact on the Bank’s results of operations and net interest margin. Conversely, a prolonged steepening to the yield curve may have a small positive impact on the Bank’s results of operations and net interest margin in the latter part of 2007 and into 2008.

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them.

The following ~~tables set~~table sets forth certain information relating to the Company for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 and ~~2006.~~2007. The yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances. The yields and costs include certain fees which are considered adjustments to yields.


	FOR THE THREE MONTHS ENDED MARCH 31,
	2008						2007
	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	$	7,967	$	61	3.06	%	$	8,286	$	108	5.21	%
Investment securities (1)		62,617		1,366	8.73			75,571		1,748	9.25
FHLB stock		21,974		481	8.76			25,790		448	6.95
Mortgage-backed securities (1)		52,599		611	4.65			67,335		724	4.30
Loans receivable, net (2)		1,670,071		25,003	5.99			1,779,880		27,344	6.15

Total interest-earning assets		1,815,228		27,522	6.06			1,956,862		30,372	6.21

Non-interest-earning assets		95,146						99,227

Total assets	$	1,910,374					$	2,056,089

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	740,380		3,290	1.78		$	721,882		3,657	2.03
Time deposits		443,418		4,574	4.13			520,412		5,672	4.36

Total		1,183,798		7,864	2.66			1,242,294		9,329	3.00
Borrowed funds		482,503		5,423	4.50			549,721		6,635	4.83

Total interest-bearing liabilities		1,666,301		13,287	3.19			1,792,015		15,964	3.56

Non-interest-bearing deposits		104,437						113,007
Non-interest-bearing liabilities		16,143						20,382

Total liabilities		1,786,881						1,925,404
Stockholders’ equity		123,493						130,685

Total liabilities and stockholders’ equity	$	1,910,374					$	2,056,089

Net interest income			$	14,235					$	14,408

Net interest rate spread (3)					2.87	%					2.65	%

Net interest margin (4)					3.14	%					2.95	%

Comparison of Financial Condition at ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007

Total assets at ~~September 30, 2007~~March 31, 2008 were ~~$1.937~~$1.905 billion, a decrease of ~~$140.2~~$22.0 million, compared to ~~$2.077~~$1.927 billion at December 31, ~~2006.~~2007.

Investment and mortgage-backed securities available for sale decreased $34.3 million to $116.4 million at September 30, 2007 as compared to $150.8 million at December 31, 2006 due to calls of investment securities and repayment of mortgage-backed securities. Loans receivable, net decreased by ~~$22.5~~$19.3 million to a balance of ~~$1.679~~$1.657 billion at ~~September 30, 2007,~~March 31, 2008, compared to a balance of ~~$1.701~~$1.676 billion at December 31, ~~2006. Increases of $7.6 million in commercial~~2007 partly due to increased prepayments from refinancings and ~~commercial real estate loans and $19.2 million in consumer loans were more than offset by a decline in one-to-four family mortgage~~the Bank’s ongoing strategy to sell newly originated longer-term fixed rate loans. Mortgage loans held for sale decreased $79.7 million to a balance of $3.2 million at September 30, 2007 compared to a balance of $82.9 million at December 31, 2006. The decrease was reflective of the discontinuance of most of Columbia’s mortgage banking operations.

Deposit balances decreased ~~$61.4~~$3.0 million to ~~$1.311~~$1.281 billion at ~~September 30, 2007~~March 31, 2008 from ~~$1.372~~$1.284 billion at December 31, ~~2006~~2007 as the Bank maintained its disciplined pricing relating to certificates of deposit. Core deposits, defined as all deposits excluding time deposits, however, increased $20.2 million. Total Federal Home Loan Bank borrowings decreased by ~~$80.0~~$29.8 million to ~~$384.5~~$375.2 million at ~~September 30, 2007~~March 31, 2008 as compared to ~~$464.5~~$405.0 million at December 31, ~~2006~~2007 primarily due to ~~lower asset balances. Additionally, during~~ the ~~quarter ended June 30, 2007, the Company issued $10.0 million of debt~~reduction in ~~the form of Trust Preferred Securities which is included in other borrowings.~~loans receivable, net.

Stockholders’ equity at ~~September 30, 2007~~March 31, 2008 decreased slightly to ~~$123.6~~$123.3 million, compared to ~~$132.3~~$124.3 million at December 31, ~~2006. The Company repurchased 49,701 shares of common stock during the nine months ended September 30, 2007 at a total cost of $1.1 million.~~2007. Stockholders’ equity was ~~further~~ reduced by ~~the net loss, the cash dividend and~~ an increase in accumulated other comprehensive ~~loss.~~loss and the cash dividend partially offset by net income.

