EX-99.1 2 ex991-earningsreleasemarch.htm EX-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
FINANCIAL RESULTS
RED BANK, NEW JERSEY, April 29, 2021…OceanFirst Financial Corp. (NASDAQ:“OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), today announced that net income available to common stockholders was $31.7 million, or $0.53 per diluted share, for the quarter ended March 31, 2021 as compared to $16.5 million, or $0.27 per diluted share, for the corresponding prior year period. The current quarter results benefited from the modest release of credit loss expense and improved levels of core operating expenses, which resulted in return on average assets of 1.12%, return on average tangible stockholders’ equity of 13.22%, and efficiency ratio of 54.73%, as compared to 0.64%, 7.50%, and 67.28%, respectively, in the prior year period.
Core earnings for the quarter ended March 31, 2021 amounted to $26.5 million, or $0.44 per diluted share. Core return on average assets, core return on average tangible stockholders’ equity, and core efficiency ratio were 0.94%, 11.04%, and 58.37%, respectively, for the quarter ended March 31, 2021. Core earnings is a non-GAAP (“generally accepted accounting principles”) measure. For the periods presented they exclude merger related expenses, branch consolidation expenses, net (gain) loss on equity investments, Federal Home Loan Bank (“FHLB”) advance prepayment fees, gain on sale of

