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OceanFirst Financial Corp. Announces First Quarter Financial Results

TOMS RIVER, N.J., April 21, 2016 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:OCFC), (the "Company"), the holding company for OceanFirst Bank (the "Bank"), today announced that diluted earnings per share was $0.25 for the quarter ended March 31, 2016, as compared to $0.32 for the corresponding prior year quarter.

The results of operations for the quarter ended March 31, 2016 included non-recurring merger related expenses which decreased net income, net of tax benefit, by $1.2 million. Excluding this item, core earnings for the quarter ended March 31, 2016 were $5.4 million, or $0.32 per diluted share. (Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of non-recurring merger related expenses.)

Highlights for the quarter are described below.

  • Commercial loans outstanding increased $23.6 million, an annualized growth rate of 9.8%. Growth was adversely affected by cyclical payoffs, however, the loan pipeline remains strong. Total loan originations for the first quarter amounted to $103.3 million.
  • Deposit growth totaled $54.7 million, including $42.7 million of core deposits (all deposits except time deposits). Deposit growth includes $17.0 million of deposits acquired on March 11, 2016 through the purchase of an existing retail branch located in the Toms River market.
  • On March 28, 2016 the Company received regulatory approval for the acquisition of Cape Bancorp, Inc. after the Company entered into a definitive agreement and plan of merger on January 5, 2016. Pending stockholder approvals, the Company expects to close the transaction ahead of schedule on May 2, 2016 and anticipates full integration of Cape’s 22 branches in October 2016.

Chief Executive Officer and President Christopher D. Maher commented, "The Company delivered another quarter of solid earnings, driven by net interest income that was 13.4% higher than the prior year period. Revenue growth offset the incremental investment in five new retail branches acquired or opened during the past year." Mr. Maher added; "The investment in deposit gathering capabilities has supported our strategy of funding loan growth with high quality, core deposits as deposits grew faster than loans during the first quarter."

The Company also announced that the Board of Directors declared its seventy-seventh consecutive quarterly cash dividend on common stock. The dividend for the quarter ended March 31, 2016 of $0.13 per share will be paid on May 20, 2016 to stockholders of record on May 9, 2016.

Results of Operations

On July 31, 2015, the Company completed its acquisition of Colonial American Bank ("Colonial"), which added $142.4 million to assets, $121.2 million to loans, and $123.3 million to deposits. Colonial’s results of operations are included in the consolidated results for the quarter ended March 31, 2016 but are excluded from the results of operation for the corresponding prior year period.

Net income for the quarter ended March 31, 2016 was $4.2 million, or $0.25 per diluted share, as compared to net income of $5.3 million, or $0.32 per diluted share, for the corresponding prior year period. Excluding the non-recurring merger related expenses, diluted earnings per share were equal to the prior year period as higher net interest income was offset by higher operating expenses and provision for loan losses, and lower other income. Net income for the quarter ended March 31, 2016 included a loss of $279,000 attributable to the operations of a hotel, golf and banquet facility acquired in the fourth quarter of 2015 as other real estate owned. Excluding merger related expense, diluted earnings per share decreased $0.01 from the prior linked quarter primarily due to the loss incurred operating other real estate owned.

Net interest income for the quarter ended March 31, 2016 increased to $20.6 million as compared to $18.1 million for the same prior year period, reflecting an increase in interest-earning assets and a higher net interest margin. Average interest-earning assets increased $234.3 million for the quarter as compared to the same prior year period. The current quarter was favorably impacted by the interest-earning assets acquired from Colonial, which averaged $107.9 million for the quarter ended March 31, 2016. Average loans receivable, net, increased $278.4 million for the quarter ended March 31, 2016, as compared to the same prior year period. The increase attributable to Colonial was $101.5 million for the quarter. The net interest margin increased to 3.32% for the quarter ended March 31, 2016, as compared 3.24% for the same prior year period. The yield on average interest-earning assets increased to 3.73% for the quarter ended March 31, 2016, as compared to 3.60% for the same prior year period. The yield on average interest-earning assets for the quarter ended March 31, 2016 benefited from the growth in higher-yielding average loans receivable and the reduction in lower-yielding average securities. The cost of average interest-bearing liabilities increased to 0.50% for the quarter ended March 31, 2016, as compared to 0.45% in the prior year period. In anticipation of an eventual rise in interest rates, the Company has extended its borrowed funds into higher-costing, longer-term maturities and has opportunistically grown higher-cost, longer-term certificates of deposit. Since December 31, 2013, the Bank has extended $206.9 million of short-term funding into 3-5 year maturities, extending the weighted average maturity of term borrowings from 1.3 years to 2.9 years at March 31, 2016. The total cost of deposits (including non-interest bearing deposits) was 0.26% for the quarter ended March 31, 2016, as compared to 0.21% for the prior year period.

