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OceanFirst Financial Corp. Announces Stronger Quarterly Earnings, Increased Dividend

TOMS RIVER, N.J., Oct. 23, 2014 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (Nasdaq:OCFC), (the "Company"), the holding company for OceanFirst Bank (the "Bank"), today announced that diluted earnings per share increased to $0.31 for the quarter ended September 30, 2014, as compared to $0.29 for the corresponding prior year quarter. For the nine months ended September 30, 2014, diluted earnings per share increased to $0.89, as compared to $0.84 for the corresponding prior year period. Additionally, the quarterly dividend was increased by 8.3%, to $0.13 per share. Further highlights for the quarter included:

  • Commercial loans outstanding increased $27.2 million, the fifth consecutive quarter of double digit growth.
  • Non-performing loans decreased $22.3 million, or 54.8%.

The $0.13 cash dividend represents a 42% payout of current earnings and is the Company's seventy-first consecutive quarterly cash dividend on common stock. The dividend for the quarter ended September 30, 2014 will be paid November 14, 2014 to shareholders of record on November 3, 2014.

On September 30, 2014 the Company took advantage of favorable market conditions to complete the bulk sale of certain non-performing residential mortgage loans with an aggregate carrying value of $23.1 million, for net cash consideration of $18.7 million. The sale resulted in a total loan charge-off of $5.0 million through the Allowance for Loan Losses in the quarter ended September 30, 2014. The sale represented 56.9% of the Company's reported non-performing loans at June 30, 2014.

Chairman and Chief Executive Officer, John R. Garbarino, stated, "We are pleased to deliver this increased quarterly dividend to our shareholders, which underscores our confidence in the future earning power of our Company to sustain our targeted payout of current earnings. Our continued strong commercial loan growth and the strategic measures we have taken in recent periods prepare OceanFirst for the evolving economic environment and opportunities that lie ahead."

Results of Operations

Net income for the three and nine months ended September 30, 2014 was $5.2 million and $15.0 million, respectively, or $0.31 per diluted share and $0.89 per diluted share, respectively, as compared to net income of $5.0 million and $14.4 million, respectively, or $0.29 per diluted share and $0.84 per diluted share, respectively, for the corresponding prior year periods. The increases were primarily due to improved net interest income, higher other income primarily relating to gains on the sale of securities, partly offset by increased operating expenses. Net income for the nine months ended September 30, 2014 also benefited from a reduction in the provision for loan losses. Additionally, earnings per share for both the three and nine months ended September 30, 2014 benefited from the reduction in average shares outstanding.

Net interest income for the three and nine months ended September 30, 2014 increased to $18.1 million and $54.3 million, respectively, as compared to $17.5 million and $52.3 million, respectively, for the same prior year periods, reflecting an increase in the net interest margin. The net interest margin increased to 3.27% and 3.33%, respectively, for the three and nine months ended September 30, 2014 from 3.20% and 3.19% for the same prior year periods. The yield on average interest-earning assets decreased to 3.63% and 3.66%, respectively, for the three and nine months ended September 30, 2014, as compared to 3.64% and 3.67% for corresponding prior year periods. Despite the one basis point decline in each period, the asset yield benefited from a shift in the mix of interest-earning assets as average loans receivable, net increased $112.7 million and $78.2 million, respectively, for the three and nine months ended September 30, 2014, while average interest-earning securities decreased $101.9 million and $67.2 million, respectively, as compared to the same prior year periods. The cost of average interest-bearing liabilities decreased to 0.45% and 0.40%, respectively, for the three and nine months ended September 30, 2014, as compared to 0.53% and 0.57%, respectively, for the same prior year periods. The decrease was partly due to the prepayment of $159.0 million of Federal Home Loan Bank ("FHLB") advances with a weighted average cost of 2.31% in the fourth quarter of 2013. Average interest-earning assets increased $21.0 million for the three months ended September 30, 2014, as compared to the same prior year period. For the nine months ended September 30, 2014, average interest-earning assets decreased $7.6 million as compared to the same prior year period.

