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OceanFirst Financial Corp. Announces Quarterly Financial Results

TOMS RIVER, N.J., July 23, 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 $0.31 for the quarter ended June 30, 2015, as compared to $0.30 for the corresponding prior year quarter. For the six months ended June 30, 2015, diluted earnings per share increased to $0.63, as compared to $0.58 for the corresponding prior year period. Diluted earnings per share for the quarter and six months ended June 30, 2015 were impacted by $0.01 due to non-recurring merger related costs relating to the acquisition of Colonial American Bank ("Colonial") which is expected to close on July 31, 2015. Excluding these merger costs, diluted earnings per share for the six months ended June 30, 2015 increased 10.3%, as compared to the same prior year period.

Highlights for the quarter are described below.

  • Commercial loans outstanding increased $34.3 million, an annualized growth rate of 17.7%, the eighth consecutive quarter of double digit percentage growth. Over the last year, commercial loans outstanding increased $157.2 million, or 24.1%.
  • Loan growth was partly funded by a $56.2 million increase in deposits over the prior year. The deposit growth was entirely in non-interest bearing deposits which increased $57.0 million.
  • The Company received the required regulatory and stockholder approvals relating to the pending acquisition of Colonial, which operates two full service banking centers in Middletown and Shrewsbury, New Jersey with total assets of $143.2 million.

Chief Executive Officer and President Christopher D. Maher commented on the results, "We are pleased to deliver another strong quarter of commercial loan growth while maintaining our focus on underwriting standards and credit quality." Mr. Maher added, "We have received all regulatory and shareholder approvals required for the Colonial acquisition, allowing for an expedited closing on July 31, 2015 with the systems integration before the end of the year. We look forward to welcoming the Colonial customers and enhancing our presence in the attractive Monmouth County market."

The Company also announced that the Board of Directors declared its seventy-fourth consecutive quarterly cash dividend on common stock. The dividend for the quarter ended June 30, 2015 of $0.13 per share, representing a 42% payout ratio, will be paid on August 14, 2015 to shareholders of record on August 3, 2015.

With strong loan portfolio growth, the Bank has recently focused on expanding its funding sources. At the end of the quarter, the Bank took advantage of an opportunity to expand its Monmouth County branch presence by opening a new branch in Long Branch, New Jersey at Pier Village. The Bank expects to open an additional branch in Jackson Township, Ocean County, in the third quarter. Both branches will be operated by universal bankers and the Jackson branch will employ advanced technology in the form of interactive teller machines, resulting in modest staffing complements.

Results of Operations
Net income for the three months ended June 30, 2015 was $5.1 million, or $0.31 per diluted share, as compared to net income of $5.1 million, or $0.30 per diluted share, for the corresponding prior year period. Net income for the six months ended June 30, 2015 increased to $10.4 million, or $0.63 per diluted share, as compared to net income of $9.8 million, or $0.58 per diluted share, for the corresponding prior year period. Net income for the three and six months ended June 30, 2015 includes non-recurring merger related costs, net of tax benefit, of $153,000 and $190,000, respectively. The increases in diluted earnings per share over the previous year periods were primarily due to lower operating expenses, higher net interest income and a reduction in average shares outstanding, partly offset by a reduction in other income. As compared to the prior linked quarter, higher net interest income and other income were offset by an increase in operating expenses.

Net interest income for the three and six months ended June 30, 2015 increased to $18.4 million and $36.6 million, respectively, as compared to $18.2 million and $36.2 million, respectively, for the same prior year periods, reflecting an increase in interest-earning assets, partly offset by a lower net interest margin. Average interest-earning assets increased $114.2 million and $103.1 million, respectively, for the three and six months ended June 30, 2015, as compared to the same prior year periods. Average loans receivable, net increased $174.2 million and $159.9 million, respectively, for the three and six months ended June 30, 2015, as compared to the same prior year periods, although this growth was partly offset by decreases in average securities of $62.1 million and $57.2 million, respectively. The net interest margin decreased to 3.23% for both the three and six months ended June 30, 2015, from 3.35% and 3.36%, respectively, for the same prior year periods. The yield on average interest-earning assets decreased to 3.61% and 3.60%, respectively, for the three and six months ended June 30, 2015, as compared to 3.67% for both prior year periods, while the cost of average interest-bearing liabilities increased to 0.46% for both the three and six months ended June 30, 2015, as compared to 0.39% and 0.38%, respectively, in the prior year periods. In anticipation of a rising interest rate environment, the Company extended its borrowed funds into higher-costing longer-term maturities. Since December 31, 2013, the Bank extended $178.3 million of short-term funding into 3-5 year maturities, extending the weighted average maturity of term borrowings from 1.3 years to 3.3 years at June 30, 2015. Despite the increase in the cost of borrowed funds, the total cost of deposits (including non-interest bearing deposits) decreased to 0.22% for the six months ended June 30, 2015, as compared to 0.24% for the corresponding prior year period.