Net interest income for the quarter ended March 31, 2016 decreased $129,000, as compared to the prior linked quarter, as the net interest margin decreased to 3.32% from 3.37%. The yield on average interest-earning assets decreased to 3.73% for the quarter ended March 31, 2016, from 3.77% for the prior linked quarter, while the cost of average interest-bearing liabilities remained at 0.50% for both periods. Loan fees, included in net interest income, declined $174,000 from the prior linked quarter.

For the quarter ended March 31, 2016, the provision for loan losses was $563,000, as compared to $375,000, for the corresponding prior year period. Net charge-offs increased to $1.1 million for the quarter ended March 31, 2016, as compared to net charge-offs of $273,000 in the corresponding prior year period and $217,000 for the quarter ended December 31, 2015. Two non-performing commercial loans accounted for $886,000 of the total net charge-off. Non-performing loans decreased by $2.1 million at March 31, 2016, as compared to December 31, 2015.

For the quarter ended March 31, 2016, other income decreased to $3.4 million, as compared to $4.0 million in the same prior year period. The decrease from the prior year quarter was primarily due to higher net losses from other real estate operations of $427,000, as compared to the prior year. The loss is predominately due to the seasonal operations of the hotel, golf and banquet facility acquired as other real estate owned in the fourth quarter of 2015. The Bank is in the process of finalizing a sale agreement with a qualified buyer with an expected mid-year closing. Fees and service charges declined $72,000 from the prior year due to the sector wide impact of the consumer shift away from deposit overdrafts. The 2015 results included a gain on sale of loan servicing of $81,000. For the quarter ended March 31, 2016, other income decreased $742,000, as compared to the prior linked quarter. The decrease was related to a higher net loss on other real estate operations of $368,000 and a reduction in fees and service charges of $265,000.

Operating expenses increased to $16.7 million, for the quarter ended March 31, 2016, as compared to $13.7 million in the same prior year period. Operating expenses for the quarter ended March 31, 2016 include $1.4 million in non-recurring merger related expenses relating to the pending acquisition of Cape. Excluding merger related expenses, the increase in operating expenses over the prior year was primarily due to the operations of Colonial, $448,000; the investment in commercial lending, $441,000; and the impact of the new branches, $331,000.

For the quarter ended March 31, 2016, operating expenses decreased $571,000, as compared to the prior linked quarter, excluding merger related expenses. The decrease was primarily due to lower equipment, marketing and data processing expenses.

The provision for income taxes was $2.5 million, for the quarter ended March 31, 2016, as compared to $2.7 million for the same prior year period. The effective tax rate was 36.8% for the quarter ended March 31, 2016 as compared to 34.3%, for the same prior year period and 34.7% in the prior linked quarter. The increases in the effective tax rate over the prior periods were primarily due to non-deductible merger related expenses.

Financial Condition

Total assets decreased by $4.6 million to $2,588.4 million at March 31, 2016, from $2,593.1 million at December 31, 2015. Loans receivable, net, increased by $26.3 million, to $1,997.0 million at March 31, 2016, from $1,970.7 million at December 31, 2015 and included the purchase of a pool of performing, locally originated, one-to-four family, non-conforming mortgage loans for $12.8 million. The increase in loans receivable, net, was partly offset by a decrease in total securities of $19.0 million. As part of the acquisition of Colonial and the Toms River branch, the Company has outstanding goodwill and core deposit intangible at March 31, 2016 of $2.1 million and $310,000, respectively.

Deposits increased by $54.7 million, to $1,971.4 million at March 31, 2016, from $1,916.7 million at December 31, 2015. Business deposits increased $23.9 million demonstrating the value of relationship based lending. The loan-to-deposit ratio at March 31, 2016 was 101.3%, as compared to 102.8% at December 31, 2015. The deposit growth partly funded a decrease in FHLB advances of $72.5 million, to $251.9 million at March 31, 2016, from $324.4 million at December 31, 2015.