For the three months ended September 30, 3014, net interest income decreased by $59,000, as compared to the prior linked quarter primarily due to a decrease in net interest margin to 3.27% from 3.35%. The decrease in the net interest margin was partly due to a temporary increase in low yielding interest-earning deposits and short-term investments of $30.0 million caused by seasonally high deposit flows. Additionally, the average cost of borrowed funds increased to 1.27% for the three months ended September 30, 2014, as compared to 0.91% in the prior linked quarter as the Company extended overnight borrowings into longer-term borrowings.

For the three and nine months ended September 30, 2014, the provision for loan losses was $1.0 million and $1.8 million, respectively, as compared to $700,000 and $2.6 million, respectively, for the corresponding prior year periods and $275,000 for the prior linked quarter. The increase for the three months ended September 30, 2014, as compared to the prior linked quarter and prior year quarter was due to the non-performing loan sale which resulted in a charge-off of $5.0 million on these loans. Also, for the three months ended September 30, 2014 there were additional net charge-offs of $654,000 on loans retained in the loan portfolio as compared to net charge-offs of $273,000 in the prior linked quarter and $633,000 in the prior year quarter. In evaluating the level of the Allowance for Loan Losses at September 30, 2014 and related provision for loan losses, the Company considered the improved risk profile of the loan portfolio in light of the significant reduction in residential non-performing loans from the bulk sale and an improvement in the collectability of several commercial loans. Non-performing loans amounted to $18.4 million at September 30, 2014, a decrease of $22.3 million, or 54.8%, as compared to June 30, 2014 and $27.0 million, or 59.5% as compared to December 31, 2013. Non-performing loans as a percent of total loans receivable decreased to 1.11% at September 30, 2014, as compared to 2.44% at June 30, 2014 and 2.88% at December 31, 2013. Additionally, the allowance for loan losses as a percent of total non-performing loans increased to 88.68% at September 30, 2014, from 51.44% at June 30, 2014 and 46.14% at December 31, 2013.

For the three and nine months ended September 30, 2014, other income increased to $5.3 million and $14.0 million, respectively, as compared to $4.4 million and $12.4 million, respectively, in the same prior year periods. For the three and nine months ended September 30, 2014, fees and service charges increased $280,000 and $862,000, respectively, as compared to the same prior year periods primarily due to a revised fee and product structure. For the three and nine months ended September 30, 2014, the net gain on the sale of loans decreased to $226,000 and $577,000, respectively, as compared to $316,000 and $877,000, respectively, in the same prior year periods. The gain on the sale of loans for the nine months ended September 30, 2013 was adversely impacted by a provision of $975,000 added to the reserve for repurchased loans and loss sharing obligations, as compared to no provision in the current period. The prior year provision was related to loans sold to the FHLB as part of its Mortgage Partnership Finance program. Compared to prior periods, the gain on sale of loans was adversely impacted by reductions in loans sold, as increasing longer-term interest rates reduced one-to-four family loan refinance activity. For both the three and nine months ended September 30, 2014, the Company recognized gains of $591,000 and $938,000, respectively, on the sale of equity securities, as compared to gains of $0 and $42,000, respectively, in the corresponding prior year periods.

For the three months ended September 30, 2014, other income increased $457,000 as compared to the prior linked quarter due to an increase of $243,000 in the gain on sale of equity securities and an increase of $119,000 in fees and service charges relating to the revised fee and product structure implemented in the second quarter.