Paycheck Protection Program (“PPP”) loans, the opening credit loss expense under the Current Expected Credit Loss (“CECL”) model related to the acquisitions of Two River Bancorp (“Two River”) and Country Bank Holding Company, Inc. (“Country Bank”) (collectively referred to as “non-core” operations). Non-core operations had a favorable impact of $5.2 million, net of tax, for the quarter ended March 31, 2021. Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” table for additional information regarding our non-GAAP measures and impact per period by operation.
Key developments for the recent quarter are described below:
•Loan and Deposit Growth: Total loan growth for the quarter was $116.4 million, reflecting record loan originations of $747.8 million. Deposits increased $75.2 million, as compared to the prior linked quarter.
•Operations: The Company continues to expand its commercial banking activities with the hiring of nine commercial bankers. The additional lenders are expected to help fuel organic loan growth throughout the remainder of the year. Additionally, the Company consolidated four branches in April 2021 bringing the total number of branches consolidated to 57 over the past five years. These consolidations will increase the average branch size to $164 million and will help further offset operating expenses in the second quarter.
•Net Interest Margin: Net interest margin for the quarter was 2.93%, as compared to 2.97% in the prior linked quarter. Excluding purchase accounting accretion and prepayment fees, net interest margin expanded four basis points, to 2.75% in the current quarter, from 2.71% in the prior linked quarter, driven by a decrease in the cost of deposits to 0.37% from 0.45%, respectively.
“Strong first quarter results continued our earnings momentum through decreased expenses, core margin expansion, record loan originations, and strong deposit growth. The Bank’s credit risk
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indicators demonstrated strong asset quality while broader economic indicators are strengthening; the combination of which supported a modest negative credit provision,” said Chairman and Chief Executive Officer, Christopher D. Maher about the Company’s results. Mr. Maher added, “We remain focused on organic loan production, and the continued additions of experienced commercial bankers to drive our growth initiatives.” Mr. Maher also remarked on the COVID-19 pandemic, "We are so appreciative of our employees who for over a year have continued to persevere through the unprecedented times of the pandemic and provide uninterrupted essential banking services to our customers. While we are encouraged by progress with vaccine distribution and transmission trends in many communities, we know this is not behind us and we must remain vigilant in our efforts as our customers and neighbors continue to count on us.”
The Company’s Board of Directors declared its ninety-seventh consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.17 per share will be paid on May 21, 2021 to common stockholders of record on May 10, 2021. The Board previously declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 17, 2021 to preferred stockholders of record on April 30, 2021.
Results of Operations
Net income was favorably impacted by $5.2 million, net of tax, and adversely impacted by $10.4 million, net of tax, of non-core operations for the quarters ended March 31, 2021 and 2020, respectively. Core earnings for the quarter ended March 31, 2021 were $26.5 million, or $0.44 per diluted share, a decrease from core earnings of $27.0 million, or $0.45 per diluted share for the corresponding prior year period. Core earnings for quarter ended March 31, 2021 increased from $23.2 million, or $0.39 per diluted share for the prior linked quarter.
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Net Interest Income and Margin
Net interest income for the quarter ended March 31, 2021 decreased to $73.6 million, as compared to $79.6 million for the same prior year period, reflecting a reduction in net interest margin, partly offset by an increase in interest-earning assets. Average interest-earning assets increased by $1.08 billion for the quarter ended March 31, 2021, as compared to the same prior year period, primarily concentrated in interest-earning deposits. Average loans receivable, net of allowance for loan credit losses, decreased by $120.9 million for the quarter ended March 31, 2021, as compared to the same prior year period. Net interest margin for the quarter ended March 31, 2021 decreased to 2.93% from 3.52% for the same prior year period. The net interest margin compression was primarily due to the excess balance sheet liquidity, driven by a strategic decision to accumulate liquidity entering the economic downturn, the lower interest rate environment, and to a lesser extent, the origination of low-yielding PPP loans. For the quarter ended March 31, 2021, the cost of average interest-bearing liabilities decreased to 0.60%, from 1.05% for the corresponding prior year period. The total cost of deposits (including non-interest bearing deposits) was 0.37% for the quarter ended March 31, 2021, compared to 0.70% for the same prior year period.
Net interest income for the quarter ended March 31, 2021 decreased by $4.2 million, as compared to the prior linked quarter, while the net interest margin decreased to 2.93%, compared to 2.97%. Excluding the impact of purchase accounting accretion and prepayment fees, the net interest margin increased to 2.75% from 2.71%. The yield on average interest-earning assets decreased to 3.38% from 3.53% in the prior linked quarter, primarily due to lower purchase accounting accretion and a reduction in average loans receivable, net. The total cost of interest-bearing liabilities was 0.60% for the quarter ended March 31, 2021, as compared to 0.74% for the quarter ended December 31, 2020, due to lower deposit costs and the repayment of all FHLB advances in the prior quarter.
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Benefit/Provision for Credit Losses
For the quarter ended March 31, 2021, the benefit for credit loss expense was $620,000, as compared to a provision for credit loss expense of $10.0 million for the corresponding prior year period, and $4.1 million in the prior linked quarter. The benefit for credit loss expense for the quarter was significantly influenced by an improved economic outlook with expectations for strong GDP growth and improved employment levels.
Net loan recoveries were $280,000 for the quarter ended March 31, 2021, as compared to net loan charge-offs of $1.2 million for the corresponding prior year period, and $2.9 million for the prior linked quarter. Non-performing loans totaled $34.1 million at March 31, 2021, as compared to $36.4 million at December 31, 2020 and $16.3 million at March 31, 2020.
Non-interest Income
For the quarter ended March 31, 2021, other income increased to $20.8 million, as compared to $13.7 million for the corresponding prior year period. Other income for the quarter ended March 31, 2021 included $8.3 million of net gain on equity investments related to non-core operations. The net gain on equity investments was primarily a result of several programs implemented by the Company in 2020 to invest excess liquidity in high quality equity securities with attractive dividend yields which were sold in January 2021. Excluding this item, the decrease in other income for the quarter ended March 31, 2021, as compared to the corresponding prior year period, was primarily due to decreases in commercial loan swap income of $2.9 million and fees and service charges of $1.1 million, partially offset by an increase in gain on sale of loans of $1.7 million, and referral fees of $662,000 related to the origination of PPP loans.
Excluding the non-core operations, other income for the quarter ended March 31, 2021, increased $1.5 million, as compared to the prior linked quarter, primarily due to increases in commercial loan swap income of $1.0 million, gain on sale of loans of $669,000, and the referral fees on PPP loans of $662,000.
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Non-interest Expense
Operating expenses decreased to $51.7 million for the quarter ended March 31, 2021, as compared to $62.8 million in the same prior year period. Operating expenses for the quarter ended March 31, 2021 included $1.4 million of expenses related to non-core operations, as compared to $11.1 million in the same prior year period. Excluding the impact of non-core operations, the $1.4 million decrease in operating expenses for the quarter ended March 31, 2021 was primarily due to decreases in compensation and benefits expense of $1.5 million and occupancy and equipment of $580,000, partially offset by an increase in federal deposit insurance expense of $1.2 million.
Excluding expenses related to non-core operations, operating expenses for the quarter ended March 31, 2021, decreased $2.8 million, as compared to the prior linked quarter. The change was due to decreases in professional fees of $1.1 million and data processing expense of $593,000.
Income Tax Expense
The provision for income taxes was $10.7 million for the quarter ended March 31, 2021, as compared to $4.0 million for the same prior year period, and $10.4 million for the prior linked quarter. The effective tax rate was 24.6% for the quarter ended March 31, 2021, as compared to 19.7% for the same prior year period, and 24.0% for the prior linked quarter. The higher effective tax rate for the current year period, as compared to the prior year period, is primarily due to the impact of a New Jersey tax code change and a higher allocation of taxable income to New York.
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Financial Condition
Total assets increased $129.2 million, to $11.58 billion at March 31, 2021, from $11.45 billion at December 31, 2020. Cash and due from banks decreased $98.5 million, to $1.17 billion at March 31, 2021, from $1.27 billion at December 31, 2020. Total debt securities increased by $230.3 million at March 31, 2021, as compared to December 31, 2020, which was partly offset by a decrease in equity investments of $56.9 million due to sales. Loans receivable, net of allowance for loan credit losses, increased by $115.7 million, to $7.82 billion at March 31, 2021, from $7.70 billion at December 31, 2020.
Deposits increased $75.2 million, to $9.50 billion at March 31, 2021, from $9.43 billion at December 31, 2020. The loan-to-deposit ratio at March 31, 2021 was 82.8%, as compared to 82.3% at December 31, 2020.
Stockholders’ equity increased to $1.50 billion at March 31, 2021, as compared to $1.48 billion at December 31, 2020. For the quarter ended March 31, 2021, the Company repurchased 500,000 shares under its stock repurchase program at a weighted average cost of $19.94, and there were 1.5 million shares available for repurchase at March 31, 2021 under the existing repurchase program. Tangible common equity per common share increased to $15.26 at March 31, 2021, as compared to $14.98 at December 31, 2020.
Asset Quality
The Company’s non-performing loans decreased to $34.1 million at March 31, 2021, as compared to $36.4 million at December 31, 2020. Non-performing loans do not include $44.4 million of purchased with credit deterioration (“PCD”) loans from prior bank acquisitions.
The Company’s allowance for loan credit losses was 0.76% of total loans at March 31, 2021 as compared to 0.78% at December 31, 2020. The allowance for loan credit losses does not reflect the net unamortized credit and PCD marks of $25.7 million. The allowance for loan credit losses plus the
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unamortized credit and PCD marks amounted to $85.7 million, or 1.09% of loans. The allowance for loan credit losses as a percentage of non-performing loans was 175.7% at March 31, 2021, as compared to 166.8% at December 31, 2020.
Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations, 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. Refer to the 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 30, 2021 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, dia l (877) 344-7529, Replay Conference Number 10153816 from one hour after the end of the call until July 29, 2021. 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 $11.6 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: the impact of the COVID-19 pandemic on our operations and financial results and those of our customers, 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, 2020, 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, 2021 |  | December 31, 2020 |  |  |  | March 31, 2020
|  | (Unaudited) |  |  |  |  |  | (Unaudited)
Assets |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 1,173,665 |  |  | $ | 1,272,134 |  |  |  |  | $ | 256,470 |
Debt securities available-for-sale, at estimated fair value |  | 268,511 |  |  | 183,302 |  |  |  |  | 153,738 |
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,717 at March 31, 2021, $1,715 at December 31, 2020 and $2,529 at March 31, 2020 (estimated fair value of $1,099,745 at March 31, 2021, $968,466 at December 31, 2020 and $928,582 at March 31, 2020) |  | 1,082,326 |  |  | 937,253 |  |  |  |  | 914,255 |
Equity investments, at estimated fair value |  | 50,159 |  |  | 107,079 |  |  |  |  | 14,409 |
Restricted equity investments, at cost |  | 52,199 |  |  | 51,705 |  |  |  |  | 81,005 |
Loans receivable, net of allowance for loan credit losses of $59,976 at March 31, 2021, $60,735 at December 31, 2020 and $29,635 at March 31, 2020 |  | 7,820,590 |  |  | 7,704,857 |  |  |  |  | 7,913,541 |
Loans held-for-sale |  | 43,175 |  |  | 45,524 |  |  |  |  | 17,782 |
Interest and dividends receivable |  | 32,819 |  |  | 35,269 |  |  |  |  | 27,930 |
Other real estate owned |  | 106 |  |  | 106 |  |  |  |  | 484 |
Premises and equipment, net |  | 110,093 |  |  | 107,094 |  |  |  |  | 104,560 |
Bank owned life insurance |  | 264,548 |  |  | 265,253 |  |  |  |  | 261,270 |
Assets held for sale |  | 5,340 |  |  | 5,782 |  |  |  |  | 3,785 |
Goodwill |  | 500,319 |  |  | 500,319 |  |  |  |  | 500,093 |
Core deposit intangible |  | 22,273 |  |  | 23,668 |  |  |  |  | 28,276 |
Other assets |  | 151,349 |  |  | 208,968 |  |  |  |  | 211,476 |
Total assets |  | $ | 11,577,472 |  |  | $ | 11,448,313 |  |  |  |  | $ | 10,489,074 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |
Deposits |  | $ | 9,502,812 |  |  | $ | 9,427,616 |  |  |  |  | $ | 7,892,067 |
Federal Home Loan Bank advances |  | — |  |  | — |  |  |  |  | 825,824 |
Securities sold under agreements to repurchase with retail customers |  | 134,465 |  |  | 128,454 |  |  |  |  | 90,175 |
Other borrowings |  | 228,176 |  |  | 235,471 |  |  |  |  | 120,213 |
Advances by borrowers for taxes and insurance |  | 20,980 |  |  | 17,296 |  |  |  |  | 24,931 |
Other liabilities |  | 192,320 |  |  | 155,346 |  |  |  |  | 126,030 |
Total liabilities |  | 10,078,753 |  |  | 9,964,183 |  |  |  |  | 9,079,240 |
Total stockholders’ equity |  | 1,498,719 |  |  | 1,484,130 |  |  |  |  | 1,409,834 |
Total liabilities and stockholders’ equity |  | $ | 11,577,472 |  |  | $ | 11,448,313 |  |  |  |  | $ | 10,489,074 |