Stockholders' equity increased to $241.1 million at March 31, 2016, as compared to $238.4 million at December 31, 2015. At March 31, 2016, there were 244,804 shares available for repurchase under the stock repurchase program adopted in July of 2014. Tangible stockholders’ equity per common share was $13.75 at March 31, 2016, as compared to $13.67 at December 31, 2015.

Asset Quality

The Company's non-performing loans totaled $16.2 million at March 31, 2016, compared to $18.3 million at December 31, 2015 and $19.4 million at March 31, 2015. Non-performing loans do not include $376,000 of purchased credit impaired ("PCI") loans acquired from Colonial. The Company’s other real estate owned totaled $9.0 million at March 31, 2016, as compared to $8.8 million at December 31, 2015. The amount includes $7.0 million relating to the hotel, golf and banquet facility located in New Jersey which the Company acquired in the fourth quarter of 2015. At March 31, 2016, the Company’s allowance for loan losses was 0.80% of total loans, a decrease from 0.84% at December 31, 2015. These ratios exclude an allowance on the Colonial loans which were acquired at fair value. The allowance for loan losses as a percent of total non-performing loans was 100.13% at March 31, 2016 as compared to 91.51% at December 31, 2015.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, April 22, 2016 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 10083319 from one hour after the end of the call until July 21, 2016. 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 $2.6 billion in assets and 28 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 Litigation 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, 2015 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)
March 31, December 31, March 31,
2016 2015 2015
ASSETS(unaudited) (unaudited)
Cash and due from banks$ 34,261 $43,946 $34,792
Securities available-for-sale, at estimated fair value 30,085 29,902 30,019
Securities held-to-maturity, net (estimated fair value of
$378,613 at March 31, 2016, $397,763 at December 31, 2015,
and $449,955 at March 31, 2015, respectively)
375,616 394,813 442,829
Federal Home Loan Bank of New York stock, at cost 16,645 19,978 16,728
Loans receivable, net 1,996,993 1,970,703 1,736,825
Mortgage loans held for sale 3,386 2,697 6,020
Interest and dividends receivable 6,036 5,860 5,474
Other real estate owned 9,029 8,827 3,835
Premises and equipment, net 28,322 28,419 24,868
Servicing asset 544 589 548
Bank Owned Life Insurance 57,868 57,549 56,494
Deferred tax asset 16,786 17,016 15,372
Other assets 10,485 10,691 10,337
Core deposit intangible 310 256
Goodwill 2,081 1,822
Total assets$ 2,588,447 $ 2,593,068 $ 2,384,141
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits$ 1,971,360 $ 1,916,678 $ 1,800,926
Securities sold under agreements to
repurchase with retail customers
83,913 75,872 65,879
Federal Home Loan Bank advances 251,917 324,385 251,778
Other borrowings 22,500 22,500 27,500
Due to brokers 1,124
Advances by borrowers for taxes and insurance 7,271 7,121 7,485
Other liabilities 10,410 8,066 9,147
Total liabilities 2,347,371 2,354,622 2,163,839
Stockholders' equity:
Preferred stock, $.01 par value,
$1,000 liquidation preference,
5,000,000 shares authorized,
no shares issued
Common stock, $.01 par value,
55,000,000 shares authorized, 33,566,772
shares issued and 17,358,005,
17,286,557, and 16,863,429, shares
outstanding at March 31, 2016,
December 31, 2015, and March 31, 2015,
respectively
336 336 336
Additional paid-in capital 271,003 269,757 266,824
Retained earnings 231,016 229,140 220,677
Accumulated other comprehensive loss (5,923) (6,241) (6,788)
Less: Unallocated common stock held by
Employee Stock Ownership Plan (2,974) (3,045) (3,259)
Treasury stock, 16,208,767, 16,280,215,
and 16,703,343 shares at March 31, 2016,
December 31, 2015, and March 31, 2015,
respectively
(252,382) (251,501) (257,488)
Common stock acquired by Deferred
Compensation Plan
(305) (314) (307)
Deferred Compensation Plan Liability 305 314 307
Total stockholders' equity 241,076 238,446 220,302
Total liabilities and stockholders' equity$ 2,588,447 $ 2,593,068 $ 2,384,141



OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the Three Months Ended,
March 31,December 31,March 31,
2016 2015 2015
------------------------(unaudited)------------------------
Interest income:
Loans$ 21,035 $ 21,143 $ 18,029
Mortgage-backed securities 1,415 1,449 1,623
Investment securities and other 623 557 517
Total interest income 23,073 23,149 20,169
Interest expense:
Deposits 1,271 1,217 955
Borrowed funds 1,243 1,244 1,081
Total interest expense 2,514 2,461 2,036
Net interest income 20,559 20,688 18,133
Provision for loan losses 563 300 375
Net interest income after provision for loan losses 19,996 20,388 17,758
Other income:
Bankcard services revenue 851 926 783
Wealth management revenue 550 530 528
Fees and service charges 1,817 2,082 1,889
Loan servicing income 56 82 52
Net gain on sale of loan servicing 81
Net gain on sales of loans available for sale 179 185 193
Net loss from other real estate operations (406) (38) 21
Income from Bank Owned Life Insurance 319 343 446
Other 10 8 (7)
Total other income 3,376 4,118 3,986
Operating expenses:
Compensation and employee benefits 8,466 8,438 7,539
Occupancy 1,626 1,518 1,454
Equipment 969 1,162 798
Marketing 251 428 274
Federal deposit insurance 529 528 498
Data processing 1,265 1,349 1,088
Check card processing 420 427 475
Professional fees 498 541 395
Other operating expense 1,277 1,481 1,167
Amortization of core deposit intangible 13 13
Merger related expense 1,402 614 50
Total operating expenses 16,716 16,499 13,738
Income before provision for income taxes 6,656 8,007 8,006
Provision for income taxes 2,451 2,777 2,744
Net income$ 4,205 $ 5,230 $ 5,262
Basic earnings per share$ 0.25 $ 0.31 $ 0.32
Diluted earnings per share$ 0.25 $ 0.31 $ 0.32
Average basic shares outstanding 16,906 16,867 16,476
Average diluted shares outstanding 17,118 17,126 16,637



OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Commercial:
Commercial and industrial$ 141,364 $ 144,788 $ 129,379 $ 111,229 $ 107,476
Commercial real estate
– owner-occupied
308,666 307,509 317,438 281,178 274,924
Commercial real estate
– investor
536,754 510,936 486,625 417,108 392,846
Total commercial 986,784 963,233 933,442 809,515 775,246
Consumer:
Residential mortgage 796,139 793,946 789,517 749,416 752,329
Residential construction 54,259 50,757 51,580 52,428 48,891
Home equity loans and lines 190,621 192,368 193,587 191,708 195,843
Other consumer 570 792 719 643 534
Total consumer 1,041,589 1,037,863 1,035,403 994,195 997,597
Total loans 2,028,373 2,001,096 1,968,845 1,803,710 1,772,843
Loans in process (15,033) (14,206) (14,145) (16,073) (16,790)
Deferred origination costs, net 3,253 3,232 3,216 3,230 3,211
Allowance for loan losses (16,214) (16,722) (16,638) (16,534) (16,419)
Total loans, net 2,000,379 1,973,400 1,941,278 1,774,333 1,742,845
Less: mortgage loans held for sale 3,386 2,697 2,306 1,454 6,020
Loans receivable, net$ 1,996,993 $ 1,970,703 $ 1,938,972 $ 1,772,879 $ 1,736,825
Mortgage loans serviced for others $ 152,653 $ 158,244 $ 164,488 $ 173,090 $ 193,084
Loan pipeline:Average Yield
Commercial 4.30% $ 57,571 $ 53,785 $ 71,944 $ 58,613 $ 43,786
Residential mortgage
and construction
3.68 28,528 31,860 39,894 26,854 36,222
Home equity loans
and lines
4.46 8,082 5,481 8,859 8,059 9,333
Total 4.13 $ 94,181 $ 91,126 $ 120,697 $ 93,526 $ 89,341


For the Three Months Ended,
March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
Loan originations:
Commercial 4.18% $ 58,005 $ 72,534 $70,378 $ 52,037 $ 69,436
Residential mortgage and construction 3.92 34,361 43,616 35,994 47,261 45,912
Home equity loans and lines 4.43 10,915 10,431 13,841 13,259 11,063
Total 4.12 $ 103,281 $ 126,581 $ 120,213 $ 112,557 $126,411
Loans sold $ 8,901 $ 9,784 $ 11,063 $ 16,788 $ 10,979