Operating expenses increased to $14.4 million and $43.4 million, respectively, for the three and nine months ended September 30, 2014, as compared to $13.7 million and $39.8 million, respectively, in the same prior year periods. Compensation and employee benefits expense increased $349,000 and $2.5 million, respectively, for the three and nine months ended September 30, 2014, as compared to the same prior year periods, primarily due to personnel additions in revenue producing areas. Additionally, compensation and employee benefits expense for the nine months ended September 30, 2014 includes $196,000 in non-recurring severance related expenses due to the Company's second quarter strategic decision to improve efficiency in the residential mortgage loan area. For the three months ended September 30, 2014, professional fees increased by $346,000 as compared to the corresponding prior year period.

For the three months ended September 30, 2014, operating expenses decreased $398,000 as compared to the prior linked quarter. Compensation and employee benefits expense decreased $385,000 partly due to the inclusion of non-recurring severance expense in the prior linked quarter and the full benefit of the related personnel reductions in the current quarter. Marketing expenses decreased by $316,000 due to a promotional campaign in the prior quarter to attract retail checking accounts and incent bankcard usage while professional fees increased $181,000.

The provision for income taxes was $2.8 million and $8.1 million, respectively, for the three and nine months ended September 30, 2014, as compared to $2.7 million and $7.8 million, respectively, for the same prior year periods. The effective tax rate was 35.1% for both the three and nine months ended September 30, 2014, as compared to 34.9% and 35.2%, respectively, in the same prior year periods and 35.1% for the prior linked quarter.

Financial Condition

Total assets increased by $59.0 million to $2,308.7 million at September 30, 2014, from $2,249.7 million at December 31, 2013. Loans receivable, net, increased by $90.6 million, to $1,632.0 million at September 30, 2014 from $1,541.5 million at December 31, 2013, primarily due to growth in commercial loans of $90.0 million. On June 30, 2014 the Company purchased a pool of performing, locally originated, one-to-four family, non-conforming mortgage loans for $20.6 million and on September 30, 2014, the Company sold a pool of non-performing loans with a book balance of $23.1 million. The increase in loans receivable, net was partly offset by a decrease in total securities of $31.9 million.

Deposits increased by $34.5 million, to $1,781.2 million at September 30, 2014, from $1,746.8 million at December 31, 2013, due to growth in non-interest-bearing deposit accounts of $69.5 million relating to a revised fee and product structure adopted in the second quarter. To fund loan growth, FHLB advances increased $30.2 million, to $205.2 million at September 30, 2014, from $175.0 million at December 31, 2013. Stockholders' equity increased to $218.7 million at September 30, 2014, as compared to $214.4 million at December 31, 2013, as net income for the period was partly offset by the repurchase of 334,630 shares of common stock for $5.6 million (average cost per share of $16.62) and the cash dividend on common stock. At September 30, 2014, there were 835,059 shares available for repurchase under the stock repurchase program adopted in July of 2014. Tangible stockholders' equity per common share was $12.77 at September 30, 2014, as compared to $12.33 at December 31, 2013.

Compared to the prior linked quarter, total assets decreased $20.4 million primarily due to a reduction of $16.2 million in cash and due from banks. Loans receivable, net increased $207,000, as $27.2 million in commercial loan growth was offset by the sale of non-performing loans with a book value of $23.1 million. Deposits increased by $75.7 million primarily due to a seasonal increase in government deposits. The increase in deposits and the reduction in excess cash were used to reduce FHLB advances which decreased $99.8 million during the quarter. The Company repurchased 32,864 shares of common stock during the quarter for $541,000 (average cost per share of $16.46).