Comparison of Operating Results for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2008 and March 31, 2007 ~~and September 30, 2006~~

Net income for the three months ended ~~September 30, 2007~~March 31, 2008 was ~~$3.1~~$4.0 million, ~~or $.27 per diluted share,~~ as compared to ~~$4.9~~a loss of $5.4 million ~~or $.42 per diluted share,~~ for the corresponding prior year period. ~~For~~Diluted earnings per share was $.34 for the ~~nine~~three months ended ~~September 30, 2007, the net loss was $2.0 million, or $.18 per diluted share,~~March 31, 2008, as compared to ~~net income~~a diluted loss per share of ~~$14.1 million, or $1.18 per diluted share,~~$.47 for the ~~corresponding~~same prior year period.

Interest income for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 was ~~$28.2~~$27.5 million, ~~and $87.1 million, respectively,~~as compared to ~~$30.3~~$30.4 million, ~~and $86.7 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2006.~~March 31, 2007. The yield on interest-earning assets ~~increased~~declined to ~~6.07%~~6.06% for ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 as compared to ~~6.06% and 5.93%, respectively,~~6.21% for the same prior year ~~periods. Average~~period. Additionally, average interest-earning assets decreased by ~~$139.9~~$141.6 million ~~and $35.5 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 as compared to the same prior year ~~periods~~period partly reflective of the ~~discontinuance of most~~shuttering of Columbia’s mortgage banking operations.

Interest expense for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 was ~~$15.4~~$13.3 million, ~~and $47.2 million, respectively,~~ compared to ~~$15.9~~$16.0 million ~~and $42.4 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2006.~~March 31, 2007. The cost of interest-bearing liabilities ~~increased~~decreased to ~~3.61% and 3.59%, respectively,~~3.19% for the

three ~~and nine~~ months ended ~~September 30, 2007,~~March 31, 2008, as compared to ~~3.47% and 3.18%, respectively,~~3.56% in the same prior year ~~periods. Average~~period. Additionally, average interest-bearing liabilities decreased by ~~$122.5~~$125.7 million ~~and $20.5 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 as compared to the same prior year ~~periods.~~period.

Net interest income for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 decreased to ~~$12.8~~$14.2 million, ~~and $39.9 million, respectively,~~ as compared to ~~$14.5~~$14.4 million ~~and $44.3 million, respectively,~~ in the same prior year ~~periods.~~period reflecting lower levels of interest-earning assets partly offset by a higher net interest margin. The net interest margin ~~decreased~~increased to ~~2.76% and 2.78%, respectively,~~3.14% for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 from ~~2.89% and 3.03%, respectively,~~2.95% in the same prior year ~~periods. The slope of the interest rate yield curve caused the increase in the cost of interest-bearing liabilities to outpace the increase in the yield on interest-earning assets.~~period.

For the three ~~and nine~~ months ended ~~September 30, 2007,~~March 31, 2008, the Bank’s provision for loan losses was ~~$75,000 and $525,000, respectively,~~$375,000, compared to ~~$50,000 and $100,000, respectively,~~$340,000 in the same prior year ~~periods.~~period. Non-performing loans increased ~~to $9.2~~$1.8 million at ~~September 30, 2007~~March 31, 2008 to $10.6 million from ~~$4.5~~$8.7 million at December 31, ~~2006.~~2007. The non-performing loan total includes ~~$887,000~~$1.1 million of repurchased one-to-four family and consumer loans and ~~$3.3~~$3.1 million of one-to-four family and consumer loans previously ~~held-for-sale,~~held for sale, which were previously written down to their fair market value, which included an assessment of each loan’s potential credit impairment. ~~As a result, these loans do not currently require an adjustment to the allowance for loan losses.~~ Loans receivable, net declined modestly during the first ~~nine~~three months of ~~2007 and~~2008 while net charge-offs for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 were ~~$7,000 and $76,000, respectively.~~$104,000, as compared to $1,000 in the same prior year period. The increase in the provision for loan losses was primarily due to the increase in non-performing ~~loans.~~loans and the increase in net charge-offs.

