EX-99.1 2 ex991-earningsreleasem.htm EXHIBIT 99.1

|  | Press Release

Exhibit 99.1
Company Contact:
Michael J. Fitzpatrick
Chief Financial Officer
OceanFirst Financial Corp.
Tel: (732) 240-4500, ext. 7506
Email: Mfitzpatrick@oceanfirst.com
FOR IMMEDIATE RELEASE
OCEANFIRST FINANCIAL CORP.
ANNOUNCES FIRST QUARTER EARNINGS AND
FINANCIAL RESULTS
RED BANK, NEW JERSEY, April 23, 2020…OceanFirst Financial Corp. (NASDAQ:“OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), today announced that net income was $16.5 million, or $0.27 per diluted share, for the quarter ended March 31, 2020, as compared to $21.2 million, or $0.42 per diluted share, for the corresponding prior year period.
The results of operations for the quarter ended March 31, 2020 include merger related expenses, branch consolidation expenses, and the Two River Bancorp (“Two River”) and Country Bank Holding Company, Inc. (“Country Bank”) opening credit loss expense under the Current Expected Credit Loss (“CECL”) model, which decreased net income, net of tax benefit, by $10.4 million. Excluding these items, core earnings for the quarter ended March 31, 2020 was $27.0 million, or $0.45 per diluted share. (Please refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of merger related, branch consolidation, and the Two River and Country Bank opening credit loss expenses). The first quarter results were also impacted by the COVID-19 outbreak, through both higher credit loss expense and increased operating expense.
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Highlights for the quarter are described below:

• | Strong organic loan originations of $426.2 million provided total loan growth of $158.4 million (excluding acquired loans) with a record pipeline of $525.3 million at March 31, 2020.

• | On January 1, 2020, the Company completed its acquisitions of Two River and Country Bank. Two River added $1.2 billion to assets, $940.8 million to loans, $85.2 million to goodwill, and $941.8 million to deposits. Country Bank added $832.8 million to assets, $618.7 million to loans, $39.9 million to goodwill, and $652.7 million to deposits.

• | The Company anticipates full integration of operations and the elimination of eight duplicate branches in Two River’s market area in May 2020, resulting in cost savings in future periods. The Bank expects to consolidate an additional five branches, also in May, independent of the acquisitions; bringing the total number of branches consolidated to 53 over the past four years.

• | The Company adopted Accounting Standards Update (“ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments,” which increased credit loss expense by $9.6 million from the prior linked quarter.

• | The Company’s first quarter results were adversely impacted by the COVID-19 outbreak, including an estimated increase in credit loss expense of $7.2 million and an increase in operating expense of $1.0 million. Refer to exhibits filed with the earnings release on Form 8-K for prospective information related to the impact of COVID-19.

