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OceanFirst Financial Corp. Announces Quarterly and Annual Financial Results

TOMS RIVER, N.J., Jan. 22, 2015 (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 $0.30 for the quarter ended December 31, 2014, as compared to $0.11 for the corresponding prior year period. For the year ended December 31, 2014, diluted earnings per share increased to $1.19, as compared to $0.95 for the prior year. Results of the Company's strategic initiatives for the quarter are described below.

  • Commercial loans outstanding increased $54.4 million for the quarter ended December 31, 2014, the sixth consecutive quarter of double digit percentage growth. Growth for the year ended December 31, 2014 was $144.4 million.
  • On October 31, 2014, the Company sold the servicing rights on residential mortgage loans serviced for Federal agencies, recognizing a net gain of $408,000.
  • The Bank added a new commercial lending team, which will be located in Mercer County, to better compete in the broader central New Jersey market area.
  • The Company also announced that the Board of Directors declared its seventy-second consecutive quarterly cash dividend on common stock. The dividend for the quarter ended December 31, 2014 of $0.13 per share will be paid on February 13, 2015 to shareholders of record on February 2, 2015.

Chief Executive Officer and President Christopher D. Maher commented on the results, "We are pleased to report another quarter of strong commercial loan growth. Effective expense discipline in combination with continued loan growth will provide an opportunity for additional operating leverage. The expansion of commercial lending relationships remains a key focus. To further penetrate the broader central New Jersey market, we will be opening a new commercial loan production office in Mercer County."

Results of Operations

Net income for the quarter ended December 31, 2014 was $4.9 million, or $0.30 per diluted share as compared to net income of $1.9 million, or $0.11 per diluted share, for the corresponding prior year period. For the year ended December 31, 2014, net income totaled $19.9 million, or $1.19 per diluted share, as compared to net income of $16.3 million or $0.95 per diluted share for the prior year. Net income for the quarter and year ended December 31, 2013 was adversely impacted by non-recurring expenses related to the prepayment of Federal Home Loan Bank ("FHLB") advances and the consolidation of two branches. The net, after tax amount of these items reduced net income and diluted earnings per share for the quarter and year ended December 2013 by $3.1 million and $0.19, respectively.

Net interest income for the quarter ended December 31, 2014 decreased to $18.0 million as compared to $18.3 million for the same prior year period, reflecting a decrease in the net interest margin, partly offset by an increase in average interest-earning assets. The net interest margin decreased to 3.27%, for the quarter ended December 31, 2014, from 3.38% for the same prior year period. The yield on average interest-earning assets decreased to 3.64% for the quarter ended December 31, 2014, as compared to 3.70% in the same prior year period, while the cost of average interest-bearing liabilities increased to 0.45%, as compared to 0.37%. Net interest income for the year ended December 31, 2014 increased to $72.3 million, as compared to $70.5 million in the same prior year period, reflecting an increase in the net interest margin and an increase in average interest-earning assets. The net interest margin increased to 3.31% for the year ended December 31, 2014, from 3.24% for the same prior year period. The yield on average interest-earning assets decreased to 3.65% for the year ended December 31, 2014, as compared to 3.68% in the same prior year period, while the cost of average interest-bearing liabilities decreased to 0.42%, as compared to 0.52%. Despite the slight decline in the yield on interest earning assets, the asset yield for both the quarter and year ended December 31, 2014 benefited from a shift in the mix of interest-earning assets as average loans receivable, net increased $105.8 million and $85.1 million, respectively, for the quarter and year ended December 31, 2014, while average interest-earning securities decreased $69.2 million and $67.8 million, respectively, as compared to the same prior year periods. The increase in the cost of average interest-bearing liabilities for the quarter ended December 31, 2014 was partly due to the prepayment, early in the fourth quarter of 2013, of $159.0 million of FHLB advances with a weighted average cost of 2.31% and a weighted term to maturity of 16 months. The prepayment was initially funded by low cost short-term advances which immediately benefited net interest income and margin in the fourth quarter of 2013. During 2014, these short-term borrowings were gradually extended causing an increase in the cost of interest-bearing liabilities. Finally, average interest-earning assets increased $47.5 million and $6.2 million, respectively, for the quarter and year ended December 31, 2014, as compared to the same prior year periods.