Net interest income for the quarter ended June 30, 2015 increased $300,000 as compared to the prior linked quarter. A slight decrease in the net interest margin to 3.23%, from 3.24%, was offset by an increase in average interest-earning assets of $41.4 million. The yield on average interest-earning assets increased to 3.61% for the quarter ended June 30, 2015, from 3.60% for the prior linked quarter, while the cost of average interest-bearing liabilities increased to 0.46% from 0.45%. The asset yield benefited from the growth in higher-yielding average loans receivable of $60.3 million, as compared to the prior linked quarter, while lower-yielding average securities decreased $19.2 million.

For the three and six months ended June 30, 2015, the provision for loan losses was $300,000 and $675,000, respectively, as compared to $275,000 and $805,000, for the corresponding prior year periods. Net charge-offs decreased to $185,000 and $458,000, respectively, for the three and six months ended June 30, 2015, as compared to net charge-offs of $273,000 and $799,000, respectively, in the corresponding prior year periods. The provision exceeded net charge-offs for both the three and six months ended June 30, 2015 to account for loan growth. The provision for loan losses also decreased as compared to $375,000 in the prior linked quarter, consistent with the decline in net charge-offs to $185,000 from $273,000.

For the three and six months ended June 30, 2015, other income decreased to $4.2 million and $8.2 million, respectively, as compared to $4.8 million and $8.7 million, in the same prior year periods. In the fourth quarter of 2014, the Company sold the servicing rights on a majority of residential mortgage loans serviced for the Federal agencies, recognizing a gain of $408,000. Smaller, supplemental sales occurred in 2015 resulting in gains of $30,000 in the second quarter and $111,000 for the six months ended June 30, 2015. The sale of loan servicing caused a decrease of $167,000 and $343,000 in loan servicing income for the three and six months ended June 30, 2015, respectively, as compared to the same prior year periods but also reduced operating expenses by a similar amount. For both the three and six months ended June 30, 2014 the Company recognized a gain of $348,000 on the sale of equity securities, as compared to no gains in the current year periods.

For the three months ended June 30, 2015, other income increased $185,000, as compared to the prior linked quarter, due to increases of $170,000 in fees and service charges, $116,000 in Bankcard services revenue and $101,000 in wealth management revenue. The increases were partly offset by a lower net (loss) gain from other real estate operations of $93,000.

Operating expenses decreased to $14.4 million and $28.1 million, respectively, for the three and six months ended June 30, 2015, as compared to $14.8 million and $28.9 million, respectively, in the same prior year periods. Operating expenses for the three and six months ended June 30, 2015 include $184,000 and $234,000, respectively, in non-recurring merger related expenses relating to the pending acquisition of Colonial. Compensation and employee benefits expense decreased $431,000 and $577,000, respectively, as compared to the same prior year periods. The prior year periods included $196,000 in severance related expenses due to the Company’s strategic decision to improve efficiency in the residential mortgage loan area. Marketing expense decreased $195,000 and $453,000, respectively, for the three and six months ended June 30, 2015, as compared to the same prior year periods, due to the timing of promotions and a significant campaign in the prior year period. For the three months ended June 30, 2015, operating expenses increased $654,000, as compared to the prior linked quarter, primarily due to a $134,000 increase in non-recurring merger related expenses, an increase of $161,000 in compensation and employee benefits, a $144,000 increase in professional fees and a $141,000 increase in marketing.