Asset Quality

The Company's non-performing loans totaled $18.4 million at September 30, 2014, a $22.3 million decrease from June 30, 2014 and a $27.0 million decrease from December 31, 2014 primarily due to the bulk sale of non-performing loans with a book value of $23.1 million. Non-performing loans as a percent of total loans receivable decreased to 1.11% at September 30, 2014, as compared to 2.44% at June 30, 2014 and 2.88% at December 31, 2013.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, October 24, 2014 at 11:00 a.m. Eastern time. The direct dial number for the call is (888) 338-7143. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10052761 from one hour after the end of the call until January 20, 2015. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered savings bank with $2.3 billion in assets and twenty-three branches located in Ocean, Monmouth and Middlesex Counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.'s press releases are available by visiting us at www.oceanfirst.com.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence. 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 its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank's lending area, real estate market values in the Bank's lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, 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 are further discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
September 30, 2014 June 30, 2014 December 31, 2013 September 30, 2013
ASSETS (unaudited) (unaudited) (unaudited)
Cash and due from banks $ 27,657 $ 43,817 $ 33,958 $ 44,055
Securities available-for-sale, at estimated fair value 20,683 32,303 43,836 68,968
Securities held-to-maturity, net (estimated fair value of $493,059 at September 30, 2014, $485,124 at June 30, 2014, $495,082 at December 31, 2013 and $517,173 at September 30, 2013, respectively) 486,819 478,389 495,599 514,022
Federal Home Loan Bank of New York stock, at cost 14,785 20,246 14,518 15,211
Loans receivable, net 1,632,026 1,631,819 1,541,460 1,522,425
Mortgage loans held for sale 3,096 1,295 785 2,566
Interest and dividends receivable 5,579 5,317 5,380 6,087
Other real estate owned 6,466 4,968 4,345 4,259
Premises and equipment, net 24,690 24,430 23,684 22,641
Servicing asset 3,577 3,772 4,178 4,314
Bank Owned Life Insurance 55,668 55,286 54,571 54,233
Deferred tax asset 15,612 15,417 15,239 15,416
Other assets 12,043 12,082 12,158 12,091
Total assets $ 2,308,701 $ 2,329,141 $ 2,249,711 $ 2,286,288
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 1,781,227 $ 1,705,510 $ 1,746,763 $ 1,768,914
Securities sold under agreements to repurchase with retail customers 61,457 62,341 68,304 69,951
Federal Home Loan Bank advances 205,196 305,000 175,000 189,000
Other borrowings 27,500 27,500 27,500 27,500
Advances by borrowers for taxes and insurance 6,716 6,896 6,471 8,230
Other liabilities 7,955 6,053 11,323 8,924
Total liabilities 2,090,051 2,113,300 2,035,361 2,072,519
Stockholders' equity:
Preferred stock, $.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, no shares issued
Common stock, $.01 par value, 55,000,000 shares authorized, 33,566,772 shares issued and 17,118,314, 17,144,693, 17,387,049 and 17,386,060 shares outstanding at September 30, 2014, June 30, 2014, December 31, 2013 and September 30, 2013, respectively 336 336 336 336
Additional paid-in capital 264,948 264,592 263,319 263,125
Retained earnings 214,952 211,819 206,201 206,291