For the quarter ended December 31, 2014, net interest income decreased by $76,000, as compared to the prior linked quarter. The net interest margin was unchanged at 3.27% and average interest-earning assets decreased by $10.4 million. The Company's commercial loan growth during the quarter was concentrated at the end of the period providing only a limited benefit to fourth quarter net interest income. Loans receivable, net (including mortgage loans held for sale), was $1,693.0 million at December 31, 2014, $58.2 million more than the fourth quarter average of $1,634.8 million.

For the quarter and year ended December 31, 2014, the provision for loan losses was $825,000 and $2.6 million, respectively, as compared to $200,000 and $2.8 million, respectively, for the corresponding prior year periods and $1.0 million for the prior linked quarter. The provision for loan losses for the prior linked quarter and year ended December 31, 2014, was elevated due to the bulk sale of non-performing loans which resulted in a charge-off of $5.0 million on these loans. Net charge-offs were $818,000 for the quarter ended December 31, 2014, as compared to net charge-offs of $654,000 in the prior linked quarter (excluding net charge-offs relating to the bulk sale of non-performing loans) and $157,000 in the prior year quarter. The net charge-offs for the quarter ended December 31, 2014 included $532,000 relating to loans that were restructured in previous years that were no longer considered collectable. For the year ended December 31, 2014, net charges-offs, excluding net charge-offs relating to the bulk sale of non-performing loans, were $2.3 million, as compared to $2.4 million in the same prior year period. In evaluating the level of the allowance for loan losses at December 31, 2014 and related provision for loan losses for the quarter and year ended December 31, 2014, 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 during the third quarter of 2014. Non-performing loans amounted to $18.3 million at December 31, 2014, a decrease of $85,000 as compared to September 30, 2014 and a decrease of $27.1 million, or 59.6%, as compared to December 31, 2013. Non-performing loans as a percent of total loans receivable decreased to 1.06% at December 31, 2014, as compared to 1.11% at September 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 89.1% at December 31, 2014, from 88.7% at September 30, 2014 and 46.1% at December 31, 2013.

For the quarter and year ended December 31, 2014, other income increased to $4.6 million and $18.6 million, respectively, as compared to $4.1 million and $16.5 million, respectively, in the same prior year periods. For the quarter and year ended December 31, 2014, fees and service charges increased $297,000 and $1.1 million, respectively, as compared to the same prior year periods primarily due to a revised deposit fee and product structure. For the quarter and year ended December 31, 2014, the net gain on the sale of loans decreased to $194,000 and $772,000, respectively, as compared to $287,000 and $1.2 million, respectively, in the same prior year periods. The gain on the sale of loans for the year ended December 31, 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 year. The prior year provision was related to loans sold to the FHLB as part of its Mortgage Partnership Finance program. Compared to prior years, the gain on sale of loans in the 2014 periods was adversely impacted by reductions in loans sold, as increasing longer-term interest rates reduced one-to-four family loan refinance activity. For the quarter and year ended December 31, 2014, the Company recognized gains of $93,000 and $1.0 million, respectively, on the sale of equity securities, as compared to gains of $4,000 and $46,000, respectively, in the corresponding prior year periods.

For the quarter ended December 31, 2014, other income decreased $666,000, as compared to the prior linked quarter due to decreases of $498,000 in the gain on sale of equity securities, $272,000 in fees and service charges, $116,000 in loan servicing income, and a higher net loss from other real estate operations of $202,000. These decreases were partly offset by the net gain on the sale of loan servicing of $408,000.

Operating expenses decreased to $14.4 million and $57.8 million, respectively, for the quarter and the year ended December 31, 2014, as compared to $19.5 million and $59.2 million in the same prior year periods. The decreases were primarily due to the expenses incurred in the fourth quarter of 2013 associated with the FHLB advance prepayment fee and the branch consolidations totaling $4.8 million. Compensation and employee benefits expense increased $118,000 and $2.7 million, respectively, for the quarter and the year ended December 31, 2014, as compared to the same prior year periods. The increase for the year ended December 31, 2014 was primarily due to personnel additions in revenue producing areas in mid-2013 through early 2014. Additionally, compensation and employee benefits expense for the year ended December 31, 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 quarter ended December 31, 2014, operating expenses decreased $35,000 as compared to the prior linked quarter.

