EX-99.1 2 ex991-earningsreleasejune2.htm EX-99.1

|  | Press Release

Exhibit 99.1
Company Contact:
Patrick S. Barrett
Chief Financial Officer
OceanFirst Financial Corp.
Tel: (732) 240-4500, ext. 7507
Email: pbarrett@oceanfirst.com
FOR IMMEDIATE RELEASE
OCEANFIRST FINANCIAL CORP.
ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS
RED BANK, NEW JERSEY, July 28, 2022 - OceanFirst Financial Corp. (NASDAQ:“OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), announced net income available to common stockholders of $28.0 million, or $0.47 per diluted share, for the three months ended June 30, 2022, as compared to $29.6 million, or $0.49 per diluted share, for the corresponding prior year period. For the six months ended June 30, 2022, the Company reported net income available to common stockholders of $52.7 million, or $0.89 per diluted share, as compared to $61.2 million, or $1.02 per diluted share, for the corresponding prior year period. Selected performance metrics are as follows (refer to “Selected Quarterly Financial Data” for additional information):

| For the Three Months Ended, |  | For the Six Months Ended,
Performance Ratios (Annualized): | June 30, |  | March 31, |  | June 30, |  | June 30, |  | June 30,
2022 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Return on average assets | 0.92 | % |  | 0.84 | % |  | 1.03 | % |  | 0.88 | % |  | 1.07 | %
Return on average stockholders’ equity | 7.31 |  |  | 6.57 |  |  | 7.88 |  |  | 6.94 |  |  | 8.23 |
Return on average tangible stockholders’ equity (a) | 11.08 |  |  | 9.94 |  |  | 12.07 |  |  | 10.52 |  |  | 12.64 |
Efficiency ratio | 59.65 |  |  | 61.77 |  |  | 60.21 |  |  | 60.68 |  |  | 57.34 |
Net interest margin | 3.29 |  |  | 3.18 |  |  | 2.89 |  |  | 3.24 |  |  | 2.91 |

(a) Return on average tangible stockholders’ equity, a non-GAAP (“generally accepted accounting principles”) financial measure, excludes the impact of intangible assets and goodwill from both assets and stockholders’ equity. Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.

Core earnings 1 for the three and six months ended June 30, 2022 amounted to $34.6 million and $63.4 million, respectively, or $0.59 and $1.08 per diluted share, respectively. Non-core operations had an adverse impact of $6.7 million and $10.7 million, net of tax, for the three and six months ended June 30, 2022, respectively. Core earnings PTPP were $47.0 million and $86.7 million, respectively, or $0.80 and $1.47 per diluted share for the three and six months ended June 30, 2022, respectively. Selected performance metrics are as follows:

| For the Three Months Ended, |  | For the Six Months Ended,
| June 30, |  | March 31, |  | June 30, |  | June 30, |  | June 30,
Core Ratios 1 (Annualized): | 2022 |  | 2022 |  | 2021 |  | 2022 |  | 2021
Return on average assets | 1.13 | % |  | 0.98 | % |  | 1.02 | % |  | 1.06 | % |  | 0.98 | %
Return on average tangible stockholders’ equity | 13.73 |  |  | 11.55 |  |  | 12.04 |  |  | 12.65 |  |  | 11.55 |
Efficiency ratio | 54.43 |  |  | 57.51 |  |  | 60.06 |  |  | 55.89 |  |  | 59.21 |
Core diluted earnings per share | $ | 0.59 |  |  | $ | 0.49 |  |  | $ | 0.49 |  |  | $ | 1.08 |  |  | $ | 0.93 |
Core PTPP diluted earnings per share | 0.80 |  |  | 0.67 |  |  | 0.55 |  |  | 1.47 |  |  | 1.13 |