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

|  | For the Three Months Ended, |  |
|  | March 31, 2021 |  | December 31, 2020 |  | March 31, 2020 |  |  |  |
|  | |-------------------- (Unaudited) --------------------| |  |
Interest income: |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 77,908 |  |  | $ | 84,997 |  |  | $ | 89,944 |  |  |  |  |
Debt securities |  | 5,355 |  |  | 5,539 |  |  | 6,772 |  |  |  |  |
Equity investments and other |  | 1,611 |  |  | 2,026 |  |  | 1,491 |  |  |  |  |
Total interest income |  | 84,874 |  |  | 92,562 |  |  | 98,207 |  |  |  |  |
Interest expense: |  |  |  |  |  |  |  |  |  |
Deposits |  | 8,496 |  |  | 10,679 |  |  | 13,936 |  |  |  |  |
Borrowed funds |  | 2,774 |  |  | 4,032 |  |  | 4,626 |  |  |  |  |
Total interest expense |  | 11,270 |  |  | 14,711 |  |  | 18,562 |  |  |  |  |
Net interest income |  | 73,604 |  |  | 77,851 |  |  | 79,645 |  |  |  |  |
Credit loss (benefit) expense |  | (620) |  |  | 4,072 |  |  | 9,969 |  |  |  |  |
Net interest income after credit loss (benefit) expense |  | 74,224 |  |  | 73,779 |  |  | 69,676 |  |  |  |  |
Other income: |  |  |  |  |  |  |  |  |  |
Bankcard services revenue |  | 3,052 |  |  | 3,098 |  |  | 2,481 |  |  |  |  |
Trust and asset management revenue |  | 599 |  |  | 492 |  |  | 515 |  |  |  |  |
Fees and service charges |  | 3,737 |  |  | 3,950 |  |  | 4,873 |  |  |  |  |
Net gain on sales of loans |  | 1,916 |  |  | 6,348 |  |  | 173 |  |  |  |  |
Net gain on equity investments |  | 8,287 |  |  | 24,487 |  |  | 155 |  |  |  |  |
Net (loss) gain from other real estate operations |  | (8) |  |  | 23 |  |  | (150) |  |  |  |  |
Income from bank owned life insurance |  | 1,415 |  |  | 1,798 |  |  | 1,575 |  |  |  |  |
Commercial loan swap income |  | 1,111 |  |  | 116 |  |  | 4,050 |  |  |  |  |
Other |  | 726 |  |  | 308 |  |  | 25 |  |  |  |  |
Total other income |  | 20,835 |  |  | 40,620 |  |  | 13,697 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |
Compensation and employee benefits |  | 28,366 |  |  | 27,323 |  |  | 29,885 |  |  |  |  |
Occupancy |  | 5,061 |  |  | 4,968 |  |  | 5,276 |  |  |  |  |
Equipment |  | 1,578 |  |  | 1,938 |  |  | 1,943 |  |  |  |  |
Marketing |  | 434 |  |  | 632 |  |  | 769 |  |  |  |  |
Federal deposit insurance and regulatory assessments |  | 1,864 |  |  | 1,859 |  |  | 667 |  |  |  |  |
Data processing |  | 4,031 |  |  | 4,624 |  |  | 4,177 |  |  |  |  |
Check card processing |  | 1,372 |  |  | 1,507 |  |  | 1,276 |  |  |  |  |
Professional fees |  | 2,837 |  |  | 3,908 |  |  | 2,302 |  |  |  |  |
Other operating expense |  | 3,353 |  |  | 4,768 |  |  | 3,802 |  |  |  |  |
FHLB advance prepayment fees |  | — |  |  | 13,333 |  |  | — |  |  |  |  |
Amortization of core deposit intangible |  | 1,395 |  |  | 1,526 |  |  | 1,578 |  |  |  |  |
Branch consolidation expense |  | 1,011 |  |  | 3,336 |  |  | 2,594 |  |  |  |  |
Merger related expenses |  | 381 |  |  | 1,194 |  |  | 8,527 |  |  |  |  |
Total operating expenses |  | 51,683 |  |  | 70,916 |  |  | 62,796 |  |  |  |  |
Income before provision for income taxes |  | 43,376 |  |  | 43,483 |  |  | 20,577 |  |  |  |  |
Provision for income taxes |  | 10,679 |  |  | 10,419 |  |  | 4,044 |  |  |  |  |
Net income |  | 32,697 |  |  | 33,064 |  |  | 16,533 |  |  |  |  |
Dividends on preferred shares |  | 1,004 |  |  | 1,004 |  |  | — |  |  |  |  |
Net income available to common stockholders |  | $ | 31,693 |  |  | $ | 32,060 |  |  | $ | 16,533 |  |  |  |  |
Basic earnings per share |  | $ | 0.53 |  |  | $ | 0.53 |  |  | $ | 0.28 |  |  |  |  |
Diluted earnings per share |  | $ | 0.53 |  |  | $ | 0.54 |  |  | $ | 0.27 |  |  |  |  |
Average basic shares outstanding |  | 59,840 |  |  | 59,961 |  |  | 59,876 |  |  |  |  |
Average diluted shares outstanding |  | 60,101 |  |  | 60,057 |  |  | 60,479 |  |  |  |  |