The provision for income taxes was $2.5 million and $10.6 million, respectively, for the quarter and the year ended December 31, 2014, as compared to $784,000 and $8.6 million, respectively, for the same prior year periods. The effective tax rate was 33.6% and 34.8%, respectively, for the quarter and year ended December 31, 2014, as compared to 28.8% and 34.5%, respectively, in the same prior year periods and 35.1% for the prior linked quarter.

Financial Condition

Total assets increased by $107.0 million to $2,356.7 million at December 31, 2014, from $2,249.7 million at December 31, 2013. Loans receivable, net, increased by $147.4 million, to $1,688.8 million at December 31, 2014 from $1,541.5 million at December 31, 2013, primarily due to growth in commercial loans of $144.4 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. Separately, 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 $50.2 million.

Deposits decreased by $26.6 million, to $1,720.1 million at December 31, 2014, from $1,746.8 million at December 31, 2013, due to a reduction in government deposits of $50.4 million partly offset by growth in business checking accounts. Deposits added in 2014 from commercial loan clients totaled $35.7 million, demonstrating the focus on relationship based lending. Non-interest-bearing deposit accounts grew $72.3 million for the year relating to a revised fee and product structure adopted in the second quarter. To fund loan growth, FHLB advances increased $130.2 million, to $305.2 million at December 31, 2014, from $175.0 million at December 31, 2013. Stockholders' equity increased to $218.3 million at December 31, 2014, as compared to $214.4 million at December 31, 2013, as net income for the period was partly offset by the repurchase of 551,291 shares of common stock for $9.2 million (average cost per share of $16.65) and the cash dividend on common stock. At December 31, 2014, there were 618,398 shares available for repurchase under the stock repurchase program adopted in July of 2014. Tangible stockholders' equity per common share was $12.91 at December 31, 2014, as compared to $12.33 at December 31, 2013.

Compared to the prior linked quarter, total assets increased $48.0 million primarily due to an increase in loans receivable, net of $56.8 million, almost all of which was related to commercial loan growth. Deposits decreased by $61.1 million primarily due to a seasonal outflow in government deposits. The decrease in deposits and the increase in commercial loans were funded with FHLB advances which increased $100.0 million during the quarter. The Company repurchased 216,661 shares of common stock during the quarter for $3.6 million (average cost per share of $16.69).

Asset Quality

The Company's non-performing loans totaled $18.3 million at December 31, 2014, a $85,000 decrease from September 30, 2014 and a $27.1 million decrease from December 31, 2013. The decrease from December 31, 2013 was primarily due to the third quarter 2014 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 1.06% at December 31, 2014, as compared to 1.11% at September 30, 2014 and 2.88% at December 31, 2013.