Other income (loss) ~~decreased~~amounted to income of ~~$4.6~~$3.8 million ~~and a loss of $1.6 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2007,~~March 31, 2008, compared to ~~income~~a net loss of ~~$6.6~~$6.4 million ~~and $17.6 million, respectively,~~ for the same prior year ~~periods.~~period. The net gain (loss) and lower of cost or market adjustment on ~~the sale~~sales of loans and securities available for sale was a gain of ~~$1.2 million and a loss of $11.7 million, respectively,~~$597,000, for the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 as compared to a net ~~gain~~loss of ~~$3.5~~$9.6 million ~~and $8.5 million, respectively,~~ for ~~the three and nine months ended September 30, 2006. The decrease in the gain on sale is partly due to the decision to discontinue most operations of Columbia. For~~ the three months ended ~~September 30, 2007, the gain on the sale of loans benefited from a $200,000 reduction to the reserve for repurchased loans.~~March 31, 2007. The net loss on the sale of loans for the ~~nine~~three months ended ~~September 30,~~March 31, 2007 includes a ~~loss of $1.3~~$7.1 million ~~on the bulk sale of subprime loans and lower of cost or market charges of $9.4 million~~charge taken by Columbia to reduce loans held for sale to their current fair market ~~value. Also included in the net loss on the sale of loans for the nine months ended September 30, 2007 is~~value and a ~~$3.8~~$4.0 million charge to increase the reserve for repurchased loans.

~~Fees~~ For the three months ended March 31, 2008, the net gain on the sales of loans includes a reversal of the provision for repurchased loans of $161,000. Also included in the net gain on sales of loans and ~~service charges increased $265,000, or 9.9%, and $870,000, or 11.1%, respectively,~~securities available for sale for the three ~~and nine~~ months ended ~~September 30, 2007, as compared~~March 31, 2008 is a $122,000 gain on the redemption of shares relating to the ~~same prior year periods primarily related to increases in fees generated from trust services and deposit accounts.~~Company’s share of the VISA initial public offering.

Operating expenses were ~~$12.6~~$11.6 million ~~and $41.4 million, respectively,~~ for the three ~~and nine~~ months ended ~~September 30, 2007,~~March 31, 2008, as compared to ~~$13.5~~$15.1 million ~~and $40.2 million, respectively,~~ in the same prior year ~~periods.~~period. The decrease in operating expenses is primarily due to the shuttering of

Columbia in late 2007 which eliminated most, but not all, of the expenses related to this entity. Also, operating expenses for the three months ended ~~September 30,~~March 31, 2007 ~~as compared to the corresponding prior year period was due to the discontinuation~~included an expense of most of the 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. Total severance costs for the nine months ended September 30, 2007 amounted to $879,000. Additionally, occupancy expense for the three and nine months ended September 30, 2007 includes a $375,000 charge for lease termination costs at Columbia. Additionally, included in operating expenses for the nine months ended September 30, 2007 is $1.0 million representing the write-off of the previously established goodwill on the ~~August 2000~~ acquisition of Columbia. Operating expenses also benefited from a reduction in retirement plan expense. Operating expenses for the three months ended March 31, 2008 include costs relating to the opening of a new branch in Freehold, New Jersey.

Income tax expense (benefit) was an expense of ~~$1.6~~$2.0 million ~~and~~for the three months ended March 31, 2008, as compared to a benefit of ~~$1.6~~$2.0 million ~~respectively, for the three and nine months ended September 30, 2007, as compared to an expense of $2.6 million and $7.5 million, respectively,~~ for the same prior year ~~periods.~~period.

The Company’s primary sources of funds are deposits, principal and interest payments on loans and mortgage-backed securities, proceeds from the sale of loans, FHLB and other borrowings and, to a lesser extent, investment maturities. While scheduled amortization of loans is a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by ~~general~~ interest rates, economic conditions and competition. The Company has other sources of liquidity if a need for additional funds arises, including various lines of ~~credit and FHLB advances.~~credit.

At ~~September 30, 2007~~March 31, 2008 the Company had outstanding overnight borrowings from the FHLB of ~~$27.5~~$26.2 million as compared to ~~$42.5~~$58.0 million in overnight borrowings at December 31, ~~2006.~~2007. The Company utilizes the overnight line to fund short-term liquidity needs. The Company had total FHLB borrowings, including overnight borrowings, of ~~$384.5~~$375.2 million at ~~September 30, 2007,~~March 31, 2008, a decrease from ~~$464.5~~$405.0 million at December 31, ~~2006.~~2007.