DEPOSITS
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Type of Account
Non-interest-bearing$ 351,743 $ 337,143 $ 362,079 $ 328,175 $ 308,036
Interest-bearing checking 860,468 859,927 883,940 794,310 864,398
Money market deposit 163,885 153,196 151,657 123,017 107,937
Savings 327,845 310,989 310,009 306,079 306,291
Time deposits 267,420 255,423 260,086 210,094 214,264
$ 1,971,361 $ 1,916,678 $ 1,967,771 $ 1,761,675 $ 1,800,926


OceanFirst Financial Corp.
ASSET QUALITY
(in thousands)
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
ASSET QUALITY
Non-performing loans:
Commercial and industrial$ 909 $ 123 $ 115 $ 115 $ 117
Commercial real estate
– owner-occupied
4,354 7,684 15,666 13,139 11,704
Commercial real estate
– investor
940 3,112 1,391 1,462 1,476
Residential mortgage 8,788 5,779 5,481 4,288 3,969
Home equity loans and lines 1,202 1,574 1,738 1,899 2,140
Other consumer 2 3 2
Total non-performing loans 16,193 18,274 24,394 20,905 19,406
Other real estate owned 9,029 8,827 3,262 3,357 3,835
Total non-performing assets$ 25,222 $ 27,101 $ 27,656 $ 24,262 $ 23,241
Purchased credit impaired ("PCI") loans$ 376 $ 461 $ 1,019 $ $
Delinquent loans 30 to 89 days$ 6,996 $ 9,087 $ 8,025 $ 7,258 $ 14,903
Troubled debt restructurings:
Non-performing (included in total
non-performing loans above)
$ 4,775 $ 4,918 $ 3,819 $ 3,832 $ 3,153
Performing 26,689 26,344 26,935 27,618 22,674
Total troubled debt restructurings$ 31,464 $ 31,262 $ 30,754 $ 31,450 $ 25,827
Allowance for loan losses$ 16,214 $ 16,722 $ 16,638 $ 16,534 $ 16,419
Allowance for loan losses
as a percent of total loans
receivable
0.80% 0.84% 0.85% 0.92% 0.93%
Allowance for loan losses
as a percent of total non-performing loans
100.13 91.51 68.21 79.09 84.61
Non-performing loans as a percent of
total loans receivable
0.80 0.91 1.24 1.16 1.09
Non-performing assets as a percent of total
assets
0.97 1.05 1.08 1.01 0.97


NET CHARGE-OFFS
For the quarter ended
March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
Net Charge-offs:
Loan charge-offs$ (1,172) $ (236) $ (210) $ (331) $ (358)
Recoveries on loans 101 19 14 146 85
Net loan charge-offs$ (1,071) $ (217) $ (196) $ (185) $ (273)
Net loan charge-offs to
average total loans
(annualized)
0.21% 0.04% 0.04% 0.04% 0.06%
Net charge-off detail -
(loss) recovery:
Commercial$ (1,073) $ 12 $ (47) $ (3) $ (86)
Residential mortgage
and construction
(24) (117) (51) 11 (10)
Home equity loans and lines 28 (109) (98) (192) (173)
Other consumer (2) (3) (1) (4)
Net loans charged-off$ (1,071) $ (217) $ (196) $ (185) $ (273)


OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE THREE MONTHS ENDED,
MARCH 31, 2016DECEMBER 31, 2015MARCH 31, 2015
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$ 48,501 $ 28 0.23% $ 41,227 $ 16 0.16% $ 28,249 $ 5 0.07%
Securities (1) and FHLB stock 445,696 2,010 1.80 456,486 1,990 1.74 509,998 2,135 1.67
Loans receivable, net (2):
Commercial 972,050 10,998 4.53 943,116 11,154 4.73 740,463 8,299 4.48
Residential 830,840 8,039 3.87 836,722 7,953 3.80 778,483 7,731 3.97
Home equity 191,355 1,990 4.16 193,314 2,028 4.20 196,530 1,991 4.05
Other 501 8 6.39 544 8 5.88 432 8 7.41
Allowance for loan loss net of deferred loan fees (13,645) (13,597) (13,188)
Total loans 1,981,101 21,035 4.25 1,960,099 21,143 4.31 1,702,720 18,029 4.24
Total interest-earning assets 2,475,298 23,073 3.73 2,457,812 23,149 3.77 2,240,967 20,169 3.60
Non-interest-earning assets 129,719 129,297 111,904
Total assets$ 2,605,017 $ 2,587,109 $ 2,352,871
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing checking$ 899,883 305 0.14 $ 909,962 279 0.12 $ 874,126 196 0.09
Money market 156,326 70 0.18 152,416 76 0.20 101,255 20 0.08
Savings 316,148 26 0.03 309,037 27 0.03 303,397 24 0.03
Time deposits 263,722 870 1.32 256,378 836 1.30 205,575 715 1.39
Total 1,636,079 1,271 0.31 1,627,793 1,218 0.30 1,484,353 955 0.26
Securities sold under agreements to repurchase 83,506 28 0.13 78,892 29 0.15 66,641 21 0.13
FHLB advances 266,234 1,084 1.63 252,812 1,040 1.65 242,437 861 1.42
Other borrowings 22,500 131 2.33 25,467 174 2.73 27,500 199 2.89
Total interest-bearing liabilities 2,008,319 2,514 0.50 1,984,964 2,461 0.50 1,820,931 2,036 0.45
Non-interest-bearing deposits 343,371 349,473 297,453
Non-interest-bearing liabilities 13,328 16,174 14,694
Total liabilities 2,365,018 2,350,611 2,133,078
Stockholders' equity 239,999 236,498 219,793
Total liabilities and stockholders' equity$ 2,605,017 $ 2,587,109 $ 2,352,871
Net interest income $ 20,559 $ 20,688 $ 18,133
Net interest rate spread (3) 3.23% 3.27% �� 3.15%
Net interest margin (4) 3.32% 3.37% 3.24%
Total cost of deposits (including non-interest bearing deposits) 0.26% 0.25% 0.21%

(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.

OceanFirst Financial Corp.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share amounts)
March 31, December 31, September 30, June 30,
March 31,
2016 2015 2015 2015 2015
Selected Financial Condition Data:
Total assets$ 2,588,447 $ 2,593,068 $ 2,557,898 $ 2,395,100 $ 2,384,141
Securities available-for-sale,
at estimated fair value
30,085 29,902 30,108 30,030 30,019
Securities held-to-maturity, net 375,616 394,813 392,932 414,625 442,829
Federal Home Loan Bank of
New York stock
16,645 19,978 15,970 18,740 16,728
Loans receivable, net 1,996,993 1,970,703 1,938,972 1,772,879 1,736,825
Mortgage loans held-for-sale 3,386 2,697 2,306 1,454 6,020
Deposits 1,971,360 1,916,678 1,967,771 1,761,675 1,800,926
Federal Home Loan Bank advances 251,917 324,385 233,006 295,616 251,778
Securities sold under agreements to
repurchase and other borrowings
106,413 98,372 105,493 99,187 93,379
Stockholders' equity 241,076 238,446 234,688 221,535 220,302


For the quarter ended
March 31, December 31, September 30, June 30,
March 31,
2016 2015 2015 2015 2015
Selected Operating Data:
Interest income$ 23,073 $ 23,149 $ 21,970 $ 20,576 $ 20,169
Interest expense 2,514 2,461 2,395 2,143 2,036
Net interest income 20,559 20,688 19,575 18,433 18,133
Provision for loan losses 563 300 300 300 375
Net interest income after
provision for loan losses
19,996 20,388 19,275 18,133 17,758
Other income 3,376 4,118 4,152 4,171 3,986
Operating expenses 15,314 15,885 15,117 14,208 13,688
Merger related expenses 1,402 614 1,030 184 50
Income before provision for
income taxes
6,656 8,007 7,280 7,912 8,006
Provision for income taxes 2,451 2,777 2,582 2,779 2,744
Net income$ 4,205 $ 5,230 $ 4,698 $ 5,133 $ 5,262
Diluted earnings per share$ 0.25 $ 0.31 $ 0.28 $ 0.31 $ 0.32


At or For the Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
Selected Financial Ratios and
Other Data(1):
Performance Ratios (Annualized):
Return on average assets (2) 0.65% 0.81% 0.75% 0.86% 0.89%
Return on average stockholders' equity (2) 7.01 8.85 8.02 9.29 9.58
Return on average tangible
stockholders' equity (2)(3)
7.07 8.93 8.07 9.29 9.58
Stockholders' equity to total assets 9.31 9.19 9.18 9.25 9.24
Tangible stockholders' equity
to tangible assets (3)
9.23 9.12 9.10 9.25 9.24
Net interest rate spread 3.23 3.27 3.16 3.15 3.15
Net interest margin 3.32 3.37 3.26 3.23 3.24
Operating expenses to average
assets (2)
2.57 2.55 2.56 2.40 2.34
Efficiency ratio (2) (4) 69.84 66.51 68.05 63.67 62.11