Annual Meeting

The Company also announced today that its Annual Meeting of Stockholders will be held on Wednesday, May 6, 2015 at 10:00 a.m. Eastern time, at the Crystal Point Yacht Club located at 3900 River Road at the intersection of State Highway 70, Point Pleasant, New Jersey. The record date for shareholders entitled to vote at the Annual Meeting is March 10, 2015.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, January 23, 2015 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 10058035 from one hour after the end of the call until April 23, 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 community bank with $2.4 billion in assets and twenty-three branches located in Ocean, Monmouth and Middlesex Counties, New Jersey. The Bank delivers commercial and residential financing solutions, wealth management, and deposit services throughout the central New Jersey region and is the largest and oldest 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)
December 31, September 30, December 31,
2014 2014 2013
ASSETS (unaudited)
Cash and due from banks $36,117 $27,657 $33,958
Securities available-for-sale, at estimated fair value 19,804 20,683 43,836
Securities held-to-maturity, net (estimated fair value of $474,216 at December 31, 2014, $493,059 at September 30, 2014 and $495,082 at December 31, 2013, respectively) 469,417 486,819 495,599
Federal Home Loan Bank of New York stock, at cost 19,170 14,785 14,518
Loans receivable, net 1,688,846 1,632,026 1,541,460
Mortgage loans held for sale 4,201 3,096 785
Interest and dividends receivable 5,506 5,579 5,380
Other real estate owned 4,664 6,466 4,345
Premises and equipment, net 24,738 24,690 23,684
Servicing asset 701 3,577 4,178
Bank Owned Life Insurance 56,048 55,668 54,571
Deferred tax asset 15,594 15,612 15,239
Other assets 11,908 12,043 12,158
Total assets $2,356,714 $2,308,701 $2,249,711
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $1,720,135 $1,781,227 $1,746,763
Securities sold under agreements to repurchase with retail customers 67,812 61,457 68,304
Federal Home Loan Bank advances 305,238 205,196 175,000
Other borrowings 27,500 27,500 27,500
Advances by borrowers for taxes and insurance 6,323 6,716 6,471
Other liabilities 11,447 7,955 11,323
Total liabilities 2,138,455 2,090,051 2,035,361
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 16,901,653, 17,118,314 and 17,387,049 shares outstanding at December 31 2014, September 30, 2014 and December 31, 2013, respectively 336 336 336
Additional paid-in capital 265,260 264,948 263,319
Retained earnings 217,714 214,952 206,201
Accumulated other comprehensive loss (7,109) (7,189) (6,619)
Less: Unallocated common stock held by Employee Stock Ownership Plan (3,330) (3,401) (3,616)
Treasury stock, 16,665,119, 16,448,458 and 16,179,723 shares at December 31, 2014, September 30, 2014 and December 31, 2013, respectively (254,612) (250,996) (245,271)
Common stock acquired by Deferred Compensation Plan (304) (302) (665)
Deferred Compensation Plan Liability 304 302 665
Total stockholders' equity 218,259 218,650 214,350
Total liabilities and stockholders' equity $2,356,714 $2,308,701 $2,249,711
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the Three Months Ended, For the Years Ended,
December 31, September 30, December 31, December 31,
2014 2014 2013 2014 2013
------------------- (unaudited) -------------------
Interest income:
Loans $17,843 $17,944 $17,368 $70,564 $69,863
Mortgage-backed securities 1,709 1,642 1,863 6,845 7,403
Investment securities and other 515 556 729 2,444 2,891
Total interest income 20,067 20,142 19,960 79,853 80,157
Interest expense:
Deposits 1,010 1,010 1,102 4,103 4,709
Borrowed funds 1,033 1,032 607 3,402 4,919
Total interest expense 2,043 2,042 1,709 7,505 9,628
Net interest income 18,024 18,100 18,251 72,348 70,529
Provision for loan losses 825 1,000 200 2,630 2,800
Net interest income after provision for loan losses 17,199 17,100 18,051 69,718 67,729
Other income:
Bankcard services revenue 875 914 909 3,478 3,584
Wealth management revenue 553 579 591 2,280 2,174
Fees and service charges 2,107 2,379 1,810 8,589 7,451
Loan servicing income 123 239 220 816 748