The Company’s cash needs for the ~~nine~~three months ended ~~September 30,~~March 31, 2008 were primarily satisfied by principal payments on loans and mortgage-backed securities and proceeds from the sale of mortgage loans held for sale. The cash was principally utilized for loan originations, to reduce Federal Home Loan Bank borrowings and to fund deposit outflows. For the three months ended March 31, 2007, the cash needs of the Company were primarily satisfied by principal payments on loans and mortgage-backed securities, maturities or calls of investment securities, proceeds from the sale of mortgage loans held for sale and the issuance of debt in the form of trust preferred securities. The cash was principally utilized for loan originations and repurchases, to fund deposit outflows and reduce Federal Home Loan Bank borrowings. For the nine months ended September 30, 2006, the cash needs of the Company were primarily satisfied by principal payments on loans and mortgage-backed securities, increased deposits and borrowings, and proceeds from the sale of mortgage loans held for sale. The cash provided was principally used for the origination of loans and the repurchase of common stock.

In the normal course of business, the Company routinely enters into various off-balance sheet commitments, primarily relating to the origination and sale of loans. At ~~September 30, 2007,~~March 31, 2008, outstanding commitments to originate loans totaled ~~$62.1~~$56.1 million; outstanding unused lines of credit totaled ~~$188.6~~$179.5 million; and outstanding commitments to sell loans totaled ~~$11.0~~$13.4 million. The Company expects to have sufficient funds available to meet current commitments arising in the normal course of business.

Time deposits scheduled to mature in one year or less totaled ~~$422.8~~$382.9 million at ~~September 30, 2007.~~March 31, 2008. Based upon historical experience management estimates that a significant portion of such deposits will remain with the Company.

Under the Company’s stock repurchase programs, shares of OceanFirst Financial Corp. common stock may be purchased in the open market and through other privately-negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate use. For the ~~nine~~three months ended ~~September 30, 2007,~~March 31, 2008, the Company ~~purchased 49,701~~did not purchase any shares of common stock compared with purchases of 49,701 shares for the three months ended March 31, 2007 at a total cost of $1.1 ~~million compared with purchases of 669,604 shares for the nine months ended September 30, 2006 at a total cost of $15.3~~ million. At ~~September 30, 2007,~~March 31, 2008, there were 489,062 shares remaining to be repurchased under the existing stock repurchase program. Cash dividends declared and paid during the first ~~nine~~three months of ~~2007~~2008 were ~~$6.8~~$2.3 million, ~~a decrease from $6.9~~compared to $2.3 million in the same prior year period. On ~~October 17, 2007,~~April 23, 2008, the Board of Directors declared a quarterly cash dividend of twenty cents ($.20) per common share. The dividend is payable on ~~November~~May 16, ~~2007~~2008 to stockholders of record at the close of business on ~~November~~May 2, ~~2007.~~2008.

The primary sources of liquidity ~~for~~specifically available to OceanFirst Financial Corp., the holding company of OceanFirst Bank, are capital distributions from the banking subsidiary and the issuance of debt instruments. For the first ~~nine~~three months of ~~2007,~~2008, OceanFirst Financial Corp. received no dividend payments from OceanFirst Bank. ~~The~~Pursuant to Office of Thrift Supervision (“OTS”) ~~has previously notified~~regulations, a notice is currently required to be filed with the OTS prior to the Bank ~~that it does not object~~paying a dividend to OceanFirst Financial Corp. In addition, the ~~payment~~OTS has the regulatory authority to impose restrictions on the ability of ~~capital dividends, so long as~~ the Bank ~~remains well capitalized after each capital distribution, and also maintains~~to pay a dividend, including maintaining higher tier one core ~~leverage ratio above 6.0% and a total risk-based capital ratio above 10.5% after each capital distribution. The Bank’s tier one core leverage ratio~~ and total risk-based capital ~~ratio~~ratios. Based on the current regulatory environment and the

impact to the Bank of the losses suffered at ~~September 30, 2007 were 6.9%~~Columbia and ~~10.9%, respectively. Applicable Federal law or~~the current projected earnings and capital needs, the Company expects the OTS ~~may further limit~~to carefully consider any proposals by the ~~amount of capital distributions~~Bank to pay a dividend to OceanFirst