Accumulated other comprehensive loss (7,189) (6,902) (6,619) (7,011)
Less: Unallocated common stock held by Employee Stock Ownership Plan (3,401) (3,458) (3,616) (3,688)
Treasury stock, 16,448,458, 16,422,079, 16,179,723 and 16,180,712 shares at September 30, 2014, June 30, 2014, December 31, 2013 and September 30, 2013, respectively (250,996) (250,546) (245,271) (245,284)
Common stock acquired by Deferred Compensation Plan (302) (315) (665) (660)
Deferred Compensation Plan Liability 302 315 665 660
Total stockholders' equity 218,650 215,841 214,350 213,769
Total liabilities and stockholders' equity $ 2,308,701 $ 2,329,141 $ 2,249,711 $ 2,286,288
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the Three Months Ended, For the Nine Months Ended,
September 30, June 30, September 30, September 30,
2014 2014 2013 2014 2013
(unaudited) (unaudited)
Interest income:
Loans $ 17,944 $ 17,530 $ 17,403 $ 52,720 $ 52,493
Mortgage-backed securities 1,642 1,731 1,865 5,136 5,540
Investment securities and other 556 637 716 1,929 2,163
Total interest income 20,142 19,898 19,984 59,785 60,196
Interest expense:
Deposits 1,010 986 1,107 3,092 3,607
Borrowed funds 1,032 753 1,333 2,369 4,312
Total interest expense 2,042 1,739 2,440 5,461 7,919
Net interest income 18,100 18,159 17,544 54,324 52,277
Provision for loan losses 1,000 275 700 1,805 2,600
Net interest income after provision for loan losses 17,100 17,884 16,844 52,519 49,677
Other income:
Bankcard services revenue 914 897 943 2,603 2,675
Wealth management revenue 579 608 628 1,727 1,583
Fees and service charges 2,397 2,278 2,117 6,533 5,671
Loan servicing income 239 226 200 693 528
Net gain on sales of loans available for sale 226 219 316 577 877
Net gain on sales of investment securities available for sale 591 348 938 42
Net loss from other real estate operations (24) (107) (188) (164) (112)
Income from Bank Owned Life Insurance 382 377 419 1,097 1,067
Other 1 1 2 20
Total other income 5,304 4,847 4,436 14,006 12,351
Operating expenses:
Compensation and employee benefits 7,746 8,131 7,397 23,562 21,014
Occupancy 1,327 1,364 1,364 4,154 4,104
Equipment 879 768 675 2,403 2,003
Marketing 294 610 444 1,436 1,142
Federal deposit insurance 534 538 538 1,618 1,598
Data processing 1,111 987 1,067 3,168 3,002
Check card processing 518 494 454 1,458 1,288
Professional fees 704 523 358 1,602 1,673
Other operating expense 1,336 1,432 1,357 4,016 3,984
Total operating expenses 14,449 14,847 13,654 43,417 39,808
Income before provision for income taxes 7,955 7,884 7,626 23,108 22,220
Provision for income taxes 2,790 2,767 2,658 8,120 7,828
Net income $ 5,165 $ 5,117 $ 4,968 $ 14,988 $ 14,392
Basic earnings per share $ 0.31 $ 0.31 $ 0.29 $ 0.89 $ 0.84
Diluted earnings per share $ 0.31 $ 0.30 $ 0.29 $ 0.89 $ 0.84
Average basic shares outstanding 16,623 16,740 17,047 16,748 17,145
Average diluted shares outstanding 16,704 16,822 17,210 16,865 17,194
OceanFirst Financial Corp.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
At September 30,
2014
At June 30,
2014
At December 31,
2013
At September 30,
2013
STOCKHOLDERS' EQUITY
Stockholders' equity to total assets 9.47% 9.27% 9.53% 9.35%
Common shares outstanding (in thousands) 17,118 17,145 17,387 17,386
Stockholders' equity per common share $ 12.77 $ 12.59 $ 12.33 $ 12.30
Tangible stockholders' equity per common share 12.77 12.59 12.33 12.30
ASSET QUALITY
Non-performing loans:
Real estate – one-to-four family $ 3,759 $ 25,313 $ 28,213 $ 28,970
