NJ Bank Revises Earnings on Subprime Losses

OceanFirst Financial Corp., Toms River, N.J., has revised its fourth quarter and full year 2006 earnings after previously revealing it failed to set aside reserves for early payment defaults for subprime loans made by its Columbia Home Loans subsidiary.OceanFirst has established a $9.6 million reserve for $148.2 million in 100% loan-to-value subprime loans originated by Columbia in 2006. OceanFirst said that Columbia's officers failed to report investor repurchase demands made as a result of early payment defaults. As a result it has discontinued originating subprime loans and "taken disciplinary action" against "certain officers of Columbia." The reserve caused OceanFirst to post a loss of $0.13 per share for the fourth quarter; it originally posted profits of $0.40 per share. For the year, it had a net profit of $1.07 per share; the original announcement was for profits of $1.59 per share.