~~Bank may make.~~ Financial Corp. OceanFirst Financial Corp.’s ability to continue to pay dividends and repurchase stock is partly dependent upon capital distributions from OceanFirst Bank and may be adversely affected by capital constraints imposed by the Bank’s current capital constraints. The Company raised $10.0 million during the second quarter of 2007 from the issuance of trust preferred securities. The trust preferred securities carry a floating rate of 175 basis points over 3 month LIBOR and adjust quarterly. Accrued interest is due quarterly with principal due at the maturity date of September 1, 2037.OTS. At ~~September 30, 2007,~~March 31, 2008, OceanFirst Financial Corp. held ~~$6.4~~$2.6 million in cash and ~~$6.3~~$5.9 million in investment securities available for sale. Additionally, OceanFirst Financial Corp. has an available line of credit for up to $4.0 million.

At ~~September 30, 2007,~~March 31, 2008, the Bank exceeded all of its regulatory capital requirements with tangible capital of ~~$134.0~~$142.1 million, or ~~6.9%~~7.4% of total adjusted assets, which is above the required level of ~~$29.1~~$28.6 million or 1.5%; core capital of ~~$134.0~~$142.1 million or ~~6.9%~~7.4% of total adjusted assets, which is above the required level of ~~$58.1~~$57.2 million, or 3.0%; and risk-based capital of ~~$144.3~~$152.2 million, or ~~10.9%~~11.6% of risk-weighted assets, which is above the required level of ~~$105.5~~$104.6 million or 8.0%. The Bank is considered a “well-capitalized” institution under the Office of Thrift Supervision’s Prompt Corrective Action Regulations.

In the normal course of operations, the Company engages in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in the financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used for general corporate purposes or for customer needs. Corporate purpose transactions are used to help manage credit, interest rate, and liquidity risk or to optimize capital. Customer transactions are used to manage customers’ requests for funding. These financial instruments and commitments include unused consumer lines of credit and commitments to extend credit. The Company also has outstanding commitments to sell loans amounting to ~~$11.0~~$13.4 million.

The following table shows the contractual obligations of the Company by expected payment period as of ~~September 30, 2007~~March 31, 2008 (in thousands):


Contractual Obligation	Total		Less than One year		1-3 years		3-5 years		More than 5 years		Total		Less than One year		1-3 years		3-5 years		More than 5 years
Debt Obligations	$	481,742	$	198,242	$	218,000	$	38,000	$	27,500	$	476,065	$	222,565	$	188,000	$	38,000	$	27,500
Commitments to Originate Loans	$	62,060	$	62,060		—		—		—		56,080		56,080		—		—		—
Commitments to Fund Unused Lines of Credit	$	188,559	$	188,559		—		—		—		179,463		179,463		—		—		—

Debt obligations include borrowings from the FHLB, Securities Sold under Agreements to Repurchase and other borrowings. The borrowings have defined terms and, under certain circumstances, ~~$40.0~~$25.0 million of the borrowings from the FHLB are callable at the option of the lender and $27.5 million of the other borrowings are callable at the option of the ~~lender.~~Company.

Commitments to originate loans and commitments to fund unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company’s exposure to credit risk is represented by the contractual amount of the instruments.

The following table sets forth information regarding the Company’s non-performing assets consisting of non-accrual loans and Real Estate Owned (“REO”). It is the policy of the Company to cease accruing interest on loans 90 days or more past due or in the process of foreclosure.


	September 30, 2007			December 31, 2006				March 31, 2008			December 31, 2007
	(dollars in thousands)							(dollars in thousands)
Non-accrual loans:
Non-performing loans:
Real estate – One-to-four family	$	6,144		$	2,703			$	6,856		$	6,620
Commercial Real Estate		1,739			286				2,369			1,040
Construction									233			—
Consumer		414			281		��		626			586
Commercial		865			1,255				466			495

Total non-performing loans		9,162			4,525				10,550			8,741
REO, net		433			288				933			438

Total non-performing assets	$	9,595		$	4,813			$	11,483		$	9,179


Allowance for loan losses as a percent of total loans receivable		.63	%		.57	%			.64	%		.62	%
Allowance for loan losses as percent of total non-performing loans		116.64			226.25				101.79			119.76
Non-performing loans as a percent of total loans receivable		.54			.25				.63			.52
Non-performing assets as a percent of total assets		.50			.23				.60			.48