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

LOANS RECEIVABLE |  |  | At
|  |  | March 31, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | June 30, 2020 |  | March 31, 2020
Commercial: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | $ | 498,245 |  |  | $ | 470,656 |  |  | $ | 599,188 |  |  | $ | 910,762 |  |  | $ | 502,760 |
Commercial real estate - owner-occupied |  | 1,066,351 |  |  | 1,145,065 |  |  | 1,176,529 |  |  | 1,199,742 |  |  | 1,220,983 |
Commercial real estate - investor |  | 3,804,351 |  |  | 3,491,464 |  |  | 3,453,276 |  |  | 3,449,160 |  |  | 3,331,662 |
Total commercial |  |  | 5,368,947 |  |  | 5,107,185 |  |  | 5,228,993 |  |  | 5,559,664 |  |  | 5,055,405 |
Consumer: |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  | 2,189,348 |  |  | 2,309,459 |  |  | 2,407,178 |  |  | 2,426,277 |  |  | 2,458,641 |
Home equity loans and lines |  |  | 267,591 |  |  | 285,016 |  |  | 301,712 |  |  | 320,627 |  |  | 335,624 |
Other consumer |  |  | 46,651 |  |  | 54,446 |  |  | 63,095 |  |  | 71,721 |  |  | 82,920 |
Total consumer |  |  | 2,503,590 |  |  | 2,648,921 |  |  | 2,771,985 |  |  | 2,818,625 |  |  | 2,877,185 |
Total loans |  |  | 7,872,537 |  |  | 7,756,106 |  |  | 8,000,978 |  |  | 8,378,289 |  |  | 7,932,590 |
Deferred origination costs (fees), net |  | 8,029 |  |  | 9,486 |  |  | (1,238) |  |  | (4,300) |  |  | 10,586 |
Allowance for loan credit losses |  |  | (59,976) |  |  | (60,735) |  |  | (56,350) |  |  | (38,509) |  |  | (29,635) |
Loans receivable, net |  |  | $ | 7,820,590 |  |  | $ | 7,704,857 |  |  | $ | 7,943,390 |  |  | $ | 8,335,480 |  |  | $ | 7,913,541 |
Mortgage loans serviced for others |  | $ | 74,037 |  |  | $ | 95,789 |  |  | $ | 88,210 |  |  | $ | 101,840 |  |  | $ | 51,399 |
| At March 31, 2021 Average Yield |  |  |  |  |  |  |  |  |  |
Loan pipeline (1): |  |  |  |  |  |  |  |  |  |  |
Commercial | 3.76 | % |  | $ | 154,946 |  |  | $ | 210,024 |  |  | $ | 154,700 |  |  | $ | 169,093 |  |  | $ | 293,820 |
Residential real estate | 3.15 |  |  | 178,352 |  |  | 151,152 |  |  | 212,107 |  |  | 181,800 |  |  | 223,032 |
Home equity loans and lines | 3.96 |  |  | 11,031 |  |  | 6,630 |  |  | 10,301 |  |  | 8,282 |  |  | 8,429 |
Total | 3.45 | % |  | $ | 344,329 |  |  | $ | 367,806 |  |  | $ | 377,108 |  |  | $ | 359,175 |  |  | $ | 525,281 |

| For the Three Months Ended |
| March 31, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | June 30, 2020 |  | March 31, 2020 |
| Average Yield |  |  |  |  |  |  |  |  |  |  |
Loan originations: |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 3.21 | % |  | $ | 547,591 |  | (2) | $ | 173,715 |  |  | $ | 187,747 |  |  | $ | 216,979 |  | (2) | $ | 266,882 |  |
Residential real estate | 3.10 |  |  | 189,942 |  |  | 222,780 |  |  | 219,325 |  |  | 242,137 |  |  | 148,675 |  |
Home equity loans and lines | 4.14 |  |  | 10,278 |  |  | 13,435 |  |  | 10,966 |  |  | 12,128 |  |  | 10,666 |  |
Total | 3.20 | % |  | $ | 747,811 |  |  | $ | 409,930 |  |  | $ | 418,038 |  |  | $ | 471,244 |  |  | $ | 426,223 |  |
Loans sold |  |  | $ | 67,500 |  |  | $ | 56,126 |  | (3) | $ | 56,722 |  |  | $ | 104,600 |  | (3) | $ | 7,500 |  | (3)

(1)Loan pipeline includes loans approved but not funded.
(2)Excludes loans originated through the PPP o f $60 million a nd $504 million for the three months ended March 31, 2021 and June 30, 2020, respectively.
(3)Excludes the sale of PPP loans of $298.1 million, higher risk commercial loans of $64.8 million, net of charge-offs and under-performing residential and home equity loans and lines of $10.5 million, net of charge-offs, for the three months ended December 31, 2020, the sale of under-performing commercial loans of $4.9 million for the three months ended June 30, 2020, and 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.

DEPOSITS | At
| March 31, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | June 30, 2020 |  | March 31, 2020
Type of Account |  |  |  |  |  |  |  |  |
Non-interest-bearing | $ | 2,417,935 |  |  | $ | 2,133,195 |  |  | $ | 2,240,799 |  |  | $ | 2,161,766 |  |  | $ | 1,783,216 |
Interest-bearing checking | 3,623,132 |  |  | 3,646,866 |  |  | 3,317,296 |  |  | 3,022,887 |  |  | 2,647,487 |
Money market deposit | 782,459 |  |  | 783,521 |  |  | 691,872 |  |  | 680,199 |  |  | 620,145 |
Savings | 1,568,528 |  |  | 1,491,251 |  |  | 1,471,554 |  |  | 1,456,931 |  |  | 1,420,628 |
Time deposits | 1,110,758 |  |  | 1,372,783 |  |  | 1,561,767 |  |  | 1,645,971 |  |  | 1,420,591 |
| $ | 9,502,812 |  |  | $ | 9,427,616 |  |  | $ | 9,283,288 |  |  | $ | 8,967,754 |  |  | $ | 7,892,067 |

12

OceanFirst Financial Corp.
ASSET QUALITY
(dollars in thousands)

ASSET QUALITY | March 31, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | June 30, 2020 |  | March 31, 2020
Non-performing loans held-for-investment: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,616 |  |  | $ | 1,551 |  |  | $ | 586 |  |  | $ | 1,586 |  |  | $ | 207 |
Commercial real estate - owner-occupied | 11,676 |  |  | 13,054 |  |  | 11,365 |  |  | 4,582 |  |  | 4,219 |
Commercial real estate - investor | 12,366 |  |  | 10,660 |  |  | 2,978 |  |  | 5,274 |  |  | 3,384 |
Residential real estate | 6,398 |  |  | 8,642 |  |  | 11,518 |  |  | 6,568 |  |  | 5,920 |
Home equity loans and lines | 2,072 |  |  | 2,503 |  |  | 3,448 |  |  | 3,034 |  |  | 2,533 |
Total non-performing loans held-for-investment | 34,128 |  |  | 36,410 |  |  | 29,895 |  |  | 21,044 |  |  | 16,263 |
Non-performing loans held-for-sale | — |  |  | — |  |  | 67,489 |  |  | — |  |  | — |
Other real estate owned | 106 |  |  | 106 |  |  | 106 |  |  | 248 |  |  | 484 |
Total non-performing assets | $ | 34,234 |  |  | $ | 36,516 |  |  | $ | 97,490 |  |  | $ | 21,292 |  |  | $ | 16,747 |
PCD loans (1) | $ | 44,421 |  |  | $ | 48,488 |  |  | $ | 56,422 |  |  | $ | 61,694 |  |  | $ | 59,783 |
Delinquent loans 30 to 89 days | $ | 16,477 |  |  | $ | 34,683 |  |  | $ | 13,753 |  |  | $ | 13,640 |  |  | $ | 48,905 |
Troubled debt restructurings: |  |  |  |  |  |  |  |  |
Non-performing (included in total non-performing loans above) | $ | 4,785 |  |  | $ | 5,158 |  |  | $ | 9,866 |  |  | $ | 6,189 |  |  | $ | 6,249 |
Performing | 11,466 |  |  | 12,009 |  |  | 12,777 |  |  | 16,365 |  |  | 16,102 |
Total troubled debt restructurings | $ | 16,251 |  |  | $ | 17,167 |  |  | $ | 22,643 |  |  | $ | 22,554 |  |  | $ | 22,351 |
Allowance for loan credit losses | $ | 59,976 |  |  | $ | 60,735 |  |  | $ | 56,350 |  |  | $ | 38,509 |  |  | $ | 29,635 |
Allowance for loan credit losses as a percent of total loans receivable (2) | 0.76 | % |  | 0.78 | % |  | 0.70 | % |  | 0.46 | % |  | 0.37 | %
Allowance for loan credit losses as a percent of total non-performing loans held-for-investment | 175.74 |  |  | 166.81 |  |  | 188.49 |  |  | 182.99 |  |  | 182.22 |
Non-performing loans held-for-investment as a percent of total loans receivable | 0.43 |  |  | 0.47 |  |  | 0.37 |  |  | 0.25 |  |  | 0.21 |
Non-performing assets as a percent of total assets | 0.30 |  |  | 0.32 |  |  | 0.84 |  |  | 0.19 |  |  | 0.16 |

