Jul. 23--OceanFirst Financial Corp.'s net income declined 13.4 percent during the second quarter as the bank set aside more money to cover bad loans, the company reported Thursday.

The Toms River-based parent company of OceanFirst Bank reported net income attributable to common stock holders of $3.1 million, or 26 cents a share, for the second quarter, compared with net income of $3.5 million, or 30 cents a share, for the same quarter a year ago.

OceanFirst is the biggest Ocean County-based bank, with $1.4 billion in deposits and 23 branches in Ocean, Monmouth and Middlesex counties.

Its earnings report was released after the stock market closed Thursday. Its stock has fallen about 30 percent since the beginning of the year.

The company reported that its nonperforming loans rose to $20.9 million on June 30 from $16 million at the end of the year, mainly because of residential and consumer loans that soured during the recession.

The company also reported it remains well-capitalized. Its losses from commercial real estate loans eased and the margin between interest it earned from loans and interest it paid for deposits widened.

OceanFirst Chief Executive Officer John R. Garbarino said the company was moving forward with its acquisition of Ocean Township-based Central Jersey Bancorp, first announced in May.

"The acquisition... will improve our near- and long-term earnings prospects and position us to compete effectively as a larger, stronger community bank," Garbarino said.

Other bank earnings released Thursday:

Wayne-based Valley National Bank said net income in the second quarter fell 63.9 percent because it set aside more money for bad loans and paid a higher assessment to the Federal Deposit Insurance Corp.

The company reported net income of $15 million, or 6 cents a share, for the quarter, compared with net income of $41.5 million, or 31 cents a share, the same quarter a year ago.

Valley National Bank has 12 branches in Monmouth and Ocean counties.

Pittsburgh-based PNC Financial Services Inc. reported an 87 percent decline in second-quarter profit because credit quality has deteriorated during the recession.

The company reported net income attributable to common shareholders of $65 million, or 14 cents a share, for the quarter, compared with net income of $505 million, or $1.45 a share, the same quarter a year ago.

PNC Financial Services has 34 branches in Monmouth and Ocean counties.

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