“Since the beginning of March, our efforts have largely focused on mitigating the impact of COVID-19 on our employees, customers, and community. We have emphasized employee safety through our work from home initiatives, temporary branch closures, and dispersion of key functions,” said Chairman and Chief Executive Officer, Christopher D. Maher. Mr. Maher added, “We are supporting borrowers impacted by COVID-19 with payment relief programs, as well as waiving certain fees for our
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loan and deposit customers. Subsequent to quarter end, we have actively participated in the SBA’s Paycheck Protection Program, assisting local businesses to retain an estimated 36,000 employees.”
The Company announced that the Company’s Board of Directors declared its ninety-third consecutive quarterly cash dividend on common stock. The dividend, related to the three months ended March 31, 2020, of $0.17 per share will be paid on May 15, 2020 to stockholders of record on May 4, 2020.
Results of Operations
On January 31, 2019, the Company completed its acquisition of Capital Bank of New Jersey (“Capital Bank”) and its results of operations are included in the consolidated results for the quarter ended March 31, 2020, but are excluded from the results of operations for the period from January 1, 2019 to January 31, 2019.
On January 1, 2020, the Company completed its acquisitions of Two River and Country Bank and their respective results of operations from January 1, 2020 through March 31, 2020 are included in the consolidated results for the quarter ended March 31, 2020, but are not included in the results of operations for the corresponding prior year period.
Net income for the quarter ended March 31, 2020, was $16.5 million, or $0.27 per diluted share, as compared to $21.2 million, or $0.42 per diluted share, for the corresponding prior year period. Net income for the quarter ended March 31, 2020 included merger related expenses, branch consolidation expenses, and the Two River and Country Bank opening credit loss expense under the CECL model, which decreased net income, net of tax benefit, by $10.4 million. Net income for the quarter ended March 31, 2019 included merger related and branch consolidation expenses, which decreased net income, net of tax benefit, by $4.4 million. Excluding these items, net income for the quarter ended March 31, 2020 increased over the same prior year period, primarily due to the acquisitions of Two River and Country Bank.
Net interest income for the quarter ended March 31, 2020 increase d to $79.6 million, as compared to $64.4 million for the same prior year period, reflecting an increase in interest-earning assets. Average
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interest-earning assets increase d by $2.186 billion for the quarter ended March 31, 2020, as compared to the same prior year period. The average for the quarter ended March 31, 2020 was favorably impacted by $1.762 billion of interest-earning assets acquired from Two River and Country Bank. Average loans receivable, net, increased by $2.083 billion for the quarter ended March 31, 2020, as compared to the same prior year period. The increase attributable to the acquisitions of Two River and Country Bank were $1.546 billion. The net interest margin for the quarter ended March 31, 2020 decreased to 3.52% from 3.78%, for the same prior year period. For the quarter ended March 31, 2020, the cost of average interest-bearing liabilities increased to 1.05%, from 0.89% in the corresponding prior year period. The total cost of deposits (including non-interest bearing deposits) was 0.70% for the quarter ended March 31, 2020, as compared to 0.57%, in the same prior year period. Deposit costs increased primarily due to the addition of higher priced deposits as a result of the Two River and Country Bank acquisitions.
Net interest income for the quarter ended March 31, 2020, increase d by $16.3 million, as compared to the prior linked quarter, as average interest-earning assets increase d by $1.886 billion. The net interest margin increase d to 3.52% for the quarter ended March 31, 2020, as compared to 3.48% for the prior linked quarter. The increase was primarily due to a net increase in purchase accounting accretion of eight basis points as a result of the acquisition of Two River and Country Bank. Excluding the impact of purchase accounting and prepayment fees, the core net interest margin expanded by one basis point. The total cost of deposits (including non-interest bearing deposits) was 0.70% for the quarter ended March 31, 2020, as compared to 0.64% for the quarter ended December 31, 2019.
For the quarter ended March 31, 2020, the credit loss expense was $10.0 million, as compared to $620,000 for the corresponding prior year period, and $355,000 in the prior linked quarter. Net loan charge-offs were $1.2 million for the quarter ended March 31, 2020, as compared to $492,000 in the corresponding prior year period, and $139,000 in the prior linked quarter. Quarterly net charge-offs included $949,000 taken on the sale of higher risk residential loans. Non-performing loans totaled $16.3 million at March 31, 2020, as compared to $17.8 million at December 31, 2019 and $20.9 million at March 31, 2019. Credit
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expense was significantly influenced by actual and expected economic conditions due to the COVID-19 outbreak. Refer to exhibits filed with the earnings release on Form 8-K for detailed information on credit loss expense.
For the quarter ended March 31, 2020, other income increase d to $13.7 million, as compared to $9.5 million, for the corresponding prior year period. The increase was partly due to the impact of the Two River and Country Bank acquisitions, which added $558,000 and $162,000, respectively, to other income for the quarter ended March 31, 2020. Excluding the Two River and Country Bank acquisitions, the increase in other income for the quarter ended March 31, 2020 was primarily due to an increase in commercial loan swap fee income of $3.6 million, as compared to the corresponding prior year period.
For the quarter ended March 31, 2020, other income increased by $2.5 million, as compared to the prior linked quarter. The increase was partially due to the impact of the Two River and Country Bank acquisitions and an increase in commercial loan swap fee income of $2.0 million.
Operating expenses increased to $62.8 million for the quarter ended March 31, 2020, as compared to $47.3 million in the same prior year period. Operating expenses for the quarter ended March 31, 2020 included $11.1 million of merger related and branch consolidation expenses, as compared to $5.4 million of merger related and branch consolidation expenses, in the same prior year period. Excluding the impact of merger related and branch consolidation expenses, the change in operating expenses over the prior year were due to the Two River and Country Bank acquisitions, which added $5.3 million and $3.2 million, respectively, for the quarter ended March 31, 2020. The remaining increase in operating expenses was primarily due to expenses relating to the COVID-19 outbreak of $1.0 million.
For the quarter ended March 31, 2020, operating expenses increased by $9.4 million, as compared to the prior linked quarter, excluding merger related and branch consolidation expenses for both periods and non-recurring professional fees of $1.3 million for the quarter ended December 31, 2019. The increase in operating expenses was due to the Two River and Country Bank acquisitions and the expenses relating to the COVID-19 outbreak.
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The provision for income taxes was $4.0 million for the quarter ended March 31, 2020, as compared to $4.8 million, for the same prior year period. The effective tax rate was 19.7% for the quarter ended March 31, 2020, as compared to 18.6% for the same prior year period. The higher effective tax rate in the current year period is primarily due to the impact of a New Jersey tax code change.
Financial Condition
Total assets increase d by $2.243 billion, to $10.489 billion at March 31, 2020, from $8.246 billion at December 31, 2019, primarily as a result of the acquisitions of Two River and Country Bank, which added $2.031 billion to total assets. Loans receivable, net of allowance for credit losses, increase d by $1.706 billion, to $7.914 billion at March 31, 2020, from $6.208 billion at December 31, 2019, due to acquired loans from Two River and Country Bank of $1.559 billion. As part of the acquisitions of Two River and Country Bank, the Company’s goodwill balance increased to $500.1 million at March 31, 2020, from $374.6 million at December 31, 2019 and the core deposit intangible increased to $28.3 million, from $15.6 million.
Deposits increase d by $1.563 billion, to $7.892 billion at March 31, 2020, from $6.329 billion at December 31, 2019, primarily due to acquired deposits from Two River and Country Bank of $1.594 billion. The loan-to-deposit ratio at March 31, 2020 was 100.3%, as compared to 98.1% at December 31, 2019.
Stockholders’ equity increase d to $1.410 billion at March 31, 2020, as compared to $1.153 billion at December 31, 2019. The acquisitions of Two River and Country Bank added $261.4 million to stockholders’ equity. At March 31, 2020, there were 2,019,145 shares available for repurchase under the Company’s stock repurchase program. For the quarter ended March 31, 2020, the Company repurchased 648,851 shares under the repurchase program at a weighted average cost of $22.83. The Company suspended its repurchase activity on February 28, 2020. Tangible stockholders’ equity per common share decrease d to $14.62 at March 31, 2020, as compared to $15.13 at December 31, 2019.
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Asset Quality
The Company’s non-performing loans decrease d to $16.3 million at March 31, 2020, as compared to $17.8 million at December 31, 2019. Non-performing loans do not include $59.8 million of purchased with credit deterioration (“PCD”) loans acquired in the Two River, Country Bank, Capital Bank, Sun Bancorp, Inc. (“Sun”), Ocean Shore Holding Co. (“Ocean Shore”), Cape Bancorp, Inc. (“Cape”), and Colonial American Bank (“Colonial American”) acquisitions (“Acquisition Transactions”). The Company’s other real estate owned totaled $484,000 at March 31, 2020, as compared to $264,000 at December 31, 2019.
At March 31, 2020, the Company’s allowance for loan losses was 0.37% of total loans, an increase from 0.27% at December 31, 2019. The allowance for credit losses as a percent of total non-performing loans was 182.2% at March 31, 2020, as compared to 94.4% at December 31, 2019.
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Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding merger related expenses, branch consolidation expenses, Two River and Country Bank opening credit loss expense under the CECL model, non-recurring professional fees, compensation expense due to the retirement of an executive officer, and reduction in income tax expense from the revaluation of state deferred tax assets as a result of a change in the New Jersey tax code, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.
Conference Call
As previously announced, the Company will host an earnings conference call on Friday, April 24, 2020 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 10141831 from one hour after the end of the call until July 24, 2020. 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.
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OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $10.5 billion regional bank operating throughout New Jersey, metropolitan Philadelphia and metropolitan New York City. OceanFirst Bank delivers commercial and residential financing solutions, trust and asset management and deposit services and is one of the largest and oldest community-based financial institutions headquartered in 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, accounting principles and guidelines and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, under Item 1A - Risk Factors and elsewhere, 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.
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OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)

|  | March 31, 2020 |  | December 31, 2019 |  | March 31, 2019
|  | (Unaudited) |  |  |  | (Unaudited)
Assets |  |  |  |  |  |
Cash and due from banks |  | $ | 256,470 |  |  | $ | 120,544 |  |  | $ | 134,235 |
Federal funds sold |  | — |  |  | — |  |  | 18,733 |
Debt securities available-for-sale, at estimated fair value |  | 153,738 |  |  | 150,960 |  |  | 122,558 |
Debt securities held-to-maturity, net of allowance for credit losses of $2,529 at March 31, 2020 (estimated fair value of $928,582 at March 31, 2020, $777,290 at December 31, 2019, and $896,812 at March 31, 2019) |  | 914,255 |  |  | 768,873 |  |  | 900,614 |
Equity investments, at estimated fair value |  | 14,409 |  |  | 10,136 |  |  | 9,816 |
Restricted equity investments, at cost |  | 81,005 |  |  | 62,356 |  |  | 55,663 |
Loans receivable, net of allowance for credit losses of $29,635 at March 31, 2020, $16,852 at December 31, 2019 and $16,705 at March 31, 2019 |  | 7,913,541 |  |  | 6,207,680 |  |  | 5,968,830 |
Loans held-for-sale |  | 17,782 |  |  | — |  |  | — |
Interest and dividends receivable |  | 27,930 |  |  | 21,674 |  |  | 22,294 |
Other real estate owned |  | 484 |  |  | 264 |  |  | 1,594 |
Premises and equipment, net |  | 104,560 |  |  | 102,691 |  |  | 113,226 |
Bank Owned Life Insurance |  | 261,270 |  |  | 237,411 |  |  | 234,183 |
Assets held for sale |  | 3,785 |  |  | 3,785 |  |  | 4,522 |
Other assets |  | 211,476 |  |  | 169,532 |  |  | 112,955 |
Core deposit intangible |  | 28,276 |  |  | 15,607 |  |  | 18,629 |
Goodwill |  | 500,093 |  |  | 374,632 |  |  | 375,096 |
Total assets |  | $ | 10,489,074 |  |  | $ | 8,246,145 |  |  | $ | 8,092,948 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |
Deposits |  | $ | 7,892,067 |  |  | $ | 6,328,777 |  |  | $ | 6,290,485 |
Federal Home Loan Bank advances |  | 825,824 |  |  | 519,260 |  |  | 418,016 |
Securities sold under agreements to repurchase with retail customers |  | 90,175 |  |  | 71,739 |  |  | 66,174 |
Other borrowings |  | 120,213 |  |  | 96,801 |  |  | 99,579 |
Advances by borrowers for taxes and insurance |  | 24,931 |  |  | 13,884 |  |  | 15,138 |
Other liabilities |  | 126,030 |  |  | 62,565 |  |  | 76,393 |
Total liabilities |  | 9,079,240 |  |  | 7,093,026 |  |  | 6,965,785 |
Total stockholders’ equity |  | 1,409,834 |  |  | 1,153,119 |  |  | 1,127,163 |
Total liabilities and stockholders’ equity |  | $ | 10,489,074 |  |  | $ | 8,246,145 |  |  | $ | 8,092,948 |