Commercial real estate 12,713 12,094 12,304 7,398
Consumer 1,811 3,128 4,328 4,428
Commercial and industrial 109 164 515 769
Total non-performing loans 18,392 40,699 45,360 41,565
Other real estate owned 6,466 4,968 4,345 4,259
Total non-performing assets $ 24,858 $ 45,667 $ 49,705 $ 45,824
Delinquent loans 30 to 89 days $ 10,407 $ 8,923 $ 9,147 $ 18,965
Troubled debt restructurings:
Non-performing (included in total non-performing loans above) $ 2,611 $ 7,047 $ 9,663 $ 11,886
Performing 21,712 23,000 21,456 21,523
Total troubled debt restructurings $ 24,323 $ 30,047 $ 31,119 $ 33,409
Allowance for loan losses $ 16,310 $ 20,936 $ 20,930 $ 20,887
Allowance for loan losses as a percent of total loans receivable 0.98% 1.26% 1.33% 1.35%
Allowance for loan losses as a percent of total non-performing loans 88.68 51.44 46.14 50.25
Non-performing loans as a percent of total loans receivable 1.11 2.44 2.88 2.68
Non-performing assets as a percent of total assets 1.08 1.96 2.21 2.00
WEALTH MANAGEMENT
Assets under administration $ 224,421 $ 229,289 $ 216,144 $ 211,976
For the Three Months Ended, For the Nine Months Ended,
September 30, June 30, September 30, September 30,
2014 2014 2013 2014 2013
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets 0.88% 0.90% 0.86% 0.87% 0.83%
Return on average stockholders' equity 9.50 9.45 9.17 9.23 8.76
Interest rate spread 3.18 3.28 3.11 3.26 3.10
Interest rate margin 3.27 3.35 3.20 3.33 3.19
Operating expenses to average assets 2.48 2.60 2.36 2.52 2.30
Efficiency ratio 61.74 64.54 62.12 63.54 61.60
OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
September 30,
2014
June 30,
2014
December 31,
2013
September 30,
2013
Real estate:
One-to-four family $ 741,671 $ 766,761 $ 751,370 $ 768,665
Commercial real estate, multi-family and land 599,917 577,061 528,945 497,461
Residential construction 41,143 46,092 30,821 17,087
Consumer 199,842 201,839 200,683 199,761
Commercial and industrial 79,608 75,215 60,545 65,584
Total loans 1,662,181 1,666,968 1,572,364 1,548,558
Loans in process (14,180) (16,374) (12,715) (6,530)
Deferred origination costs, net 3,431 3,456 3,526 3,850
Allowance for loan losses (16,310) (20,936) (20,930) (20,887)
Total loans, net 1,635,122 1,633,114 1,542,245 1,524,991
Less: mortgage loans held for sale 3,096 1,295 785 2,566
Loans receivable, net $ 1,632,026 $ 1,631,819 $ 1,541,460 $ 1,522,425
Mortgage loans serviced for others $ 796,771 $ 786,095 $ 806,810 $ 813,481
Loan pipeline: Average Yield
Commercial 4.39% $ 42,403 $ 69,535 $ 58,992 $ 38,361
Construction/permanent 4.36% 15,019 6,369 9,955 14,605
One-to-four family 3.85% 18,364 19,792 18,827 19,897
Consumer 4.26% 10,367 5,045 5,496 4,939
$ 86,153 $ 100,741 $ 93,270 $ 77,802
For the Three Months Ended, For the Nine Months Ended
September 30, June 30, September 30, September 30,
2014 2014 2013 2014 2013
Loan originations:
Commercial $ 66,728 $ 46,909 $ 49,522 $ 166,119 $ 97,216
Construction/permanent 10,622 13,163 9,887 34,201 17,470
One-to-four family 22,855 32,252 45,708 82,845 159,451
Consumer 10,403 15,893 19,720 39,675 46,432
Total $ 110,608 $ 108,217 $ 124,837 $ 322,840 $ 320,569
Loans sold (1) $ 9,803 $ 10,936 $ 19,194 $ 31,009 $ 88,328
Net charge-offs (2) 5,626 273 633 6,425 2,223
(1) Loans sold for the three and nine months ended September 30, 2014 excludes $23.1 million relating to the bulk sale of non-performing loans.
(2) Net charge-offs for the three and nine months ended September 30, 2014 includes a $5.0 million charge-off relating to the bulk sale of non-performing loans.