The provision for income taxes was $2.8 million and $5.5 million, respectively, for the three and six months ended June 30, 2015, as compared to $2.8 million and $5.3 million, respectively, for the same prior year periods. The effective tax rate was 35.1% and 34.7%, respectively, for the three and six months ended June 30, 2015, as compared to 35.1% and 35.2%, respectively, in the same prior year periods and 34.3% in the prior linked quarter.

Financial Condition
Total assets increased by $38.4 million to $2,395.1 million at June 30, 2015, from $2,356.7 million at December 31, 2014. Loans receivable, net, increased by $84.0 million, to $1,772.9 million at June 30, 2015, from $1,688.8 million at December 31, 2014, primarily due to growth in commercial loans of $75.6 million and the purchase of a pool of performing, locally-originated, one-to-four family, non-conforming mortgage loans for $7.2 million. The increase in loans receivable, net was partly offset by a decrease in total securities of $44.6 million.

Deposits increased by $41.5 million, to $1,761.7 million at June 30, 2015, from $1,720.1 million at December 31, 2014, partly due to an increase in business deposits of $53.5 million demonstrating the value of relationship based lending. The deposit growth funded a decrease in FHLB advances of $9.6 million, to $295.6 million at June 30, 2015, from $305.2 million at December 31, 2014. Stockholders' equity increased to $221.5 million at June 30, 2015, as compared to $218.3 million at December 31, 2014, as net income for the period was partly offset by the repurchase of 259,940 shares of common stock for $4.5 million (average cost per share of $17.13) and the cash dividend on common stock. At June 30, 2015, there were 358,458 shares available for repurchase under the stock repurchase program adopted in July of 2014. Tangible stockholders’ equity per common share was $13.25 at June 30, 2015, as compared to $12.91 at December 31, 2014.

Asset Quality
The Company's non-performing loans totaled $20.9 million at June 30, 2015, a $2.6 million increase from December 31, 2014 but a $19.8 million decrease from June 30, 2014. The reduction from June 30, 2014 was due to the bulk sale of $23.1 million in non-performing loans in the third quarter of 2014.

Conference Call
As previously announced, the Company will host an earnings conference call on Friday, July 24, 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 10068755 from one hour after the end of the call until October 24, 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-four 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, 2014 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)
June 30, 2015 March 31, 2015 December 31, 2014 June 30, 2014
ASSETS(unaudited)(unaudited) (unaudited)
Cash and due from banks$ 40,359 $ 34,792 $36,117 $ 43,817
Securities available-for-sale, at estimated fair value 30,030 30,019 19,804 32,303
Securities held-to-maturity, net (estimated fair value of
$420,409 at June 30, 2015, $449,955 at March 31, 2015,
$474,215 at December 31, 2014 and $485,124 at
June 30, 2014, respectively) 414,625 442,829 469,417 478,389
Federal Home Loan Bank of New York stock, at cost 18,740 16,728 19,170 20,246
Loans receivable, net 1,772,879 1,736,825 1,688,846 1,631,819
Mortgage loans held for sale 1,454 6,020 4,201 1,295
Interest and dividends receivable 5,550 5,474 5,506 5,317
Other real estate owned 3,357 3,835 4,664 4,968
Premises and equipment, net 24,931 24,868 24,738 24,430
Servicing asset 487 548 701 3,772
Bank Owned Life Insurance 56,858 56,494 56,048 55,286
Deferred tax asset 15,234 15,372 15,594 15,417
Other assets 10,596 10,337 11,908 12,082
Total assets$2,395,100 $2,384,141 $2,356,714 $2,329,141
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits$1,761,675 $1,800,926 $1,720,135 $1,705,510
Securities sold under agreements to repurchase
with retail customers 71,687 65,879 67,812 62,341
Federal Home Loan Bank advances 295,616 251,778 305,238 305,000
Other borrowings 27,500 27,500 27,500 27,500
Due to brokers 1,124
Advances by borrowers for taxes and insurance 7,845 7,485 6,323 6,896
Other liabilities 9,242 9,147 11,447 6,053
Total liabilities 2,173,565 2,163,839 2,138,455 2,113,300
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 16,722,632,
16,863,429, 16,901,653 and 17,144,693
shares outstanding at June 30, 2015, March 31, 2015,
December 31, 2014 and June 30, 2014, respectively 336 336 336 336
Additional paid-in capital 267,248 266,824 265,260 264,592
Retained earnings 223,644 220,677 217,714 211,819
Accumulated other comprehensive loss (6,587) (6,788) (7,109) (6,902)
Less: Unallocated common stock held by
Employee Stock Ownership Plan (3,187) (3,259) (3,330) (3,458)
Treasury stock, 16,844,140, 16,703,343, 16,665,119
and 16,422,079 shares at June 30, 2015,
March 31, 2015, December 31, 2014 and
June 30, 2014, respectively (259,919) (257,488) (254,612) (250,546)
Common stock acquired by Deferred Compensation Plan (309) (307) (304) (315)
Deferred Compensation Plan Liability 309 307 304 315
Total stockholders' equity 221,535 220,302 218,259 215,841
Total liabilities and stockholders' equity$2,395,100 $2,384,141 $2,356,714 $2,329,141