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OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)

|  | For the Three Months Ended,
|  | March 31, 2020 |  | December 31, 2019 |  | March 31, 2019
|  | |-------------------- (Unaudited) --------------------|
Interest income: |  |  |  |  |  |
Loans |  | $ | 89,944 |  |  | $ | 70,298 |  |  | $ | 69,001 |
Mortgage-backed securities |  | 3,844 |  |  | 3,552 |  |  | 4,041 |
Debt securities, equity investments and other |  | 4,419 |  |  | 3,225 |  |  | 3,380 |
Total interest income |  | 98,207 |  |  | 77,075 |  |  | 76,422 |
Interest expense: |  |  |  |  |  |
Deposits |  | 13,936 |  |  | 10,214 |  |  | 8,639 |
Borrowed funds |  | 4,626 |  |  | 3,507 |  |  | 3,395 |
Total interest expense |  | 18,562 |  |  | 13,721 |  |  | 12,034 |
Net interest income |  | 79,645 |  |  | 63,354 |  |  | 64,388 |
Credit loss expense |  | 9,969 |  |  | 355 |  |  | 620 |
Net interest income after credit loss expense |  | 69,676 |  |  | 62,999 |  |  | 63,768 |
Other income: |  |  |  |  |  |
Bankcard services revenue |  | 2,481 |  |  | 2,641 |  |  | 2,285 |
Trust and asset management revenue |  | 515 |  |  | 478 |  |  | 498 |
Fees and service charges |  | 4,873 |  |  | 4,710 |  |  | 4,516 |
Net gain on sales of loans |  | 173 |  |  | 1 |  |  | 8 |
Net unrealized gain (loss) on equity investments |  | 155 |  |  | (63 | ) |  | 108 |
Net loss from other real estate operations |  | (150 | ) |  | (95 | ) |  | (6 | )
Income from Bank Owned Life Insurance |  | 1,575 |  |  | 1,375 |  |  | 1,321 |
Commercial loan swap income |  | 4,050 |  |  | 2,062 |  |  | 472 |
Other |  | 25 |  |  | 122 |  |  | 310 |
Total other income |  | 13,697 |  |  | 11,231 |  |  | 9,512 |
Operating expenses: |  |  |  |  |  |
Compensation and employee benefits |  | 29,885 |  |  | 22,518 |  |  | 22,414 |
Occupancy |  | 5,276 |  |  | 4,071 |  |  | 4,530 |
Equipment |  | 1,943 |  |  | 1,775 |  |  | 1,946 |
Marketing |  | 769 |  |  | 840 |  |  | 930 |
Federal deposit insurance and regulatory assessments |  | 667 |  |  | 296 |  |  | 832 |
Data processing |  | 4,177 |  |  | 4,078 |  |  | 3,654 |
Check card processing |  | 1,276 |  |  | 1,557 |  |  | 1,438 |
Professional fees |  | 2,302 |  |  | 3,641 |  |  | 1,709 |
Other operating expense |  | 3,802 |  |  | 3,815 |  |  | 3,369 |
Amortization of core deposit intangible |  | 1,578 |  |  | 998 |  |  | 1,005 |
Branch consolidation expense |  | 2,594 |  |  | 268 |  |  | 391 |
Merger related expenses |  | 8,527 |  |  | 3,742 |  |  | 5,053 |
Total operating expenses |  | 62,796 |  |  | 47,599 |  |  | 47,271 |
Income before provision for income taxes |  | 20,577 |  |  | 26,631 |  |  | 26,009 |
Provision for income taxes |  | 4,044 |  |  | 3,181 |  |  | 4,836 |
Net income |  | $ | 16,533 |  |  | $ | 23,450 |  |  | $ | 21,173 |
Basic earnings per share |  | $ | 0.28 |  |  | $ | 0.47 |  |  | $ | 0.43 |
Diluted earnings per share |  | $ | 0.27 |  |  | $ | 0.47 |  |  | $ | 0.42 |
Average basic shares outstanding |  | 59,876 |  |  | 49,890 |  |  | 49,526 |
Average diluted shares outstanding |  | 60,479 |  |  | 50,450 |  |  | 50,150 |

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OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(dollars in thousands)