Net gain on sale of loan servicing 408 408
Net gain on sales of loans available for sale 194 226 287 772 1,163
Net gain on sales of investment securities available for sale 93 591 4 1,031 46
Net loss from other real estate operations (226) (24) (49) (390) (161)
Income from Bank Owned Life Insurance 380 382 338 1,477 1,404
Other 113 29 116 49
Total other income 4,620 5,286 4,139 18,577 16,458
Operating expenses:
Compensation and employee benefits 7,865 7,746 7,747 31,427 28,762
Occupancy 1,356 1,327 1,458 5,510 5,562
Equipment 875 879 721 3,278 2,724
Marketing 359 294 490 1,795 1,632
Federal deposit insurance 510 534 543 2,128 2,141
Data processing 1,071 1,111 994 4,239 3,996
Check card processing 476 518 480 1,934 1,768
Professional fees 665 704 776 2,267 2,449
Other operating expense 1,219 1,318 1,414 5,186 5,366
Federal Home Loan Bank advance prepayment fee 4,265 4,265
Branch consolidation expense 579 579
Total operating expenses 14,396 14,431 19,467 57,764 59,244
Income before provision for income taxes 7,423 7,955 2,723 30,531 24,943
Provision for income taxes 2,491 2,790 784 10,611 8,613
Net income $4,932 $5,165 $1,939 $19,920 $16,330
Basic earnings per share $0.30 $0.31 $0.12 $1.19 $0.96
Diluted earnings per share $0.30 $0.31 $0.11 $1.19 $0.95
Average basic shares outstanding 16,504 16,623 16,855 16,687 17,071
Average diluted shares outstanding 16,597 16,704 17,056 16,797 17,157
OceanFirst Financial Corp.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
At December 31, At September 30, At December 31,
2014 2014 2013
STOCKHOLDERS' EQUITY
Stockholders' equity to total assets 9.26% 9.47% 9.53%
Common shares outstanding (in thousands) 16,902 17,118 17,387
Stockholders' equity per common share $12.91 $12.77 $12.33
Tangible stockholders' equity per common share 12.91 12.77 12.33
ASSET QUALITY
Non-performing loans:
Real estate – one-to-four family $3,115 $3,759 $28,213
Commercial real estate 12,758 12,713 12,304
Consumer 1,877 1,811 4,328
Commercial and industrial 557 109 515
Total non-performing loans 18,307 18,392 45,360
Other real estate owned 4,664 6,466 4,345
Total non-performing assets $22,971 $24,858 $49,705
Delinquent loans 30 to 89 days $8,960 $10,407 $9,147
Troubled debt restructurings:
Non-performing (included in total non-performing loans above) $2,031 $2,611 $9,663
Performing 21,462 21,712 21,456
Total troubled debt restructurings $23,493 $24,323 $31,119
Allowance for loan losses $16,317 $16,310 $20,930
Allowance for loan losses as a percent of total loans receivable 0.95% 0.98% 1.33%
Allowance for loan losses as a percent of total non-performing loans 89.13 88.68 46.14
Non-performing loans as a percent of total loans receivable 1.06 1.11 2.88
Non-performing assets as a percent of total assets 0.97 1.08 2.21
WEALTH MANAGEMENT
Assets under administration $225,234 $224,421 $216,144
For the Three Months Ended, For the Years Ended,
December 31, September 30, December 31, December 31,
2014 2014 2013 2014 2013
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets 0.84% 0.88% 0.34% 0.86% 0.71%
Return on average stockholders' equity 9.06 9.50 3.64 9.18 7.51
Interest rate spread 3.19 3.18 3.33 3.23 3.16
Interest rate margin 3.27 3.27 3.38 3.31 3.24
Operating expenses to average assets 2.46 2.47 3.40 2.50 2.58
Efficiency ratio 63.58 61.71 86.95 (1) 63.53 68.11 (1)
(1) Excluding non-recurring expenses for the FHLB advance prepayment fee and the branch consolidation expense, the efficiency ratio for the quarter and year ended December 31, 2013 would be 65.31% and 62.54%, respectively.
OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
December 31, September 30, December 31,
2014 2014 2013
Real estate:
One-to-four family $742,090 $741,671 $751,370
Commercial real estate, multi-family and land 649,951 599,917 528,945
Residential construction 47,552 41,143 30,821
Consumer 199,349 199,842 200,683
Commercial and industrial 83,946 79,608 60,545
Total loans 1,722,888 1,662,181 1,572,364
Loans in process (16,731) (14,180) (12,715)
Deferred origination costs, net 3,207 3,431 3,526
Allowance for loan losses (16,317) (16,310) (20,930)
Total loans, net 1,693,047 1,635,122 1,542,245
Less: mortgage loans held for sale 4,201 3,096 785