Wealth Management:
Assets under administration (000’s) $203,723 $229,039 $205,087 $216,533 $217,831
Per Share Data:
Cash dividends per common share $ 0.13 $ 0.13 $ 0.13 $ 0.13 $ 0.13
Stockholders' equity per common
share at end of period
13.89 13.79 13.58 13.25 13.06
Tangible stockholders' equity per
common share at end of period (3)
13.75 13.67 13.46 13.25 13.06
Number of full-service customer
facilities:
28 27 27 24 23


For the quarter ended
March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
Quarterly Average Balances
Total securities$ 445,696 $ 456,486 $ 468,707 $ 490,760 $ 509,998
Loans, receivable, net 1,981,101 1,960,099 1,875,458 1,762,995 1,702,720
Total interest-earning assets 2,475,298 2,457,812 2,399,212 2,282,391 2,240,967
Total assets 2,605,017 2,587,109 2,521,481 2,394,836 2,352,871
Transaction deposits 1,372,357 1,371,415 1,319,106 1,273,717 1,278,778
Time deposits 263,722 256,378 244,325 212,160 205,575
Total borrowed funds 372,240 357,171 355,639 365,804 336,578
Total interest-bearing liabilities 2,008,319 1,984,964 1,919,070 1,851,681 1,820,931
Non-interest bearing deposits 343,371 349,473 354,411 307,528 297,453
Stockholder’s equity 239,999 236,498 234,173 220,920 219,793
Total deposits 1,979,450 1,977,266 1,917,842 1,793,405 1,781,806
Quarterly Yields
Total securities 1.80% 1.74% 1.69% 1.65% 1.67%
Loans, receivable, net 4.25 4.31 4.26 4.21 4.24
Total interest-earning assets 3.73 3.77 3.66 3.61 3.60
Transaction deposits 0.12 0.11 0.12 0.07 0.08
Time deposits 1.32 1.30 1.28 1.37 1.39
Borrowed funds 1.34 1.39 1.39 1.29 1.28
Total interest-bearing liabilities 0.50 0.50 0.50 0.46 0.45
Net interest spread 3.23 3.27 3.16 3.15 3.15
Net interest margin 3.32 3.37 3.26 3.23 3.24
Total deposits 0.26 0.25 0.24 0.22 0.21

(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Performance ratios for each period include non-recurring merger related expenses. Refer to Other Items – Non-GAAP Reconciliation for impact of merger related expenses.
(3) Tangible stockholder’s equity and tangible assets exclude intangible assets relating to goodwill and core deposit intangible.
(4) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.


OceanFirst Financial Corp.
OTHER ITEMS
(in thousands, except per share amounts)
NON-GAAP RECONCILIATION
For the quarter ended
March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
Core earnings:
Net income$ 4,205 $ 5,230 $ 4,698 $ 5,133 $ 5,262
Add: Non-core merger related
expenses
1,402 614 1,030 184 50
Less: Income tax benefit on
non-core expenses
(171) (173) (316) (33) (13)
Core earnings$ 5,436 $ 5,671 $ 5,412 $ 5,284 $ 5,299
Core diluted earnings per share$ 0.32 $ 0.33 $ 0.32 $ 0.32 $ 0.32


COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Total stockholder’s equity$ 241,076 $ 238,446 $ 234,688 $ 221,535 $ 220,302
Less:
Goodwill 2,081 1,822 1,845
Core deposit intangible 310 256 269
Tangible stockholders’ equity$ 238,685 $ 236,368 $ 232,574 $ 221,535 $ 220,302
Total Assets$ 2,588,447 $ 2,593,068 $ 2,557,898 $ 2,395,100 $ 2,384,141
Less:
Goodwill 2,081 1,822 1,845
Core deposit intangible 310 256 269
Tangible assets$ 2,586,056 $ 2,590,990 $ 2,555,784 $ 2,395,100 $ 2,384,141
Tangible stockholders’ equity to tangible assets 9.23% 9.12% 9.10% 9.25% 9.24%
Net accretion/amortization of purchase accounting
adjustments included in net interest income$ 164 $ 177 $ 140 $ $

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.