LOANS RECEIVABLE |  |  | At
|  |  | March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019
Commercial: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | $ | 502,760 |  |  | $ | 396,434 |  |  | $ | 406,580 |  |  | $ | 392,336 |  |  | $ | 383,686 |
Commercial real estate - owner - occupied |  | 1,220,983 |  |  | 792,653 |  |  | 787,752 |  |  | 771,640 |  |  | 802,229 |
Commercial real estate - investor |  | 3,331,662 |  |  | 2,296,410 |  |  | 2,232,159 |  |  | 2,143,093 |  |  | 2,161,451 |
Total commercial |  |  | 5,055,405 |  |  | 3,485,497 |  |  | 3,426,491 |  |  | 3,307,069 |  |  | 3,347,366 |
Consumer: |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  | 2,458,641 |  |  | 2,321,157 |  |  | 2,234,361 |  |  | 2,193,829 |  |  | 2,162,668 |
Home equity loans and lines |  |  | 335,624 |  |  | 318,576 |  |  | 330,446 |  |  | 341,972 |  |  | 351,303 |
Other consumer |  |  | 82,920 |  |  | 89,422 |  |  | 98,835 |  |  | 109,015 |  |  | 116,838 |
Total consumer |  |  | 2,877,185 |  |  | 2,729,155 |  |  | 2,663,642 |  |  | 2,644,816 |  |  | 2,630,809 |
Total loans |  |  | 7,932,590 |  |  | 6,214,652 |  |  | 6,090,133 |  |  | 5,951,885 |  |  | 5,978,175 |
Deferred origination costs, net |  | 10,586 |  |  | 9,880 |  |  | 8,441 |  |  | 8,180 |  |  | 7,360 |
Allowance for credit losses |  |  | (29,635 | ) |  | (16,852 | ) |  | (16,636 | ) |  | (16,135 | ) |  | (16,705 | )
Loans receivable, net |  |  | $ | 7,913,541 |  |  | $ | 6,207,680 |  |  | $ | 6,081,938 |  |  | $ | 5,943,930 |  |  | $ | 5,968,830 |
Mortgage loans serviced for others |  | $ | 51,399 |  |  | $ | 50,042 |  |  | $ | 54,457 |  |  | $ | 90,882 |  |  | $ | 92,274 |
| At March 31, 2020 Average Yield |  |  |  |  |  |  |  |  |  |
Loan pipeline (1): |  |  |  |  |  |  |  |  |  |  |
Commercial | 3.95 | % |  | $ | 293,820 |  |  | $ | 219,269 |  |  | $ | 126,578 |  |  | $ | 212,712 |  |  | $ | 122,325 |
Residential real estate | 3.42 |  |  | 223,032 |  |  | 105,396 |  |  | 189,403 |  |  | 82,555 |  |  | 63,598 |
Home equity loans and lines | 4.40 |  |  | 8,429 |  |  | 3,049 |  |  | 3,757 |  |  | 2,550 |  |  | 4,688 |
Total | 3.73 | % |  | $ | 525,281 |  |  | $ | 327,714 |  |  | $ | 319,738 |  |  | $ | 297,817 |  |  | $ | 190,611 |

| For the Three Months Ended |
| March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |
| Average Yield |  |  |  |  |  |  |  |  |  |  |
Loan originations: |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 3.49 | % |  | $ | 266,882 |  |  | $ | 264,938 |  |  | $ | 315,405 |  |  | $ | 123,882 |  |  | $ | 172,233 |  |
Residential real estate | 3.51 |  |  | 148,675 |  |  | 226,492 |  |  | 156,308 |  |  | 120,771 |  |  | 75,530 |  |
Home equity loans and lines | 5.13 |  |  | 10,666 |  |  | 12,961 |  |  | 10,498 |  |  | 14,256 |  |  | 13,072 |  |
Total | 3.54 | % |  | $ | 426,223 |  |  | $ | 504,391 |  |  | $ | 482,211 |  |  | $ | 258,909 |  |  | $ | 260,835 |  | (2)
Loans sold |  |  | $ | 7,500 |  | (3) | $ | 110 |  |  | $ | — |  | (3) | $ | 403 |  | (3) | $ | 495 |  |

(1) | Loan pipeline includes loans approved but not funded.

(2) | Excludes purchased loans of $100.0 million for residential real estate.

(3) | Excludes the sale of under-performing residential loans of $4.0 million and commercial loans of $5.1 million for the three months ended March 31, 2020, and small business administration loans of $3.5 million and under-performing residential loans of $2.9 million for the three months ended September 30, 2019, and June 30, 2019, respectively.

DEPOSITS | At
| March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019
Type of Account |  |  |  |  |  |  |  |  |
Non-interest-bearing | $ | 1,783,216 |  |  | $ | 1,377,396 |  |  | $ | 1,406,194 |  |  | $ | 1,370,167 |  |  | $ | 1,352,520 |
Interest-bearing checking | 2,647,487 |  |  | 2,539,428 |  |  | 2,400,331 |  |  | 2,342,913 |  |  | 2,400,192 |
Money market deposit | 620,145 |  |  | 578,147 |  |  | 593,457 |  |  | 642,985 |  |  | 666,067 |
Savings | 1,420,628 |  |  | 898,174 |  |  | 901,168 |  |  | 909,501 |  |  | 922,113 |
Time deposits | 1,420,591 |  |  | 935,632 |  |  | 919,705 |  |  | 921,921 |  |  | 949,593 |
| $ | 7,892,067 |  |  | $ | 6,328,777 |  |  | $ | 6,220,855 |  |  | $ | 6,187,487 |  |  | $ | 6,290,485 |

12

OceanFirst Financial Corp.
ASSET QUALITY
(dollars in thousands)

ASSET QUALITY | March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019
Non-performing loans: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 207 |  |  | $ | 207 |  |  | $ | 207 |  |  | $ | 207 |  |  | $ | 240 |
Commercial real estate - owner-occupied | 4,219 |  |  | 4,811 |  |  | 4,537 |  |  | 4,818 |  |  | 4,565 |
Commercial real estate - investor | 3,384 |  |  | 2,917 |  |  | 4,073 |  |  | 4,050 |  |  | 4,115 |
Residential real estate | 5,920 |  |  | 7,181 |  |  | 5,953 |  |  | 5,747 |  |  | 8,611 |
Home equity loans and lines | 2,533 |  |  | 2,733 |  |  | 2,683 |  |  | 2,974 |  |  | 3,364 |
Total non-performing loans | 16,263 |  |  | 17,849 |  |  | 17,453 |  |  | 17,796 |  |  | 20,895 |
Other real estate owned | 484 |  |  | 264 |  |  | 294 |  |  | 865 |  |  | 1,594 |
Total non-performing assets | $ | 16,747 |  |  | $ | 18,113 |  |  | $ | 17,747 |  |  | $ | 18,661 |  |  | $ | 22,489 |
Purchased with credit deterioration (“PCD”) loans (1) | $ | 59,783 |  |  | $ | 13,265 |  |  | $ | 13,281 |  |  | $ | 13,432 |  |  | $ | 16,306 |
Delinquent loans 30 to 89 days | $ | 48,905 |  |  | $ | 14,798 |  |  | $ | 19,905 |  |  | $ | 20,029 |  |  | $ | 21,578 |
Troubled debt restructurings: |  |  |  |  |  |  |  |  |
Non-performing (included in total non-performing loans above) | $ | 6,249 |  |  | $ | 6,566 |  |  | $ | 6,152 |  |  | $ | 6,815 |  |  | $ | 6,484 |
Performing | 16,102 |  |  | 18,042 |  |  | 18,977 |  |  | 19,314 |  |  | 19,690 |
Total troubled debt restructurings | $ | 22,351 |  |  | $ | 24,608 |  |  | $ | 25,129 |  |  | $ | 26,129 |  |  | $ | 26,174 |
Allowance for credit losses | $ | 29,635 |  |  | $ | 16,852 |  |  | $ | 16,636 |  |  | $ | 16,135 |  |  | $ | 16,705 |
Allowance for credit losses as a percent of total loans receivable | 0.37 | % |  | 0.27 | % |  | 0.27 | % |  | 0.27 | % |  | 0.28 | %
Allowance for credit losses as a percent of total non-performing loans | 182.22 |  |  | 94.41 |  |  | 95.32 |  |  | 90.67 |  |  | 79.95 |
Non-performing loans as a percent of total loans receivable | 0.21 |  |  | 0.29 |  |  | 0.29 |  |  | 0.30 |  |  | 0.35 |
Non-performing assets as a percent of total assets | 0.16 |  |  | 0.22 |  |  | 0.22 |  |  | 0.23 |  |  | 0.28 |