(1)PCD loans are not included in non-performing loans held-for-investment or delinquent loans totals.
(2)The loans acquired from prior bank acquisitions were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for loan credit losses, was $25,695, $27,951, $31,617, $35,439 and $38,272 at March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020 respectively.

NET RECOVERIES (CHARGE-OFFS) | For the Three Months Ended |
| March 31, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | June 30, 2020 |  | March 31, 2020 |
Net recoveries (charge-offs): |  |  |  |  |  |  |  |  |  |
Loan charge-offs | $ | (356) |  |  | $ | (3,220) |  |  | $ | (15,411) |  |  | $ | (169) |  |  | $ | (1,384) |  |
Recoveries on loans | 636 |  |  | 278 |  |  | 416 |  |  | 401 |  |  | 230 |  |
Net loan recoveries (charge-offs) | $ | 280 |  |  | $ | (2,942) |  | (1) | $ | (14,995) |  | (2) | $ | 232 |  |  | $ | (1,154) |  | (3)
Net loan recoveries (charge-offs) to average total loans (annualized) | NM* |  | 0.15 | % |  | 0.71 | % |  | NM* |  | 0.06 | % |
Net loan recoveries (charge-offs) detail: |  |  |  |  |  |  |  |  |  |
Commercial | $ | 126 |  |  | $ | (775) |  |  | $ | (14,801) |  |  | $ | 30 |  |  | $ | 59 |  |
Residential real estate | (203) |  |  | (1,731) |  |  | 314 |  |  | 212 |  |  | (1,112) |  |
Home equity loans and lines | 352 |  |  | (451) |  |  | (490) |  |  | (3) |  |  | (36) |  |
Other consumer | 5 |  |  | 15 |  |  | (18) |  |  | (7) |  |  | (65) |  |
Net loan recoveries (charge-offs) | $ | 280 |  |  | $ | (2,942) |  | (1) | $ | (14,995) |  | (2) | $ | 232 |  |  | $ | (1,154) |  | (3)

(1)Included in net loan charge-offs for the three months ended December 31, 2020 is $2.3 million relating to under-performing residential and consumer loans sold.
(2)Included in net loan charge-offs for the three months ended September 30, 2020 is $14.2 million relating to loans transferred to held-for-sale.
(3)Included in net loan charge-offs for the three months ended March 31, 2020 is $949 relating to under-performing loans sold.
* Not meaningful
13

OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME

| For the Three Months Ended
| March 31, 2021 |  | December 31, 2020 |  | March 31, 2020
(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 | $ | 1,138,911 |  |  | $ | 277 |  |  | 0.10 | % |  | $ | 1,223,472 |  |  | $ | 341 |  |  | 0.11 | % |  | $ | 63,726 |  |  | $ | 342 |  |  | 2.16 | %
Securities (1) | 1,311,683 |  |  | 6,689 |  |  | 2.07 |  |  | 1,209,543 |  |  | 7,224 |  |  | 2.38 |  |  | 1,186,535 |  |  | 7,921 |  |  | 2.68 |
Loans receivable, net (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 5,127,940 |  |  | 53,670 |  |  | 4.24 |  |  | 5,271,633 |  |  | 58,776 |  |  | 4.44 |  |  | 4,960,991 |  |  | 59,875 |  |  | 4.85 |
Residential real estate | 2,327,838 |  |  | 20,069 |  |  | 3.45 |  |  | 2,420,494 |  |  | 21,530 |  |  | 3.56 |  |  | 2,473,410 |  |  | 24,628 |  |  | 3.98 |
Home equity loans and lines | 275,943 |  |  | 3,523 |  |  | 5.18 |  |  | 293,746 |  |  | 3,930 |  |  | 5.32 |  |  | 339,003 |  |  | 4,070 |  |  | 4.83 |
Other consumer | 50,964 |  |  | 646 |  |  | 5.14 |  |  | 58,174 |  |  | 761 |  |  | 5.20 |  |  | 87,478 |  |  | 1,371 |  |  | 6.30 |
Allowance for loan credit losses, net of deferred loan fees | (52,887) |  |  | — |  |  | — |  |  | (51,682) |  |  | — |  |  | — |  |  | (10,220) |  |  | — |  |  | — |
Loans receivable, net | 7,729,798 |  |  | 77,908 |  |  | 4.09 |  |  | 7,992,365 |  |  | 84,997 |  |  | 4.23 |  |  | 7,850,662 |  |  | 89,944 |  |  | 4.61 |
Total interest-earning assets | 10,180,392 |  |  | 84,874 |  |  | 3.38 |  |  | 10,425,380 |  |  | 92,562 |  |  | 3.53 |  |  | 9,100,923 |  |  | 98,207 |  |  | 4.34 |
Non-interest-earning assets | 1,259,109 |  |  |  |  |  |  | 1,322,112 |  |  |  |  |  |  | 1,231,886 |  |  |  |  |
Total assets | $ | 11,439,501 |  |  |  |  |  |  | $ | 11,747,492 |  |  |  |  |  |  | $ | 10,332,809 |  |  |  |  |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing checking | $ | 3,711,976 |  |  | 4,311 |  |  | 0.47 | % |  | $ | 3,601,814 |  |  | 4,836 |  |  | 0.53 | % |  | $ | 2,807,793 |  |  | $ | 5,132 |  |  | 0.74 | %
Money market | 757,634 |  |  | 367 |  |  | 0.20 |  |  | 766,866 |  |  | 586 |  |  | 0.30 |  |  | 614,062 |  |  | 1,040 |  |  | 0.68 |
Savings | 1,522,603 |  |  | 179 |  |  | 0.05 |  |  | 1,489,853 |  |  | 240 |  |  | 0.06 |  |  | 1,403,338 |  |  | 1,555 |  |  | 0.45 |
Time deposits | 1,221,123 |  |  | 3,639 |  |  | 1.21 |  |  | 1,437,770 |  |  | 5,017 |  |  | 1.39 |  |  | 1,459,348 |  |  | 6,209 |  |  | 1.71 |
Total | 7,213,336 |  |  | 8,496 |  |  | 0.48 |  |  | 7,296,303 |  |  | 10,679 |  |  | 0.58 |  |  | 6,284,541 |  |  | 13,936 |  |  | 0.89 |
FHLB Advances | — |  |  | — |  |  | — |  | 204,880 |  |  | 779 |  |  | 1.51 |  |  | 631,329 |  |  | 2,824 |  |  | 1.80 |
Securities sold under agreements to repurchase | 129,444 |  |  | 95 |  |  | 0.30 |  |  | 143,385 |  |  | 154 |  |  | 0.43 |  |  | 82,105 |  |  | 95 |  |  | 0.47 |
Other borrowings | 228,368 |  |  | 2,679 |  |  | 4.76 |  |  | 242,030 |  |  | 3,099 |  |  | 5.09 |  |  | 118,851 |  |  | 1,707 |  |  | 5.78 |
Total borrowings | 357,812 |  |  | 2,774 |  |  | 3.14 |  |  | 590,295 |  |  | 4,032 |  |  | 2.72 |  |  | 832,285 |  |  | 4,626 |  |  | 2.24 |
Total interest-bearing liabilities | 7,571,148 |  |  | 11,270 |  |  | 0.60 |  |  | 7,886,598 |  |  | 14,711 |  |  | 0.74 |  |  | 7,116,826 |  |  | 18,562 |  |  | 1.05 |
Non-interest-bearing deposits | 2,212,273 |  |  |  |  |  |  | 2,209,532 |  |  |  |  |  |  | 1,687,582 |  |  |  |  |
Non-interest-bearing liabilities | 160,500 |  |  |  |  |  |  | 176,274 |  |  |  |  |  |  | 113,477 |  |  |  |  |
Total liabilities | 9,943,921 |  |  |  |  |  |  | 10,272,404 |  |  |  |  |  |  | 8,917,885 |  |  |  |  |
Stockholders’ equity | 1,495,580 |  |  |  |  |  |  | 1,475,088 |  |  |  |  |  |  | 1,414,924 |  |  |  |  |
Total liabilities and equity | $ | 11,439,501 |  |  |  |  |  |  | $ | 11,747,492 |  |  |  |  |  |  | $ | 10,332,809 |  |  |  |  |
Net interest income |  |  | $ | 73,604 |  |  |  |  |  |  | $ | 77,851 |  |  |  |  |  |  | $ | 79,645 |  |  |
Net interest rate spread (3) |  |  |  |  | 2.78 | % |  |  |  |  |  | 2.79 | % |  |  |  |  |  | 3.29 | %
Net interest margin (4) |  |  |  |  | 2.93 | % |  |  |  |  |  | 2.97 | % |  |  |  |  |  | 3.52 | %
Total cost of deposits (including non-interest-bearing deposits) |  |  |  |  | 0.37 | % |  |  |  |  |  | 0.45 | % |  |  |  |  |  | 0.70 | %

(1) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, 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,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Selected Financial Condition Data: |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 11,577,472 |  |  | $ | 11,448,313 |  |  | $ | 11,651,297 |  |  | $ | 11,345,365 |  |  | $ | 10,489,074 |
Debt securities available-for-sale, at estimated fair value |  | 268,511 |  |  | 183,302 |  |  | 169,634 |  |  | 153,239 |  |  | 153,738 |
Debt securities held-to-maturity, net of allowance for securities credit losses |  | 1,082,326 |  |  | 937,253 |  |  | 871,688 |  |  | 867,959 |  |  | 914,255 |
Equity investments, at estimated fair value |  | 50,159 |  |  | 107,079 |  |  | 63,846 |  |  | 13,830 |  |  | 14,409 |
Restricted equity investments, at cost |  | 52,199 |  |  | 51,705 |  |  | 67,505 |  |  | 68,091 |  |  | 81,005 |
Loans receivable, net of allowance for loan credit losses |  | 7,820,590 |  |  | 7,704,857 |  |  | 7,943,390 |  |  | 8,335,480 |  |  | 7,913,541 |
Deposits |  | 9,502,812 |  |  | 9,427,616 |  |  | 9,283,288 |  |  | 8,967,754 |  |  | 7,892,067 |
Federal Home Loan Bank advances |  | — |  |  | — |  |  | 343,452 |  |  | 343,392 |  |  | 825,824 |
Securities sold under agreements to repurchase and other borrowings |  | 362,641 |  |  | 363,925 |  |  | 389,764 |  |  | 399,661 |  |  | 210,388 |
Stockholders’ equity |  | 1,498,719 |  |  | 1,484,130 |  |  | 1,461,714 |  |  | 1,476,434 |  |  | 1,409,834 |

|  | For the Three Months Ended,
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Selected Operating Data: |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 84,874 |  |  | $ | 92,562 |  |  | $ | 92,962 |  |  | $ | 95,877 |  |  | $ | 98,207 |
Interest expense |  | 11,270 |  |  | 14,711 |  |  | 16,174 |  |  | 17,210 |  |  | 18,562 |
Net interest income |  | 73,604 |  |  | 77,851 |  |  | 76,788 |  |  | 78,667 |  |  | 79,645 |
Credit loss (benefit) expense |  | (620) |  |  | 4,072 |  |  | 35,714 |  |  | 9,649 |  |  | 9,969 |
Net interest income after credit loss (benefit) expense |  | 74,224 |  |  | 73,779 |  |  | 41,074 |  |  | 69,018 |  |  | 69,676 |
Other income (excluding net gain (loss) on equity investments and gain on sale of PPP loans) |  | 12,548 |  |  | 11,032 |  |  | 11,755 |  |  | 11,430 |  |  | 13,697 |
Net gain (loss) on equity investments |  | 8,287 |  |  | 24,487 |  |  | (3,576) |  |  | — |  |  | — |
Gain on sale of PPP loans |  | — |  |  | 5,101 |  |  | — |  |  | — |  |  | — |
Operating expenses (excluding FHLB advance prepayment fees, branch consolidation and merger related expenses) |  | 50,291 |  |  | 53,053 |  |  | 52,801 |  |  | 51,075 |  |  | 51,675 |
FHLB advance prepayment fees |  | — |  |  | 13,333 |  |  | — |  |  | 924 |  |  | — |
Branch consolidation expense |  | 1,011 |  |  | 3,336 |  |  | 830 |  |  | 863 |  |  | 2,594 |
Merger related expenses |  | 381 |  |  | 1,194 |  |  | 3,156 |  |  | 3,070 |  |  | 8,527 |
Income (loss) before provision (benefit) for income taxes |  | 43,376 |  |  | 43,483 |  |  | (7,534) |  |  | 24,516 |  |  | 20,577 |
Provision (benefit) for income taxes |  | 10,679 |  |  | 10,419 |  |  | (2,608) |  |  | 5,878 |  |  | 4,044 |
Net income (loss) |  | $ | 32,697 |  |  | $ | 33,064 |  |  | $ | (4,926) |  |  | $ | 18,638 |  |  | $ | 16,533 |
Net income (loss) available to common stockholders |  | $ | 31,693 |  |  | $ | 32,060 |  |  | $ | (6,019) |  |  | $ | 18,638 |  |  | $ | 16,533 |
Diluted earnings (loss) per share |  | $ | 0.53 |  |  | $ | 0.54 |  |  | $ | (0.10) |  |  | $ | 0.31 |  |  | $ | 0.27 |
Net accretion/amortization of purchase accounting adjustments included in net interest income |  | $ | 3,650 |  |  | $ | 6,186 |  |  | $ | 4,364 |  |  | $ | 5,536 |  |  | $ | 5,533 |