The non-performing loan total includes ~~$887,000~~$1.1 million of repurchased one-to-four family and consumer loans and ~~$3.3~~$3.1 million of one-to-four family and consumer loans previously held for sale, which were ~~previously~~ written down to their fair market ~~value.~~value in a prior period. The increase is primarily related to one commercial real estate ~~category includes an $883,000 relationship~~loan for $1.5 million that became non-performing during the ~~construction~~first quarter. The loan, which is in the jurisdiction of ~~townhouses which has experienced sales delays.~~the Bankruptcy Court, is fully secured by two properties whose anchor tenants are branches of a national bank. The Company also classifies assets in accordance with certain regulatory guidelines. At ~~September 30, 2007~~March 31, 2008 the Company had ~~$10.2~~$11.4 million designated as Special Mention, ~~$11.9~~$14.6 million classified as Substandard and ~~$105,000~~$14,900 classified as Doubtful as compared to ~~$18.2 million,~~ $8.2 million, $12.4 million and ~~$185,000,~~$15,000, respectively, ~~designated as Special Mention and classified as Substandard and Doubtful~~ at December 31, ~~2006.~~2007. The largest Substandard relationship at ~~September 30, 2007~~March 31, 2008 is comprised of two loans totaling $2.2 million for a ~~start-up~~service business for which operating revenue is not currently supporting the debt obligation. The loans are current as to payments. The largest Special Mention relationship at ~~September 30, 2007~~March 31, 2008 comprised several credit facilities to a large, real estate agency with an aggregate balance of ~~$4.4~~$3.4 million which was current as to payments, but criticized due to ~~declining revenue~~poor operating results. The loans are secured by commercial real estate and ~~net income~~the personal guarantee of the ~~borrower.~~principals. During the first quarter of 2008, a $3.2 million loan relationship was added to the Special Mention category. This relationship comprised several credit facilities to a manufacturing company which was current as to payments, but criticized due to poor operating results. The loans are secured by commercial real estate and corporate assets and the personal guarantee of the principals. Included in the Substandard ~~and Doubtful categories~~category are all of the non-performing loans noted above.

In addition to historical information, this quarterly report 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 statements. The Company does not ~~undertake -~~ undertake—and specifically disclaims any ~~obligation -~~ 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. Further description of the risks and uncertainties to the business are included in Item 1, Business and Item 1A, Risk Factors of the Company’s ~~2006~~2007 Form 10-K.

The Company’s interest rate sensitivity is monitored through the use of an interest rate risk (“IRR”) model. The following table sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at ~~September 30, 2007~~March 31, 2008 which were anticipated by the Company, based upon certain assumptions, to reprice or mature in each of the future time periods shown. At ~~September 30, 2007~~March 31, 2008 the Company’s one-year gap was negative ~~12.55%~~9.35% as compared to negative ~~0.80%~~9.57% at December 31, ~~2006.~~2007.

Additionally, the table below sets forth the Company’s exposure to interest rate risk as measured by the change in net portfolio value (“NPV”) and net interest income under varying rate shocks as of ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006.~~2007. All methods used to measure interest rate sensitivity involve the use of assumptions, which may tend to oversimplify the manner in which actual yields and costs respond to changes in market interest rates. The Company’s interest rate sensitivity should be reviewed in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report for the year ended December 31, ~~2006.~~2007.


	March 31, 2008											December 31, 2007
	Net Portfolio Value							Net Interest Income				Net Portfolio Value						Net Interest Income
Change in Interest Rates in Basis Points (Rate Shock)	Amount		% Change		NPV Ratio			Amount		% Change		Amount		% Change		NPV Ratio		Amount		% Change
(dollars in thousands)
200	$	111,710	(25.8	)%	6.1	%		$	54,808	(9.9	)%	$	125,181	(25.3	)%	6.8	%	$	51,081	(10.2	)%
100		134,310	(10.8	)	7.2				58,128	(4.5	)		149,672	(10.7	)	8.0			54,350	(4.4	)
Static		150,599	—		7.9		��		60,846	—			167,675	—		8.7			56,872	—
(100)		151,877	0.8		7.9				61,621	1.3			171,050	2.0		8.8			57,770	1.6
(200)		144,471	(4.1	)	7.5				60,821	0.0			163,057	(2.8	)	8.4			56,245	(1.1	)

~~Item 4.~~

~~Controls and Procedures~~

The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. Disclosure controls and procedures are the controls and other procedures that are designed to ensure that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