NET CHARGE-OFFS | For the Three Months Ended
| March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019
Net charge-offs: |  |  |  |  |  |  |  |  |
Loan charge-offs | $ | (1,384 | ) |  | $ | (445 | ) |  | $ | (353 | ) |  | $ | (1,138 | ) |  | $ | (868 | )
Recoveries on loans | 230 |  |  | 306 |  |  | 549 |  |  | 212 |  |  | 376 |
Net loan recoveries (charge-offs) | $ | (1,154 | ) | (2) | $ | (139 | ) |  | $ | 196 |  |  | $ | (926 | ) | (2) | $ | (492 | )
Net loan charge-offs to average total loans (annualized) | 0.06 | % |  | 0.01 | % |  | NM* |  |  | 0.06 | % |  | 0.03 | %
Net charge-off detail - (loss) recovery: |  |  |  |  |  |  |  |  |
Commercial | $ | 59 |  |  | $ | 163 |  |  | $ | 256 |  |  | $ | (58 | ) |  | $ | (58 | )
Residential real estate | (1,112 | ) |  | (61 | ) |  | 12 |  |  | (728 | ) |  | (425 | )
Home equity loans and lines | (36 | ) |  | (240 | ) |  | (10 | ) |  | (121 | ) |  | (4 | )
Other consumer | (65 | ) |  | (1 | ) |  | (62 | ) |  | (19 | ) |  | (5 | )
Net loan recoveries (charge-offs) | $ | (1,154 | ) | (2) | $ | (139 | ) |  | $ | 196 |  |  | $ | (926 | ) | (2) | $ | (492 | )

(1) | PCD loans are not included in non-performing loans or delinquent loans totals.

(2) | Included in net loan charge-offs for the three months ended March 31, 2020 and June 30, 2019 are $949 and $429, respectively, relating to under-performing loans sold.

* Not Meaningful
13

OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME

| For the Three Months Ended
| March 31, 2020 |  | December 31, 2019 |  | March 31, 2019
(dollars in thousands) | Average Balance |  | Interest |  | Average Yield/ Cost |  | Average Balance |  | Interest |  | Average Yield/ Cost |  | Average Balance |  | Interest |  | Average Yield/ Cost
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning deposits and short-term investments | $ | 63,726 |  |  | $ | 342 |  |  | 2.16 | % |  | $ | 43,495 |  |  | $ | 196 |  |  | 1.79 | % |  | $ | 79,911 |  |  | $ | 467 |  |  | 2.37 | %
Securities (1) | 1,186,535 |  |  | 7,921 |  |  | 2.68 |  |  | 1,008,461 |  |  | 6,581 |  |  | 2.59 |  |  | 1,067,150 |  |  | 6,954 |  |  | 2.64 |
Loans receivable, net (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 4,960,991 |  |  | 59,875 |  |  | 4.85 |  |  | 3,442,771 |  |  | 42,416 |  |  | 4.89 |  |  | 3,211,296 |  |  | 41,408 |  |  | 5.23 |
Residential | 2,473,410 |  |  | 24,628 |  |  | 3.98 |  |  | 2,309,741 |  |  | 22,469 |  |  | 3.89 |  |  | 2,094,131 |  |  | 21,404 |  |  | 4.09 |
Home Equity | 339,003 |  |  | 4,070 |  |  | 4.83 |  |  | 323,878 |  |  | 4,243 |  |  | 5.20 |  |  | 353,358 |  |  | 4,707 |  |  | 5.40 |
Other | 87,478 |  |  | 1,371 |  |  | 6.30 |  |  | 94,350 |  |  | 1,170 |  |  | 4.92 |  |  | 119,185 |  |  | 1,482 |  |  | 5.04 |
Allowance for credit losses net of deferred loan fees | (10,220 | ) |  | — |  |  | — |  |  | (7,932 | ) |  | — |  |  | — |  |  | (10,083 | ) |  | — |  |  | — |
Loans Receivable, net | 7,850,662 |  |  | 89,944 |  |  | 4.61 |  |  | 6,162,808 |  |  | 70,298 |  |  | 4.53 |  |  | 5,767,887 |  |  | 69,001 |  |  | 4.85 |
Total interest-earning assets | 9,100,923 |  |  | 98,207 |  |  | 4.34 |  |  | 7,214,764 |  |  | 77,075 |  |  | 4.24 |  |  | 6,914,948 |  |  | 76,422 |  |  | 4.48 |
Non-interest-earning assets | 1,231,886 |  |  |  |  |  |  | 977,413 |  |  |  |  |  |  | 924,368 |  |  |  |  |
Total assets | $ | 10,332,809 |  |  |  |  |  |  | $ | 8,192,177 |  |  |  |  |  |  | $ | 7,839,316 |  |  |  |  |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing checking | $ | 2,807,793 |  |  | 5,132 |  |  | 0.74 | % |  | $ | 2,562,059 |  |  | 4,477 |  |  | 0.69 | % |  | $ | 2,508,669 |  |  | 3,745 |  |  | 0.61 | %
Money market | 614,062 |  |  | 1,040 |  |  | 0.68 |  |  | 592,116 |  |  | 1,243 |  |  | 0.83 |  |  | 623,868 |  |  | 1,157 |  |  | 0.75 |
Savings | 1,403,338 |  |  | 1,555 |  |  | 0.45 |  |  | 899,051 |  |  | 308 |  |  | 0.14 |  |  | 904,047 |  |  | 286 |  |  | 0.13 |
Time deposits | 1,459,348 |  |  | 6,209 |  |  | 1.71 |  |  | 931,228 |  |  | 4,186 |  |  | 1.78 |  |  | 932,341 |  |  | 3,451 |  |  | 1.50 |
Total | 6,284,541 |  |  | 13,936 |  |  | 0.89 |  |  | 4,984,454 |  |  | 10,214 |  |  | 0.81 |  |  | 4,968,925 |  |  | 8,639 |  |  | 0.71 |
FHLB Advances | 631,329 |  |  | 2,824 |  |  | 1.80 |  |  | 412,073 |  |  | 2,075 |  |  | 2.00 |  |  | 339,686 |  |  | 1,839 |  |  | 2.20 |
Securities sold under agreements to repurchase | 82,105 |  |  | 95 |  |  | 0.47 |  |  | 68,257 |  |  | 85 |  |  | 0.49 |  |  | 65,295 |  |  | 55 |  |  | 0.34 |
Other borrowings | 118,851 |  |  | 1,707 |  |  | 5.78 |  |  | 96,712 |  |  | 1,347 |  |  | 5.53 |  |  | 99,517 |  |  | 1,501 |  |  | 6.12 |
Total interest-bearing liabilities | 7,116,826 |  |  | 18,562 |  |  | 1.05 |  |  | 5,561,496 |  |  | 13,721 |  |  | 0.98 |  |  | 5,473,423 |  |  | 12,034 |  |  | 0.89 |
Non-interest-bearing deposits | 1,687,582 |  |  |  |  |  |  | 1,393,002 |  |  |  |  |  |  | 1,211,934 |  |  |  |  |
Non-interest-bearing liabilities | 113,477 |  |  |  |  |  |  | 92,014 |  |  |  |  |  |  | 55,975 |  |  |  |  |
Total liabilities | 8,917,885 |  |  |  |  |  |  | 7,046,512 |  |  |  |  |  |  | 6,741,332 |  |  |  |  |
Stockholders’ equity | 1,414,924 |  |  |  |  |  |  | 1,145,665 |  |  |  |  |  |  | 1,097,984 |  |  |  |  |
Total liabilities and equity | $ | 10,332,809 |  |  |  |  |  |  | $ | 8,192,177 |  |  |  |  |  |  | $ | 7,839,316 |  |  |  |  |
Net interest income |  |  | $ | 79,645 |  |  |  |  |  |  | $ | 63,354 |  |  |  |  |  |  | $ | 64,388 |  |  |
Net interest rate spread (3) |  |  |  |  | 3.29 | % |  |  |  |  |  | 3.26 | % |  |  |  |  |  | 3.59 | %
Net interest margin (4) |  |  |  |  | 3.52 | % |  |  |  |  |  | 3.48 | % |  |  |  |  |  | 3.78 | %
Total cost of deposits (including non-interest-bearing deposits) |  |  |  |  | 0.70 | % |  |  |  |  |  | 0.64 | % |  |  |  |  |  | 0.57 | %