15

(continued)

|  | At or For the Three Months Ended
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Selected Financial Ratios and Other Data(1): |  |  |  |  |  |  |  |  |  |
Performance Ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets (2) |  | 1.12 | % |  | 1.09 | % |  | (0.21) | % |  | 0.67 | % |  | 0.64 | %
Return on average tangible assets (2) (3) |  | 1.18 |  |  | 1.14 |  |  | (0.22) |  |  | 0.71 |  |  | 0.68 |
Return on average stockholders’ equity (2) |  | 8.59 |  |  | 8.65 |  |  | (1.61) |  |  | 5.16 |  |  | 4.70 |
Return on average tangible stockholders’ equity (2) (3) |  | 13.22 |  |  | 13.43 |  |  | (2.51) |  |  | 8.10 |  |  | 7.50 |
Stockholders’ equity to total assets |  | 12.95 |  |  | 12.96 |  |  | 12.55 |  |  | 13.01 |  |  | 13.44 |
Tangible stockholders’ equity to tangible assets (3) |  | 8.83 |  |  | 8.79 |  |  | 8.41 |  |  | 8.77 |  |  | 8.85 |
Tangible common equity to tangible assets (3) |  | 8.33 |  |  | 8.28 |  |  | 7.91 |  |  | 8.25 |  |  | 8.85 |
Net interest rate spread |  | 2.78 |  |  | 2.79 |  |  | 2.77 |  |  | 3.02 |  |  | 3.29 |
Net interest margin |  | 2.93 |  |  | 2.97 |  |  | 2.97 |  |  | 3.24 |  |  | 3.52 |
Operating expenses to average assets (2) |  | 1.83 |  |  | 2.40 |  |  | 1.94 |  |  | 2.02 |  |  | 2.44 |
Efficiency ratio (2) (4) |  | 54.73 |  |  | 59.86 |  |  | 66.83 |  |  | 62.08 |  |  | 67.28 |
Loans to deposits |  | 82.84 |  |  | 82.27 |  |  | 86.19 |  |  | 93.43 |  |  | 100.51 |

16

(continued)

|  | At or For the Three Months Ended
|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Trust and Asset Management: |  |  |  |  |  |  |  |  |  |
Wealth assets under administration |  | $ | 274,172 |  |  | $ | 245,175 |  |  | $ | 232,292 |  |  | $ | 224,042 |  |  | $ | 173,856 |
Nest Egg |  | 101,701 |  |  | 93,237 |  |  | 80,472 |  |  | 57,383 |  |  | 43,528 |
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 |  | 24.84 |  |  | 24.57 |  |  | 24.21 |  |  | 24.47 |  |  | 23.38 |
Tangible common equity per common share at end of period (3) |  | 15.26 |  |  | 14.98 |  |  | 14.58 |  |  | 14.79 |  |  | 14.62 |
Common shares outstanding at end of period |  | 60,329,504 |  | 60,392,043 |  |  | 60,378,120 |  | 60,343,077 |  |  | 60,311,717 |
Preferred shares outstanding at end of period |  | 57,370 |  |  | 57,370 |  |  | 57,370 |  |  | 57,370 |  |  | — |
Number of full-service customer facilities: |  | 62 |  |  | 62 |  |  | 62 |  |  | 62 |  |  | 75 |
Quarterly Average Balances |  |  |  |  |  |  |  |  |  |
Total securities |  | $ | 1,311,683 |  |  | $ | 1,209,543 |  |  | $ | 1,112,174 |  |  | $ | 1,130,779 |  |  | $ | 1,186,535 |
Loans receivable, net |  | 7,729,798 |  |  | 7,992,365 |  |  | 8,350,797 |  |  | 8,295,622 |  |  | 7,850,662 |
Total interest-earning assets |  | 10,180,392 |  |  | 10,425,380 |  |  | 10,268,834 |  |  | 9,780,417 |  |  | 9,100,923 |
Total assets |  | 11,439,501 |  |  | 11,747,439 |  |  | 11,621,969 |  |  | 11,114,586 |  |  | 10,332,809 |
Interest-bearing transaction deposits |  | 5,992,213 |  |  | 5,858,533 |  |  | 5,425,392 |  |  | 5,065,069 |  |  | 4,825,193 |
Time deposits |  | 1,221,123 |  |  | 1,437,770 |  |  | 1,606,632 |  |  | 1,623,890 |  |  | 1,459,348 |
Total borrowed funds |  | 357,812 |  |  | 590,295 |  |  | 735,035 |  |  | 828,928 |  |  | 832,285 |
Total interest-bearing liabilities |  | 7,571,148 |  |  | 7,886,598 |  |  | 7,767,059 |  |  | 7,517,887 |  |  | 7,116,826 |
Non-interest bearing deposits |  | 2,212,273 |  |  | 2,209,532 |  |  | 2,209,241 |  |  | 2,018,044 |  |  | 1,687,582 |
Stockholders’ equity |  | 1,495,580 |  |  | 1,475,088 |  |  | 1,482,682 |  |  | 1,453,658 |  |  | 1,414,924 |
Total deposits |  | 9,425,609 |  |  | 9,505,835 |  |  | 9,241,265 |  |  | 8,707,003 |  |  | 7,972,123 |
Quarterly Yields |  |  |  |  |  |  |  |  |  |
Total securities |  | 2.07 | % |  | 2.38 | % |  | 2.43 | % |  | 2.64 | % |  | 2.68 | %
Loans receivable, net |  | 4.09 |  |  | 4.23 |  |  | 4.09 |  |  | 4.28 |  |  | 4.61 |
Total interest-earning assets |  | 3.38 |  |  | 3.53 |  |  | 3.60 |  |  | 3.94 |  |  | 4.34 |
Interest-bearing transaction deposits |  | 0.33 |  |  | 0.38 |  |  | 0.40 |  |  | 0.47 |  |  | 0.64 |
Time deposits |  | 1.21 |  |  | 1.39 |  |  | 1.45 |  |  | 1.58 |  |  | 1.71 |
Total borrowed funds |  | 3.14 |  |  | 2.72 |  |  | 2.60 |  |  | 2.38 |  |  | 2.24 |
Total interest-bearing liabilities |  | 0.60 |  |  | 0.74 |  |  | 0.83 |  |  | 0.92 |  |  | 1.05 |
Net interest spread |  | 2.78 |  |  | 2.79 |  |  | 2.77 |  |  | 3.02 |  |  | 3.29 |
Net interest margin |  | 2.93 |  |  | 2.97 |  |  | 2.97 |  |  | 3.24 |  |  | 3.52 |
Total deposits |  | 0.37 |  |  | 0.45 |  |  | 0.49 |  |  | 0.57 |  |  | 0.70 |