Key developments for the recent quarter are described below:
•Strengthening Net Interest Income and Margin: Net interest income increased by $6.6 million to $90.8 million, from $84.2 million in the prior linked quarter. Net interest margin increased to 3.29%, as compared to 3.18% in the prior linked quarter, largely driven by the impact of the rising rate environment on interest earning assets, as well as elevated prepayment fees, partly offset by increased cost of funds.
•Balance Sheet Growth and Improving Asset Quality: Loan growth for the quarter was $315.9 million, reflecting originations of $835.5 million, and the committed loan pipeline was $385.0 million as of June 30, 2022. Non-performing loans decreased to $20.8 million, as compared to $26.9 million in the prior linked quarter. Deposits grew by $98.7 million year-to-date and $416.2 million as compared to June 30, 2021.
1 Core earnings and core earnings before income taxes and credit loss provision (“PTPP”), and ratios derived from them, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net branch consolidation expenses, net loss (gain) on equity investments, and the income tax effect of these items, (collectively referred to as “non-core” operations). PTPP excludes the aforementioned pre-tax “non-core” items along with income tax expense (benefit) and credit loss provision (benefit). Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.
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•Expense Management Discipline: Total operating expenses increased modestly to $58.7 million, from $57.5 million in the prior linked quarter, and operating expenses, excluding non-core operations of $742,000 and $2.4 million, respectively, increased to $57.9 million from $55.1 million, for the same periods. Operating expenses for the current quarter included $3.2 million of expenses related to the acquisition of a majority interest in Trident Abstract Title Agency, LLC (“Trident”). Excluding the impact of non-core operations and Trident, operating expenses decreased to $54.7 million from $55.1 million in the prior linked quarter. The efficiency ratio improved to 59.65% from 61.77% in the prior linked quarter and the efficiency ratio, excluding the impact of non-core operations and Trident, improved to 53.69%, from 57.51%, in the prior linked quarter.
•Dividend Increase: On July 27, 2022, the Board of Directors approved an increase to the quarterly cash dividend by $0.03, or 18%, to $0.20 per share.
Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “Our strong financial performance in the second quarter includes expansion of net interest income and margin, improvements in asset quality, and a continuation of robust loan originations which exceeded $835 million.” Mr. Maher added, “Reflecting continued strong results and commitment to shareholder returns, the Board of Directors approved a $0.20 per common share dividend, an increase of $0.03 per share, or 18%. Additionally, as a talent-focused organization, the Company has increased wages by five percent or provided one-time awards to support those most impacted by the current inflationary environment. The additional compensation expense related to this investment is estimated to be $2.5 million on an annual basis.”
On November 4, 2021, the Company announced a merger agreement with Partners Bancorp. At this time, the Company has filed its regulatory applications; however, the Company has not received a timeline for when the review process will be completed and, therefore, cannot provide any details for
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when the merger might close. The merger is subject to receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
The Company’s Board of Directors declared its 102 nd consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock was increased to $0.20 per share and will be paid on August 19, 2022 to common stockholders of record on August 8, 2022. 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 August 15, 2022 to preferred stockholders of record on July 29, 2022.
Results of Operations
On April 1, 2022, the Company completed its acquisition of a majority interest in Trident and its results of operations are included in the consolidated results for the three and six months ended June 30, 2022, but are excluded from the results of operations for the period from January 1, 2021 to March 31, 2022. Refer to “Supplemental Information on Trident” for the impact of Trident on the Company’s consolidated results.
Net income for the three and six months ended June 30, 2022 was adversely impacted by non-core operations of $6.7 million and $10.7 million, net of tax, while net income for the three and six months ended June 30, 2021 was favorably impacted by non-core operations of $78,000 and $5.3 million, net of tax. Core earnings for the three and six months ended June 30, 2022 was $34.6 million and $63.4 million, respectively, or $0.59 and $1.08 per diluted share, respectively, an increase from core earnings of $29.5 million and $55.9 million, or $0.49 and $0.93 per diluted share, for the corresponding prior year periods, respectively.