DEPOSITS
September 30,
2014
June 30,
2014
December 31,
2013
September 30,
2013
Type of Account
Non-interest-bearing $ 277,136 $ 271,208 $ 207,608 $ 217,061
Interest-bearing checking 888,008 817,085 913,753 924,694
Money market deposit 110,721 107,365 116,947 124,350
Savings 294,059 295,133 290,512 291,131
Time deposits 211,303 214,719 217,943 211,678
$ 1,781,227 $ 1,705,510 $ 1,746,763 $ 1,768,914
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE THREE MONTHS ENDED,
September 30, 2014 June 30, 2014 September 30, 2013
AVERAGE AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST BALANCE INTEREST COST
(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments $ 56,523 $ 17 0.12% $ 26,563 $ 4 0.06% $ 46,311 $ 16 0.14%
Securities (1) and FHLB stock 529,116 2,181 1.65 552,851 2,364 1.71 631,016 2,565 1.63
Loans receivable, net (2) 1,631,680 17,944 4.40 1,588,815 17,530 4.41 1,519,002 17,403 4.58
Total interest-earning assets 2,217,319 20,142 3.63 2,168,229 19,898 3.67 2,196,329 19,984 3.64
Non-interest-earning assets 117,509 118,551 115,016
Total assets $ 2,334,828 $ 2,286,780 $ 2,311,345
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 1,279,313 262 0.08 $ 1,257,291 247 0.08 $ 1,317,181 387 0.12
Time deposits 213,627 748 1.40 215,148 739 1.37 211,584 720 1.36
Total 1,492,940 1,010 0.27 1,472,439 986 0.27 1,528,765 1,107 0.29
Borrowed funds 325,897 1,032 1.27 330,933 753 0.91 329,281 1,333 1.62
Total interest-bearing liabilities 1,818,837 2,042 0.45 1,803,372 1,739 0.39 1,858,046 2,440 0.53
Non-interest-bearing deposits 279,144 252,395 219,723
Non-interest-bearing liabilities 19,436 14,530 16,827
Total liabilities 2,117,417 2,070,297 2,094,596
Stockholders' equity 217,411 216,483 216,749
Total liabilities and stockholders' equity $ 2,334,828 $ 2,286,780 $ 2,311,345
Net interest income $ 18,100 $ 18,159 $ 17,544
Net interest rate spread (3) 3.18% 3.28% 3.11%
Net interest margin (4) 3.27% 3.35% 3.20%
FOR THE NINE MONTHS ENDED,
September 30, 2014 September 30, 2013
AVERAGE AVERAGE YIELD/ AVERAGE AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments $ 37,572 $ 27 0.10% $ 56,142 $ 61 0.14%
Securities (1) and FHLB stock 547,983 7,038 1.71 615,211 7,642 1.66
Loans receivable, net (2) 1,592,864 52,720 4.41 1,514,693 52,493 4.62
Total interest-earning assets 2,178,419 59,785 3.66 2,186,046 60,196 3.67
Non-interest-earning assets 117,313 117,516
Total assets $ 2,295,732 $ 2,303,562
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 1,286,412 873 0.09 $ 1,322,095 1,389 0.14
Time deposits 214,821 2,219 1.38 216,198 2,218 1.37
Total 1,501,233 3,092 0.27 1,538,293 3,607 0.31
Borrowed funds 313,519 2,369 1.01 325,251 4,312 1.77
Total interest-bearing liabilities 1,814,752 5,461 0.40 1,863,544 7,919 0.57
Non-interest-bearing deposits 247,469 204,568
Non-interest-bearing liabilities 16,895 16,463
Total liabilities 2,079,116 2,084,575
Stockholders' equity 216,616 218,987
Total liabilities and stockholders' equity $ 2,295,732 $ 2,303,562
Net interest income $ 54,324 $ 52,277
Net interest rate spread (3) 3.26% 3.10%
Net interest margin (4) 3.33% 3.19%
(1) Amounts are recorded at average amortized cost.
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.

CONTACT: Company Contact: Michael J. Fitzpatrick Chief Financial Officer OceanFirst Financial Corp. Tel: (732) 240-4500, ext. 7506 Fax: (732) 349-5070 Email: Mfitzpatrick@oceanfirst.comSource:OceanFirst Financial Corp.