(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to “Non-GAAP Reconciliation.”
(3) Tangible stockholders’ equity and tangible assets exclude intangible assets relating to goodwill and core deposit intangible. Tangible common equity excludes goodwill, core deposit intangible and preferred equity.
(4) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.
17

OceanFirst Financial Corp.
SUPPLEMENTAL INFORMATION
(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,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Core Earnings: |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common stockholders (GAAP) |  | $ | 31,693 |  |  | $ | 32,060 |  |  | $ | (6,019) |  |  | $ | 18,638 |  |  | $ | 16,533 |
Add (less) non-recurring and non-core items: |  |  |  |  |  |  |  |  |  |
Merger related expenses |  | 381 |  |  | 1,194 |  |  | 3,156 |  |  | 3,070 |  |  | 8,527 |
Branch consolidation expenses |  | 1,011 |  |  | 3,336 |  |  | 830 |  |  | 863 |  |  | 2,594 |
Net (gain) loss on equity investments |  | (8,287) |  |  | (24,487) |  |  | 3,576 |  |  | — |  |  | — |
FHLB advance prepayment fees |  | — |  |  | 13,333 |  |  | — |  |  | 924 |  |  | — |
Gain on sale of PPP loans |  | — |  |  | (5,101) |  |  | — |  |  | — |  |  | — |
Two River and Country Bank opening credit loss expense under the CECL model |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,447 |
Income tax expense (benefit) on items |  | 1,666 |  |  | 2,832 |  |  | (1,809) |  |  | (1,190) |  |  | (3,121) |
Core earnings (loss) (Non-GAAP) |  | $ | 26,464 |  |  | $ | 23,167 |  |  | $ | (266) |  |  | $ | 22,305 |  |  | $ | 26,980 |
Core diluted earnings (loss) per share |  | $ | 0.44 |  |  | $ | 0.39 |  |  | $ | — |  |  | $ | 0.37 |  |  | $ | 0.45 |
Core Ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 0.94 | % |  | 0.78 | % |  | (0.01) | % |  | 0.81 | % |  | 1.05 | %
Return on average tangible assets |  | 0.98 |  |  | 0.82 |  |  | (0.01) |  |  | 0.85 |  |  | 1.11 |
Return on average tangible stockholders’ equity |  | 11.04 |  |  | 9.71 |  |  | (0.11) |  |  | 9.69 |  |  | 12.25 |
Efficiency ratio |  | 58.37 |  |  | 59.69 |  |  | 59.63 |  |  | 56.69 |  |  | 55.36 |

18

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

|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Total stockholders’ equity |  | $ | 1,498,719 |  |  | $ | 1,484,130 |  |  | $ | 1,461,714 |  |  | $ | 1,476,434 |  |  | $ | 1,409,834 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,319 |  |  | 500,319 |  |  | 500,849 |  |  | 501,472 |  |  | 500,093 |
Core deposit intangible |  | 22,273 |  |  | 23,668 |  |  | 25,194 |  |  | 26,732 |  |  | 28,276 |
Tangible stockholders’ equity |  | $ | 976,127 |  |  | $ | 960,143 |  |  | $ | 935,671 |  |  | $ | 948,230 |  |  | $ | 881,465 |
Total assets |  | $ | 11,577,472 |  |  | $ | 11,448,313 |  |  | $ | 11,651,297 |  |  | $ | 11,345,365 |  |  | $ | 10,489,074 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,319 |  |  | 500,319 |  |  | 500,849 |  |  | 501,472 |  |  | 500,093 |
Core deposit intangible |  | 22,273 |  |  | 23,668 |  |  | 25,194 |  |  | 26,732 |  |  | 28,276 |
Tangible assets |  | $ | 11,054,880 |  |  | $ | 10,924,326 |  |  | $ | 11,125,254 |  |  | $ | 10,817,161 |  |  | $ | 9,960,705 |
Tangible stockholders’ equity to tangible assets |  | 8.83 | % |  | 8.79 | % |  | 8.41 | % |  | 8.77 | % |  | 8.85 | %

COMPUTATION OF TOTAL TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS

|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31,
|  | 2021 |  | 2020 |  | 2020 |  | 2020 |  | 2020
Total stockholders’ equity |  | $ | 1,498,719 |  |  | $ | 1,484,130 |  |  | $ | 1,461,714 |  |  | $ | 1,476,434 |  |  | $ | 1,409,834 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,319 |  |  | 500,319 |  |  | 500,849 |  |  | 501,472 |  |  | 500,093 |
Core deposit intangible |  | 22,273 |  |  | 23,668 |  |  | 25,194 |  |  | 26,732 |  |  | 28,276 |
Preferred stock |  | 55,527 |  |  | 55,527 |  |  | 55,544 |  |  | 55,711 |  |  | — |
Tangible common equity |  | $ | 920,600 |  |  | $ | 904,616 |  |  | $ | 880,127 |  |  | $ | 892,519 |  |  | $ | 881,465 |
Total assets |  | $ | 11,577,472 |  |  | $ | 11,448,313 |  |  | $ | 11,651,297 |  |  | $ | 11,345,365 |  |  | $ | 10,489,074 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 500,319 |  |  | 500,319 |  |  | 500,849 |  |  | 501,472 |  |  | 500,093 |
Core deposit intangible |  | 22,273 |  |  | 23,668 |  |  | 25,194 |  |  | 26,732 |  |  | 28,276 |
Tangible assets |  | $ | 11,054,880 |  |  | $ | 10,924,326 |  |  | $ | 11,125,254 |  |  | $ | 10,817,161 |  |  | $ | 9,960,705 |
Tangible common equity to tangible assets |  | 8.33 | % |  | 8.28 | % |  | 7.91 | % |  | 8.25 | % |  | 8.85 | %

19