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the Three Months Ended,For the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
2015 20152014 2015 2014
-----------------------------------(unaudited)----------------------------------
Interest income:
Loans$18,548 $ 18,029 $ 17,530 $ 36,577 $ 34,776
Mortgage-backed securities 1,519 1,623 1,731 3,142 3,494
Investment securities and other 509 517 637 1,026 1,373
Total interest income 20,576 20,169 19,898 40,745 39,643
Interest expense:
Deposits 967 955 986 1,922 2,082
Borrowed funds 1,176 1,081 753 2,257 1,337
Total interest expense 2,143 2,036 1,739 4,179 3,419
Net interest income 18,433 18,133 18,159 36,566 36,224
Provision for loan losses 300 375 275 675 805
Net interest income after provision
for loan losses 18,133 17,758 17,884 35,891 35,419
Other income:
Bankcard services revenue 899 783 897 1,682 1,689
Wealth management revenue 629 528 608 1,157 1,148
Fees and service charges 2,059 1,889 2,261 3,949 4,104
Loan servicing income 59 52 226 111 454
Net gain on sale of loan servicing 30 81 111
Net gain on sales of loans available for sale 185 193 219 377 351
Net gain on sales of investment securities available for sale 348 348
Net (loss) gain from other real estate operations (72) 21 (107) (51) (139)
Income from Bank Owned Life Insurance 364 446 377 810 715
Other 18 (7) 1 11 2
Total other income 4,171 3,986 4,830 8,157 8,672
Operating expenses:
Compensation and employee benefits 7,700 7,539 8,131 15,239 15,816
Occupancy 1,242 1,454 1,364 2,696 2,828
Equipment 813 798 768 1,611 1,524
Marketing 415 274 610 689 1,142
Federal deposit insurance 506 498 538 1,004 1,083
Data processing 1,101 1,088 987 2,189 2,057
Check card processing 423 475 494 898 940
Professional fees 539 395 523 934 898
Other operating expense 1,469 1,167 1,415 2,636 2,649
Merger related expense 184 50 234
Total operating expenses 14,392 13,738 14,830 28,130 28,937
Income before provision for income taxes 7,912 8,006 7,884 15,918 15,154
Provision for income taxes 2,779 2,744 2,767 5,523 5,330
Net income$ 5,133 $ 5,262 $ 5,117 $ 10,395 $ 9,824
Basic earnings per share$ 0.31 $ 0.32 $ 0.31 $ 0.63 $ 0.58
Diluted earnings per share$ 0.31 $ 0.32 $ 0.30 $ 0.63 $ 0.58
Average basic shares outstanding 16,401 16,476 16,740 16,433 16,812
Average diluted shares outstanding 16,593 16,637 16,822 16,613 16,946