(1) | Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost.

(2) | Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated credit 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.

14

OceanFirst Financial Corp.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share amounts)

|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Selected Financial Condition Data: |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 10,489,074 |  |  | $ | 8,246,145 |  |  | $ | 8,135,173 |  |  | $ | 8,029,057 |  |  | $ | 8,092,948 |
Debt securities available-for-sale, at estimated fair value |  | 153,738 |  |  | 150,960 |  |  | 127,308 |  |  | 123,610 |  |  | 122,558 |
Debt securities held-to-maturity, net of allowance for credit losses |  | 914,255 |  |  | 768,873 |  |  | 819,253 |  |  | 863,838 |  |  | 900,614 |
Equity investments, at estimated fair value |  | 14,409 |  |  | 10,136 |  |  | 10,145 |  |  | 10,002 |  |  | 9,816 |
Restricted equity investments, at cost |  | 81,005 |  |  | 62,356 |  |  | 62,095 |  |  | 59,425 |  |  | 55,663 |
Loans receivable, net of allowance for credit losses |  | 7,913,541 |  |  | 6,207,680 |  |  | 6,081,938 |  |  | 5,943,930 |  |  | 5,968,830 |
Deposits |  | 7,892,067 |  |  | 6,328,777 |  |  | 6,220,855 |  |  | 6,187,487 |  |  | 6,290,485 |
Federal Home Loan Bank advances |  | 825,824 |  |  | 519,260 |  |  | 512,149 |  |  | 453,646 |  |  | 418,016 |
Securities sold under agreements to repurchase and other borrowings |  | 210,388 |  |  | 168,540 |  |  | 161,734 |  |  | 158,619 |  |  | 165,753 |
Stockholders’ equity |  | 1,409,834 |  |  | 1,153,119 |  |  | 1,144,528 |  |  | 1,137,295 |  |  | 1,127,163 |

|  | For the Three Months Ended,
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Selected Operating Data: |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 98,207 |  |  | $ | 77,075 |  |  | $ | 76,887 |  |  | $ | 78,410 |  |  | $ | 76,422 |
Interest expense |  | 18,562 |  |  | 13,721 |  |  | 13,495 |  |  | 13,573 |  |  | 12,034 |
Net interest income |  | 79,645 |  |  | 63,354 |  |  | 63,392 |  |  | 64,837 |  |  | 64,388 |
Credit loss expense |  | 9,969 |  |  | 355 |  |  | 305 |  |  | 356 |  |  | 620 |
Net interest income after credit loss expense |  | 69,676 |  |  | 62,999 |  |  | 63,087 |  |  | 64,481 |  |  | 63,768 |
Other income |  | 13,697 |  |  | 11,231 |  |  | 11,543 |  |  | 9,879 |  |  | 9,512 |
Operating expenses (excluding branch consolidation and merger related expenses) |  | 51,675 |  |  | 43,589 |  |  | 40,884 |  |  | 43,289 |  |  | 41,827 |
Branch consolidation expense |  | 2,594 |  |  | 268 |  |  | 1,696 |  |  | 6,695 |  |  | 391 |
Merger related expenses |  | 8,527 |  |  | 3,742 |  |  | 777 |  |  | 931 |  |  | 5,053 |
Income before provision for income taxes |  | 20,577 |  |  | 26,631 |  |  | 31,273 |  |  | 23,445 |  |  | 26,009 |
Provision for income taxes |  | 4,044 |  |  | 3,181 |  |  | 6,302 |  |  | 4,465 |  |  | 4,836 |
Net income |  | $ | 16,533 |  |  | $ | 23,450 |  |  | $ | 24,971 |  |  | $ | 18,980 |  |  | $ | 21,173 |
Diluted earnings per share |  | $ | 0.27 |  |  | $ | 0.47 |  |  | $ | 0.49 |  |  | $ | 0.37 |  |  | $ | 0.42 |
Net accretion/amortization of purchase accounting adjustments included in net interest income |  | $ | 5,533 |  |  | $ | 3,501 |  |  | $ | 2,769 |  |  | $ | 3,663 |  |  | $ | 4,027 |

15

(continued)

|  | At or For the Three Months Ended
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Selected Financial Ratios and Other Data(1): |  |  |  |  |  |  |  |  |  |
Performance Ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets (2) |  | 0.64 | % |  | 1.14 | % |  | 1.23 | % |  | 0.94 | % |  | 1.10 | %
Return on average tangible assets (2) (3) |  | 0.68 |  |  | 1.19 |  |  | 1.29 |  |  | 0.99 |  |  | 1.15 |
Return on average stockholders’ equity (2) |  | 4.70 |  |  | 8.12 |  |  | 8.66 |  |  | 6.73 |  |  | 7.82 |
Return on average tangible stockholders’ equity (2) (3) |  | 7.50 |  |  | 12.33 |  |  | 13.18 |  |  | 10.32 |  |  | 11.97 |
Stockholders’ equity to total assets |  | 13.44 |  |  | 13.98 |  |  | 14.07 |  |  | 14.16 |  |  | 13.93 |
Tangible stockholders’ equity to tangible assets (3) |  | 8.85 |  |  | 9.71 |  |  | 9.73 |  |  | 9.76 |  |  | 9.53 |
Net interest rate spread |  | 3.29 |  |  | 3.26 |  |  | 3.32 |  |  | 3.45 |  |  | 3.59 |
Net interest margin |  | 3.52 |  |  | 3.48 |  |  | 3.55 |  |  | 3.66 |  |  | 3.78 |
Operating expenses to average assets (2) |  | 2.44 |  |  | 2.31 |  |  | 2.13 |  |  | 2.53 |  |  | 2.45 |
Efficiency ratio (2) (4) |  | 67.28 |  |  | 63.82 |  |  | 57.86 |  |  | 68.14 |  |  | 63.97 |
Loans to deposits |  | 100.27 |  |  | 98.09 |  |  | 97.77 |  |  | 96.06 |  |  | 94.89 |

