OceanFirst Financial Corp. to Redeem All Outstanding Preferred Shares Amid Market Uncertainty,

OceanFirst Financial Corp.
Announces Complete Redemption of Preferred Shares Amid Market Volatility

In a strategic maneuver aimed at refining its capital structure, OceanFirst Financial Corp.
(NASDAQ: OCFC) has announced the upcoming redemption of all 57,370 shares of its 7.00% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (the Series A Preferred Stock).
This decision will culminate on May 15, 2025, coinciding with the next scheduled dividend payment date for the series.

OceanFirst, headquartered in Red Bank, N.J. disclosed that the redemption will be executed at a cash price of $1,000 per share (equivalent to $25 per Depositary Share), amounting to a total liability of approximately $57.37 million.
Notably, this Redemption Price excludes the previously declared dividend that will be paid on the same date.
Current shareholders holding the Series A Preferred Stock will receive their dividend as of the record date, ensuring they are rewarded before the shares are redeemed.

On the same day as the redemption, the depositary for the Series A Preferred Stock will also redeem 2,294,800 depositary shares, each representing a 1/140th interest in a share of the Series A Preferred Stock, effectively tying up the remaining obligations tied to this preferred equity.

This announcement follows a period of improvement in OceanFirst?s investment grade ratings, which has boosted market confidence, as highlighted in their press release dated January 21, 2025.
The ratings upgrade has likely played a role in the company?s strategy to optimize its capital structure, making the redemption a timely move in light of new opportunities for refinancing or potentially lowering capital costs.

However, the company?s share price reveals a troubling trajectory for investors.
As of the writing of this article, OceanFirst s share price stands at $14.76, reflecting a steep year-to-date decline of 17.17%. This performance raises questions about the market s response to OceanFirst?s strategies and the broader economic conditions impacting the banking sector.

Analysts will be closely monitoring how the market reacts to the redemption of the Series A Preferred Stock, as the strategic implications are significant.
Should the company leverage its improved ratings and execute a solid post-redemption strategy, it may regain investor confidence and reverse its current downward trend.

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