OceanFirst Financial Corp.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
STOCKHOLDERS' EQUITYAt June 30,
2015
At March 31,
2015
At December 31,
2014
At June 30,
2014
Stockholders' equity to total assets 9.25% 9.24% 9.26% 9.27%
Common shares outstanding (in thousands) 16,723 16,863 16,902 17,145
Stockholders' equity per common share$ 13.25 $ 13.06 $ 12.91 $ 12.59
Tangible stockholders' equity per common share 13.25 13.06 12.91 12.59
ASSET QUALITY
Non-performing loans:
Real estate – one-to-four family$ 4,288 $ 3,969 $ 3,115 $ 25,313
Commercial real estate 14,601 13,180 12,758 12,094
Consumer 1,901 2,140 1,877 3,128
Commercial and industrial 115 117 557 164
Total non-performing loans 20,905 19,406 18,307 40,699
Other real estate owned 3,357 3,835 4,664 4,968
Total non-performing assets$24,262 $ 23,241 $ 22,971 $ 45,667
Delinquent loans 30 to 89 days$ 7,258 $ 14,903 $ 8,960 $ 8,923
Troubled debt restructurings:
Non-performing (included in total non-
performing loans above)$ 3,832 $ 3,153 $ 2,031 $ 7,047
Performing 27,618 22,674 21,462 23,000
Total troubled debt restructurings$31,450 $ 25,827 $ 23,493 $ 30,047
Allowance for loan losses$16,534 $ 16,419 $ 16,317 $ 20,936
Allowance for loan losses as a percent of total
loans receivable 0.92% 0.93% 0.95% 1.26%
Allowance for loan losses as a percent of total
non-performing loans 79.09 84.61 89.13 51.44
Non-performing loans as a percent of total
loans receivable 1.16 1.09 1.06 2.44
Non-performing assets as a percent of total
assets 1.01 0.97 0.97 1.96
WEALTH MANAGEMENT
Assets under administration$216,533 $ 217,831 $ 225,234 $229,289

For the Three Months Ended, For the Six Months Ended,
June 30,March 31,June 30, June 30, June 30,
2015 2015 2014 2015 2014
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets 0.86% 0.89% 0.90% 0.88% 0.86%
Return on average stockholders' equity 9.29 9.58 9.45 9.43 9.09
Net interest rate spread 3.15 3.15 3.28 3.14 3.29
Net interest rate margin 3.23 3.24 3.35 3.23 3.36
Operating expenses to average assets 2.40 2.34 2.59 2.37 2.54
Efficiency ratio 63.67 62.11 64.51 62.90 64.45


OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
June 30,
2015
March 31,
2015
December 31,
2014
June 30,
2014
Real estate:
One-to-four family$ 749,416 $ 752,329 $ 742,090 $ 766,761
Commercial real estate, multi-family and land 698,286 667,770 649,951 577,061
Residential construction 52,428 48,891 47,552 46,092
Consumer 192,351 196,377 199,349 201,839
Commercial and industrial 111,229 107,476 83,946 75,215
Total loans 1,803,710 1,772,843 1,722,888 1,666,968
Loans in process (16,073) (16,790) (16,731) (16,374)
Deferred origination costs, net 3,230 3,211 3,207 3,456
Allowance for loan losses (16,534) (16,419) (16,317) (20,936)
Total loans, net 1,774,333 1,742,845 1,693,047 1,633,144
Less: mortgage loans held for sale 1,454 6,020 4,201 1,295
Loans receivable, net$1,772,879 $1,736,825 $1,688,846 $1,631,819
Mortgage loans serviced for others $ 173,090 $ 193,084 $ 197,791 $ 786,095
Loan pipeline:Average Yield
Commercial 4.19%$ 58,613 $ 43,786 $ 46,864 $ 69,535
Construction/permanent 4.12 9,309 9,332 12,674 6,369
One-to-four family 3.90 17,545 26,890 20,072 19,792
Consumer 4.53 8,059 9,333 4,585 5,045
Total 4.16 $ 93,526 $ 89,341 $ 84,195 $ 100,741
For the Three Months Ended,For the Six Months Ended
June 30,
2015
March 31,
2015
June 30,
2014
June 30,
2015
June 30,
2014
Loan originations:
Commercial 4.04%$ 52,037 $ 69,436 $ 46,909 $ 121,473 $ 99,391
Construction/permanent 4.08 11,737 12,568 13,163 24,305 23,579
One-to-four family 3.59 35,524 33,344 32,252 68,868 59,990
Consumer 4.38 13,259 11,063 15,893 24,322 29,272
Total 3.94 $112,557 $ 126,411 $ 108,217 $ 238,968 $ 212,232
Loans sold $ 16,788 $ 10,979 $ 10,936 $ 27,767 $ 21,206
Net charge-offs 185 273 273 458 799