~~At December 31, 2006, the Company’s policies and procedures were not effective to provide for the proper~~ In addition, based on that evaluation, and assessment of the adequacy of its reserve for repurchased loans at its mortgage banking subsidiary. Specifically, the Company lacked an effective process to ensure that the exercise of loan repurchase requests by purchasers of its loans were timely identified and incorporated properly in the analysis of its reserve for repurchased loans. This deficiency resulted in material misstatements in the Company’s reserve for repurchased loans and amounts recorded as a gain on sales of loans at December 31, 2006 and resulted in more than a remote likelihood that a material misstatement of the Company’s annual or interim consolidated financial statements would not be prevented or detected. These misstatements were corrected in the consolidated financial statements included in the December 31, 2006 Form 10-K.

During 2007, the Company implemented a remediation plan to address the material weakness in internal control over financial reporting which existed at December 31, 2006. To address the material weakness, during the first quarter of 2007, the Company enhanced its policies and procedures related to the quarterly evaluation of the adequacy of the reserve for repurchased loans. All repurchase requests received must be reported to a committee of senior officers of the Bank for evaluation and incorporation into the analysis of the reserve for repurchased loans. The Company proactively monitors the receipt of repurchase requests. Additionally, the Company’s mortgage banking subsidiary modified its mortgage loan product menu to eliminate the origination of subprime loans. Furthermore, the Company has taken disciplinary action against certain officers of the mortgage banking subsidiary responsible for not following established policies and procedures. Finally, the Bank determined to discontinue most of the operations of Columbia while merging the remaining functions into the Bank’s operations.

~~Except as described above,~~ there were no changes in the Company’s internal control over financial reporting during the quarter ended ~~September 30, 2007~~March 31, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is not engaged in any legal proceedings of a material nature at the present time. From time to time, the Company is a party to routine legal proceedings within the normal course of business. Such routine legal proceedings in the aggregate are believed by management to be immaterial to the Company’s financial condition or results of operations.

Information regarding the Company’s common stock repurchases for the three month period ended ~~September 30, 2007~~March 31, 2008 is as follows:

On July 19, 2006, the Company announced its intention to repurchase up to an additional 615,883 shares, or 5%, of its outstanding common stock.

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, thereunto duly authorized.


975 Hooper Avenue, Toms River, NJ		08754-2009
(Address of principal executive offices)		(Zip Code)


PART I.	FINANCIAL INFORMATION
		PAGE
~~PART I~~. Item 1.	~~FINANCIAL INFORMATION~~

~~Item 1.~~	Consolidated Financial Statements (Unaudited)

	Consolidated Statements of Financial Condition as of ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007	1

	Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~	2

	Consolidated Statements of Changes in Stockholders’ Equity for the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~	3

	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~	4

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	810

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	17

PART IIII..	OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	18

Item 3. 4.	~~Defaults Upon Senior Securities~~	18

~~Item 4.~~	Submission of Matters to a Vote of Security Holders	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

Signatures		19


	September 30, 2007		December 31, 2006
Type of Account

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


	March 31, 2008		December 31, 2007
Type of Account

Non-interest-bearing	$	110,085	$	103,656
Interest-bearing checking		458,497		454,666
Money market deposit		85,479		84,287
Savings		195,876		187,095
Time deposits		430,872		454,086

	$	1,280,809	$	1,283,790


	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Securities available for sale	$	750	$	102,704	$	—	$	103,454


	FOR THE QUARTERS ENDED SEPTEMBER 30,
	2007						2006
	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	$	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 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	$	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	%


At June 30, 2007	3 Months or Less			More than 3 Months to 1 Year			More than 1 Year to 3 Years			More than 3 Years to 5 Years			More than 5 Years			Total
(dollars in thousands)
Interest-earning assets: (1)
Interest-earning deposits and short-term investments	$	2,942		$	—		$	—		$	—		$	—		$	2,942
Investment securities		54,953			295			—			—			7,333			62,581
FHLB stock		—			—			—			—			22,040			22,040
Mortgage-backed securities		6,687			13,302			26,471			8,619			3,217			58,296
Loans receivable (2)		253,724			330,642			539,429			272,709			291,195			1,687,699

Total interest-earning assets		318,306			344,239			565,900			281,328			323,785			1,833,558