Loans receivable, net $1,688,846 $1,632,026 $1,541,460
Mortgage loans serviced for others $197,791 $796,771 $806,810
Loan pipeline: Average Yield
Commercial 4.43% $46,864 $42,403 $58,992
Construction/permanent 4.22% 12,674 15,019 9,955
One-to-four family 3.83% 20,072 18,364 18,827
Consumer 4.46% 4,585 10,367 5,496
$84,195 $86,153 $93,270
For the Three Months Ended, For the Years Ended
December 31, September 30, December 31, December 31,
2014 2014 2013 2014 2013
Loan originations:
Commercial $77,739 $66,728 $53,700 $243,858 $150,916
Construction/permanent 16,355 10,622 16,209 50,556 33,679
One-to-four family 24,971 22,855 31,706 107,816 191,157
Consumer 12,395 10,403 12,059 52,070 58,491
Total $131,460 $110,608 $113,674 $454,300 $434,243
Loans sold $8,147 $ 9,803(1) $18,222 $ 39,156(1) $106,550
Net charge-offs 818 5,626(2) 157 7,243(2) 2,380
(1) Loans sold for the quarter ended September 30, 2014 and the year ended December 31, 2014. excludes $23.1 million relating to the bulk sale of non-performing loans.
(2) Net charge-offs for the quarter ended September 30, 2014 and year ended December 31, 2014 includes a $5.0 million charge-off relating to the bulk sale of non-performing loans.
DEPOSITS
December 31, September 30, December 31,
2014 2014 2013
Type of Account
Non-interest-bearing $279,944 $277,136 $207,608
Interest-bearing checking 836,120 888,008 913,753
Money market deposit 95,663 110,721 116,947
Savings 301,190 294,059 290,512
Time deposits 207,218 211,303 217,943
$1,720,135 $1,781,227 $1,746,763
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE THREE MONTHS ENDED,
December 31, 2014 September 30, 2014 December 31, 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 $45,414 $17 0.15% $56,523 $16 0.11% $34,566 $8 0.09%
Securities (1) and FHLB stock 526,661 2,207 1.68 529,116 2,182 1.65 595,859 2,584 1.73
Loans receivable, net (2) 1,634,799 17,843 4.37 1,631,680 17,944 4.40 1,528,956 17,368 4.54
Total interest-earning assets 2,206,874 20,067 3.64 2,217,319 20,142 3.63 2,159,381 19,960 3.70
Non-interest-earning assets 130,663 117,509 127,852
Total assets $2,337,537 $2,334,828 $2,287,233
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $1,304,075 255 0.08 $1,279,313 262 0.08 $1,345,106 371 0.11
Time deposits 209,844 755 1.44 213,627 748 1.40 213,337 731 1.37
Total 1,513,919 1,010 0.27 1,492,940 1,010 0.27 1,558,443 1,102 0.28
Borrowed funds 305,787 1,033 1.35 325,897 1,032 1.27 289,434 607 0.84
Total interest-bearing liabilities 1,819,706 2,043 0.45 1,818,837 2,042 0.45 1,847,877 1,709 0.37
Non-interest-bearing deposits 285,825 279,144 209,715
Non-interest-bearing liabilities 14,204 19,436 16,489
Total liabilities 2,119,735 2,117,417 2,074,081
Stockholders' equity 217,802 217,411 213,152
Total liabilities and stockholders' equity $2,337,537 $2,334,828 $2,287,233
Net interest income $18,024 $18,100 $18,251
Net interest rate spread (3) 3.19% 3.18% 3.33%
Net interest margin (4) 3.27% 3.27% 3.38%
FOR THE YEARS ENDED,
December 31, 2014 December 31, 2013
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and short-term investments $39,549 $41 0.10% $50,704 $77 0.15%
Securities (1) and FHLB stock 542,609 9,248 1.70 610,369 10,217 1.67
Loans receivable, net (2) 1,603,434 70,564 4.40 1,518,288 69,863 4.60
Total interest-earning assets 2,185,592 79,853 3.65 2,179,361 80,157 3.68
Non-interest-earning assets 120,677 120,074
Total assets $2,306,269 $2,299,435
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $1,278,078 1,129 0.09 $1,327,905 1,760 0.13
Time deposits 213,566 2,974 1.39 215,477 2,949 1.37
Total 1,491,644 4,103 0.28 1,543,382 4,709 0.31
Borrowed funds 311,570 3,402 1.09 316,223 4,919 1.56
Total interest-bearing liabilities 1,803,214 7,505 0.42 1,859,605 9,628 0.52
Non-interest-bearing deposits 257,058 205,855
Non-interest-bearing liabilities 29,082 16,470
Total liabilities 2,089,354 2,081,930
Stockholders' equity 216,915 217,505
Total liabilities and stockholders' equity $2,306,269 $2,299,435
Net interest income $72,348 $70,529
Net interest rate spread (3) 3.23% 3.16%
Net interest margin (4) 3.31% 3.24%
(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: 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.