16

(continued)

|  | At or For the Three Months Ended
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Trust and Asset Management: |  |  |  |  |  |  |  |  |  |
Wealth assets under administration |  | $ | 173,856 |  |  | $ | 195,415 |  |  | $ | 194,137 |  |  | $ | 199,554 |  |  | $ | 200,130 |
Nest Egg |  | 43,528 |  |  | 34,865 |  |  | 23,946 |  |  | 9,755 |  |  | 4,052 |
Per Share Data: |  |  |  |  |  |  |  |  |  |
Cash dividends per common share |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |  |  | $ | 0.17 |
Stockholders’ equity per common share at end of period |  | 23.38 |  |  | 22.88 |  |  | 22.57 |  |  | 22.24 |  |  | 22.00 |
Tangible stockholders’ equity per common share at end of period (3) |  | 14.62 |  |  | 15.13 |  |  | 14.86 |  |  | 14.57 |  |  | 14.32 |
Common shares outstanding at end of period |  | 60,311,717 |  |  | 50,405,048 |  |  | 50,700,586 |  |  | 51,131,804 |  |  | 51,233,944 |
Number of full-service customer facilities: |  | 75 |  |  | 56 |  |  | 56 |  |  | 60 |  |  | 63 |
Quarterly Average Balances |  |  |  |  |  |  |  |  |  |
Total securities |  | $ | 1,186,535 |  |  | $ | 1,008,461 |  |  | $ | 1,039,560 |  |  | $ | 1,080,690 |  |  | $ | 1,067,150 |
Loans receivable, net |  | 7,850,662 |  |  | 6,162,808 |  |  | 6,008,325 |  |  | 5,948,312 |  |  | 5,767,887 |
Total interest-earning assets |  | 9,100,923 |  |  | 7,214,764 |  |  | 7,088,817 |  |  | 7,096,216 |  |  | 6,914,948 |
Total assets |  | 10,332,809 |  |  | 8,192,177 |  |  | 8,073,238 |  |  | 8,068,899 |  |  | 7,839,316 |
Interest-bearing transaction deposits |  | 4,825,193 |  |  | 4,053,226 |  |  | 3,971,380 |  |  | 4,051,539 |  |  | 4,036,584 |
Time deposits |  | 1,459,348 |  |  | 931,228 |  |  | 920,032 |  |  | 934,470 |  |  | 932,341 |
Total borrowed funds |  | 832,285 |  |  | 577,042 |  |  | 552,998 |  |  | 566,785 |  |  | 504,498 |
Total interest-bearing liabilities |  | 7,116,826 |  |  | 5,561,496 |  |  | 5,444,410 |  |  | 5,552,794 |  |  | 5,473,423 |
Non-interest bearing deposits |  | 1,687,582 |  |  | 1,393,002 |  |  | 1,396,259 |  |  | 1,302,147 |  |  | 1,211,934 |
Stockholders’ equity |  | 1,414,924 |  |  | 1,145,665 |  |  | 1,143,701 |  |  | 1,131,165 |  |  | 1,097,984 |
Total deposits |  | 7,972,123 |  |  | 6,377,456 |  |  | 6,287,671 |  |  | 6,288,156 |  |  | 6,180,859 |
Quarterly Yields |  |  |  |  |  |  |  |  |  |
Total securities |  | 2.68 | % |  | 2.59 | % |  | 2.64 | % |  | 2.64 | % |  | 2.64 | %
Loans receivable, net |  | 4.61 |  |  | 4.53 |  |  | 4.60 |  |  | 4.78 |  |  | 4.85 |
Total interest-earning assets |  | 4.34 |  |  | 4.24 |  |  | 4.30 |  |  | 4.43 |  |  | 4.48 |
Interest-bearing transaction deposits |  | 0.64 |  |  | 0.59 |  |  | 0.58 |  |  | 0.58 |  |  | 0.52 |
Time deposits |  | 1.71 |  |  | 1.78 |  |  | 1.72 |  |  | 1.66 |  |  | 1.50 |
Borrowed funds |  | 2.24 |  |  | 2.41 |  |  | 2.64 |  |  | 2.70 |  |  | 2.73 |
Total interest-bearing liabilities |  | 1.05 |  |  | 0.98 |  |  | 0.98 |  |  | 0.98 |  |  | 0.89 |
Net interest spread |  | 3.29 |  |  | 3.26 |  |  | 3.32 |  |  | 3.45 |  |  | 3.59 |
Net interest margin |  | 3.52 |  |  | 3.48 |  |  | 3.55 |  |  | 3.66 |  |  | 3.78 |
Total deposits |  | 0.70 |  |  | 0.64 |  |  | 0.62 |  |  | 0.62 |  |  | 0.57 |

(1) | With the exception of end of quarter ratios, all ratios are based on average daily balances.

(2) | Performance ratios for each period include merger related expenses, branch consolidation expenses, opening credit loss expense, non-recurring professional fees, compensation expense due to the retirement of an executive officer, the reduction in income tax expense from the revaluation of state deferred tax assets as a result of a change in the New Jersey tax code. Refer to Other Items - Non-GAAP Reconciliation for impact of these items.

(3) | Tangible stockholders’ 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.

17

OceanFirst Financial Corp.
OTHER ITEMS
(dollars in thousands, except per share amounts)
NON-GAAP RECONCILIATION

|  | For the Three Months Ended
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Core earnings: |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 16,533 |  |  | $ | 23,450 |  |  | $ | 24,971 |  |  | $ | 18,980 |  |  | $ | 21,173 |
Non-recurring items: |  |  |  |  |  |  |  |  |  |
Add: Merger related expenses |  | 8,527 |  |  | 3,742 |  |  | 777 |  |  | 931 |  |  | 5,053 |
Branch consolidation expenses |  | 2,594 |  |  | 268 |  |  | 1,696 |  |  | 6,695 |  |  | 391 |
Two River & Country Bank opening credit loss expense under the CECL model |  | 2,447 |  |  | — |  |  | — |  |  | — |  |  | — |
Non-recurring professional fees |  | — |  |  | 1,274 |  |  | 750 |  |  | — |  |  | — |
Compensation expense due to the retirement of an executive officer |  | — |  |  | — |  |  | — |  |  | 1,256 |  |  | — |
Income tax benefit related to change in New Jersey tax code |  | — |  |  | (2,205 | ) |  | — |  |  | — |  |  | — |
Less: Income tax expense on items |  | (3,121 | ) |  | (793 | ) |  | (663 | ) |  | (1,867 | ) |  | (1,039 | )
Core earnings |  | $ | 26,980 |  |  | $ | 25,736 |  |  | $ | 27,531 |  |  | $ | 25,995 |  |  | $ | 25,578 |
Core diluted earnings per share |  | $ | 0.45 |  |  | $ | 0.51 |  |  | $ | 0.54 |  |  | $ | 0.51 |  |  | $ | 0.51 |
Core ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 1.05 | % |  | 1.25 | % |  | 1.35 | % |  | 1.29 | % |  | 1.32 | %
Return on average tangible assets |  | 1.11 |  |  | 1.31 |  |  | 1.42 |  |  | 1.36 |  |  | 1.39 |
Return on average tangible stockholders’ equity |  | 12.25 |  |  | 13.53 |  |  | 14.53 |  |  | 14.14 |  |  | 14.46 |
Efficiency ratio |  | 55.36 |  |  | 56.73 |  |  | 53.56 |  |  | 56.26 |  |  | 56.60 |