Interest-bearing liabilities:
Money market deposit accounts		3,936			11,808			31,489			39,209			—			86,442
Savings accounts		10,670			26,172			69,791			87,239			—			193,872
Interest-bearing checking accounts		155,432			40,965			109,241			136,557			—			442,195
Time deposits		113,030			309,922			41,270			9,692			1,030			474,944
FHLB advances		37,500			91,000			205,000			38,000			—			371,500
Securities sold under agreements to repurchase		69,742			—			13,000			—			—			82,742
Other borrowings		22,500			—			—			—			5,000			27,500

Total interest-bearing liabilities		412,810			479,867			469,791			310,697			6,030			1,679,195

Interest sensitivity gap (3)	$	(94,504	)	$	(135,628	)	$	96,109		$	(29,369	)	$	317,755		$	154,363

Cumulative interest sensitivity gap	$	(94,504	)	$	(230,132	)	$	(134,023	)	$	(163,392	)	$	154,363		$	154,363

Cumulative interest sensitivity gap as a percent of total interest-earning assets		(5.15	)%		(12.55	)%		(7.31	)%		(8.91	)%		8.42	%		8.42	%


At March 31, 2008	3 Months or Less			More than 3 Months to 1 Year			More than 1 Year to 3 Years			More than 3 Years to 5 Years			More than 5 Years			Total
(dollars in thousands)
Interest-earning assets: (1)
Interest-earning deposits and short- term investments	$	4,828		$	—		$	—		$	—		$	—		$	4,828
Investment securities		55,287			—			—			—			7,967			63,254
FHLB stock		—			—			—			—			21,627			21,627
Mortgage-backed securities		5,011			22,111			14,969			7,184			553			49,828
Loans receivable (2)		248,107			402,968			548,568			243,249			223,956			1,666,848

Total interest-earning assets		313,233			425,079			563,537			250,433			254,103			1,806,385

Interest-bearing liabilities:
Money market deposit accounts		3,885			11,656			31,083			38,855			—			85,479
Savings accounts		8,860			27,531			70,882			88,603			—			195,876
Interest-bearing checking accounts		188,731			38,526			102,736			128,504			—			458,497
Time deposits		253,604			129,296			35,759			10,986			1,227			430,872
FHLB advances		64,200			85,000			188,000			38,000			—			375,200
Securities sold under agreements to repurchase		73,365			—			—			—			—			73,365
Other borrowings		22,500			—			—			—			5,000			27,500

Total interest-bearing liabilities		615,145			292,009			428,460			304,948			6,227			1,646,789

Interest sensitivity gap (3)	$	(301,912	)	$	133,070		$	135,077		$	(54,515	)	$	247,876		$	159,596

Cumulative interest sensitivity gap	$	(301,912	)	$	(168,842	)	$	(33,765	)	$	(88,280	)	$	159,596		$	159,596

Cumulative interest sensitivity gap as a percent of total interest-earning assets		(16.71	)%		(9.35	)%		(1.87	)%		(4.89	)%		8.84	%		8.84	%


Period	Total Number of Shares Purchased	Average price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2007 through July 31, 2007	0	—	0	489,062
August 1, 2007 through August 31, 2007	0	—	0	489,062
September 1, 2007 through September 30, 2007	0	—	0	489,062


Period	Total Number of Shares Purchased (1)	Average price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2008 through January 31, 2008	-0-		-0-	-0-	489,062
February 1, 2008 through February 29, 2008	-0-		-0-	-0-	489,062
March 1, 2008 through March 31, 2008	1,040	$	16.55	-0-	489,062


Exhibits:

3.1		Certificate of Incorporation of OceanFirst Financial Corp.*

3.2		Bylaws of OceanFirst Financial Corp.**

4.0		Stock Certificate of OceanFirst Financial Corp.*

31.1		Rule 13a-14(a)/15d-14(c) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(c) Certification of Chief Financial Officer

32.0		Section 1350 Certifications


				OceanFirst Financial Corp.
				Registrant

DATE: ~~November 8, 2007~~May 9, 2008				/s/ John R. Garbarino
				John R. Garbarino
				Chairman of the Board, President and Chief Executive Officer

DATE: ~~November 8, 2007~~May 9, 2008				/s/ Michael J. Fitzpatrick
				Michael J. Fitzpatrick
				Executive Vice President and Chief Financial Officer


Exhibit	Description	Page
31.1	Rule 13a-14(a)/15d-14(c) Certification of Chief Executive Officer	21

31.2	Rule 13a-14(a)/15d-14(c) Certification of Chief Financial Officer	22

32.0	Section 1350 Certifications	23