DEPOSITS
June 30,
2015
March 31,
2015
December 31,
2014
June 30,
2014
Type of Account
Non-interest-bearing$ 328,175 $ 308,036 $ 279,944 $ 271,208
Interest-bearing checking 794,310 864,398 836,120 817,085
Money market deposit 123,017 107,937 95,663 107,365
Savings 306,079 306,291 301,190 295,133
Time deposits 210,094 214,264 207,218 214,719
$1,761,675 $1,800,926 $ 1,720,135 $ 1,705,510



OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE THREE MONTHS ENDED,
JUNE 30, 2015March 31, 2015JUNE 30, 2014
AVERAGE
BALANCE
INTERESTAVERAGE
YIELD/
COST
AVERAGE
BALANCE
INTERESTAVERAGE
YIELD/
COST
AVERAGE
BALANCE
INTERESTAVERAGE
YIELD/
COST
(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and
short-term investments$28,636 $6 0.08%$28,249 $ 5 0.07%$26,563 $4 0.06%
Securities (1) and FHLB stock 490,760 2,022 1.65 509,998 2,135 1.67 552,851 2,364 1.71
Loans receivable, net (2) 1,762,995 18,548 4.21 1,702,720 18,029 4.24 1,588,815 17,530 4.41
Total interest-earning assets 2,282,391 20,576 3.61 2,240,967 20,169 3.60 2,168,229 19,898 3.67
Non-interest-earning assets 112,445 111,904 118,551
Total assets$2,394,836 $2,352,871 $2,286,780
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits$1,273,717 238 0.07 $1,278,783 240 0.08 $1,257,291 247 0.08
Time deposits 212,160 729 1.37 205,569 715 1.39 215,148 739 1.37
Total 1,485,877 967 0.26 1,484,352 955 0.26 1,472,439 986 0.27
Borrowed funds 365,804 1,176 1.29 336,578 1,081 1.28 330,933 753 0.91
Total interest-bearing liabilities 1,851,681 2,143 0.46 1,820,930 2,036 0.45 1,803,372 1,739 0.39
Non-interest-bearing deposits 307,528 297,453 252,395
Non-interest-bearing liabilities 14,707 14,695 14,530
Total liabilities 2,173,916 2,133,078 2,070,297
Stockholders' equity 220,920 219,793 216,483
Total liabilities and
stockholders' equity$2,394,836 $2,352,871 $2,286,780
Net interest income $ 18,433 $ 18,133 $ 18,159
Net interest rate spread (3) 3.15% 3.15% 3.28%
Net interest margin (4) 3.23% 3.24% 3.35%

FOR THE SIX MONTHS ENDED,
JUNE 30, 2015JUNE 30, 2014
AVERAGE
BALANCE
INTERESTAVERAGE
YIELD/
COST
AVERAGE
BALANCE
INTERESTAVERAGE
YIELD/
COST
(dollars in thousands)
Assets
Interest-earning assets:
Interest-earning deposits and
short-term investments$28,443 $ 11 0.08%$ 27,940 $10 0.07%
Securities (1) and FHLB stock 500,326 4,157 1.66 557,573 4,857 1.74
Loans receivable, net (2) 1,733,024 36,577 4.22 1,573,135 34,776 4.42
Total interest-earning assets 2,261,793 40,745 3.60 2,158,648 39,643 3.67
Non-interest-earning assets 112,176 117,212
Total assets$2,373,969 $ 2,275,860
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits$1,276,265 477 0.07 $ 1,289,760 610 0.09
Time deposits 208,882 1,445 1.38 215,427 1,472 1.37
Total 1,485,147 1,922 0.26 1,505,187 2,082 0.28
Borrowed funds 351,272 2,257 1.29 307,227 1,337 0.87
Total interest-bearing liabilities 1,836,419 4,179 0.46 1,812,414 3,419 0.38
Non-interest-bearing deposits 302,490 231,631
Non-interest-bearing liabilities 14,701 15,604
Total liabilities 2,153,610 2,059,649
Stockholders' equity 220,359 216,211
Total liabilities and
stockholders' equity$ 2,373,969 $2,275,860
Net interest income $ 36,566 $ 36,224
Net interest rate spread (3) 3.14% 3.29%
Net interest margin (4) 3.23% 3.36%
(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.


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

Source:OceanFirst Financial Corp.