18

(continued)
COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS

|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2020 |  | 2019 |  | 2019 |  | 2019 |  | 2019
Total stockholders’ equity |  | $ | 1,409,834 |  |  | $ | 1,153,119 |  |  | $ | 1,144,528 |  |  | $ | 1,137,295 |  |  | $ | 1,127,163 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,093 |  |  | 374,632 |  |  | 374,537 |  |  | 374,592 |  |  | 375,096 |
Core deposit intangible |  | 28,276 |  |  | 15,607 |  |  | 16,605 |  |  | 17,614 |  |  | 18,629 |
Tangible stockholders’ equity |  | $ | 881,465 |  |  | $ | 762,880 |  |  | $ | 753,386 |  |  | $ | 745,089 |  |  | $ | 733,438 |
Total assets |  | $ | 10,489,074 |  |  | $ | 8,246,145 |  |  | $ | 8,135,173 |  |  | $ | 8,029,057 |  |  | $ | 8,092,948 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,093 |  |  | 374,632 |  |  | 374,537 |  |  | 374,592 |  |  | 375,096 |
Core deposit intangible |  | 28,276 |  |  | 15,607 |  |  | 16,605 |  |  | 17,614 |  |  | 18,629 |
Tangible assets |  | $ | 9,960,705 |  |  | $ | 7,855,906 |  |  | $ | 7,744,031 |  |  | $ | 7,636,851 |  |  | $ | 7,699,223 |
Tangible stockholders’ equity to tangible assets |  | 8.85 | % |  | 9.71 | % |  | 9.73 | % |  | 9.76 | % |  | 9.53 | %

19

(continued)
ACQUISITION DATE - FAIR VALUE BALANCE SHEET
The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Capital Bank, net of the total consideration paid (in thousands):

| At January 31, 2019
| Capital Bank Book Value |  | Purchase Accounting Adjustments |  | Fair Value
Total Purchase Price: |  |  |  |  | $ | 76,834 |
Assets acquired: |  |  |  |  |
Cash and cash equivalents | $ | 59,748 |  |  | $ | — |  |  | $ | 59,748 |
Securities | 103,798 |  |  | (23 | ) |  | 103,775 |
Loans | 312,320 |  |  | (5,020 | ) |  | 307,300 |
Accrued interest receivable | 1,387 |  |  | 3 |  |  | 1,390 |
Bank Owned Life Insurance | 10,460 |  |  | — |  |  | 10,460 |
Deferred tax asset | 1,605 |  |  | 2,496 |  |  | 4,101 |
Other assets | 9,384 |  |  | (4,404 | ) |  | 4,980 |
Core deposit intangible | — |  |  | 2,662 |  |  | 2,662 |
Total assets acquired | 498,702 |  |  | (4,286 | ) |  | 494,416 |
Liabilities assumed: |  |  |  |  |
Deposits | (448,792 | ) |  | (226 | ) |  | (449,018 | )
Other liabilities | (827 | ) |  | (4,383 | ) |  | (5,210 | )
Total liabilities assumed | (449,619 | ) |  | (4,609 | ) |  | (454,228 | )
Net assets acquired | $ | 49,083 |  |  | $ | (8,895 | ) |  | $ | 40,188 |
Goodwill recorded in the merger |  |  |  |  | $ | 36,646 |

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. On January 31, 2020, the Company finalized its review of the acquired assets and liabilities and will not be recording any further adjustments to the carrying value.
20

(continued)
The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Two River, net of the total consideration paid (in thousands):

| At January 1, 2020
| Two River Book Value |  | Purchase Accounting Adjustments |  | Estimated Fair Value
Total Purchase Price: |  |  |  |  | $ | 197,050 |
Assets acquired: |  |  |  |  |
Cash and cash equivalents | $ | 51,102 |  |  | $ | — |  |  | $ | 51,102 |
Securities | 62,832 |  |  | 1,549 |  |  | 64,381 |
Loans | 940,885 |  |  | (49 | ) |  | 940,836 |
Accrued interest receivable | 2,382 |  |  | — |  |  | 2,382 |
Bank Owned Life Insurance | 22,440 |  |  | — |  |  | 22,440 |
Deferred tax asset | 5,201 |  |  | (1,850 | ) |  | 3,351 |
Other assets | 18,662 |  |  | (2,700 | ) |  | 15,962 |
Core deposit intangible | — |  |  | 12,130 |  |  | 12,130 |
Total assets acquired | 1,103,504 |  |  | 9,080 |  |  | 1,112,584 |
Liabilities assumed: |  |  |  |  |
Deposits | (939,132 | ) |  | (2,618 | ) |  | (941,750 | )
Other liabilities | (58,935 | ) |  | (21 | ) |  | (58,956 | )
Total liabilities assumed | (998,067 | ) |  | (2,639 | ) |  | (1,000,706 | )
Net assets acquired | $ | 105,437 |  |  | $ | 6,441 |  |  | $ | 111,878 |
Goodwill recorded in the merger |  |  |  |  | $ | 85,172 |

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to recorded carrying values may be required.
21

(continued)
The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Country Bank, net of the total consideration paid (in thousands):

| At January 1, 2020
| Country Bank Book Value |  | Purchase Accounting Adjustments |  | Estimated Fair Value
Total Purchase Price: |  |  |  |  | $ | 112,836 |
Assets acquired: |  |  |  |  |
Cash and cash equivalents | $ | 20,799 |  |  | $ | — |  |  | $ | 20,799 |
Securities | 144,460 |  |  | 39 |  |  | 144,499 |
Loans | 614,285 |  |  | 4,376 |  |  | 618,661 |
Accrued interest receivable | 1,779 |  |  | — |  |  | 1,779 |
Bank Owned Life Insurance | — |  |  | — |  |  | — |
Deferred tax asset | (3,254 | ) |  | (897 | ) |  | (4,151 | )
Other assets | 10,327 |  |  | (1,134 | ) |  | 9,193 |
Core deposit intangible | — |  |  | 2,117 |  |  | 2,117 |
Total assets acquired | 788,396 |  |  | 4,501 |  |  | 792,897 |
Liabilities assumed: |  |  |  |  |
Deposits | (649,399 | ) |  | (3,254 | ) |  | (652,653 | )
Other liabilities | (69,244 | ) |  | 1,980 |  |  | (67,264 | )
Total liabilities assumed | (718,643 | ) |  | (1,274 | ) |  | (719,917 | )
Net assets acquired | $ | 69,753 |  |  | $ | 3,227 |  |  | $ | 72,980 |
Goodwill recorded in the merger |  |  |  |  | $ | 39,856 |

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to recorded carrying values may be required.
22