Net income for the prior linked quarter was adversely impacted by non-core operations of $4.0 million, net of tax. Core earnings for the three months ended June 30, 2022 increased from $28.8 million, or $0.49 per diluted share, for the prior linked quarter.
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Net Interest Income and Margin
Net interest income for the three and six months ended June 30, 2022 increased to $90.8 million and $175.0 million, respectively, as compared to $74.0 million and $147.6 million for the corresponding prior year periods, respectively, reflecting increases in average interest-earning assets and net interest margin.
Net interest margin for the three and six months ended June 30, 2022 increased to 3.29% and 3.24%, respectively, from 2.89% and 2.91% for the same prior year periods, respectively. Excluding the impact of purchase accounting accretion and prepayment fees of 0.17% and 0.16% for the three months ended June 30, 2022 and 2021, respectively, net interest margin increased to 3.12% from 2.73%. Excluding the impact of purchase accounting accretion and prepayment fees of 0.15% and 0.17% for the six months ended June 30, 2022 and 2021, respectively, net interest margin increased to 3.09% from 2.74%. Net interest margin for both the three and six months ended June 30, 2022 were positively impacted by the redeployment of excess cash into loans and securities and, to a lesser extent, the impact of the rising rate environment on interest earning assets and decreased costs of funds.
Average interest-earning assets increased by $801.0 million and $675.4 million for the three and six months ended June 30, 2022, respectively, as compared to the same prior year periods, primarily due to loan and securities growth funded by the redeployment of excess cash and, to a lesser extent, funding from increased deposits and borrowings. Average loans receivable, net of allowance for loan credit losses, increased by $1.42 billion and $1.24 billion for the three and six months ended June 30, 2022, respectively, as compared to the same prior year periods. For the three and six months ended June 30, 2022, the cost of average interest-bearing liabilities decreased to 0.42% and 0.39%, respectively, from 0.50% and 0.55% for the corresponding prior year periods, respectively, as a result of the downward repricing of deposits. The total cost of deposits (including non-interest bearing deposits) was 0.18% and 0.17% for the three and six months ended June 30, 2022, respectively, as
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compared to 0.27% and 0.32% for the same prior year periods, respectively, and a weighted average rate of 0.28% at June 30, 2022.
Net interest income for the three months ended June 30, 2022 increased by $6.6 million, as compared to the prior linked quarter, reflecting an increase in net interest margin to 3.29%, as compared to 3.18% for the prior linked quarter. Excluding the impact of purchase accounting accretion and prepayment fees of 0.17% and 0.12% for the three months ended June 30, 2022 and March 31, 2022, respectively, net interest margin increased to 3.12% from 3.06%. The expansion in net interest margin was primarily attributable to loan growth and the impact of the rising rate environment on interest earning assets, partly offset by increased costs of funds. Average interest-earning assets increased by $351.8 million for the quarter ended June 30, 2022, as compared to the prior linked quarter, primarily due to loan growth. The yield on average interest-earning assets increased to 3.60% for the three months ended June 30, 2022, from 3.43% in the prior linked quarter. The total cost of average interest-bearing liabilities was 0.42% for the three months ended June 30, 2022, as compared to 0.35% in the prior linked quarter, due primarily to the higher costs of funds associated with increased overnight borrowings.
For the three months ended June 30, 2022, the Company largely completed a program to extend maturities on price sensitive deposits in a cost-effective manner, consisting of the addition of $689.2 million in brokered time deposits with laddered maturities ranging from 1 to 24 months. The brokered time deposits carry a weighted average rate of 2.12%, a weighted average life of 9.5 months, and were issued at costs less than comparable wholesale borrowings.
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Credit Loss Expense (Benefit)
Credit loss expense for the three and six months ended June 30, 2022 was $1.3 million and $3.1 million, respectively, as compared to a credit loss benefit of $6.5 million and $7.1 million for the corresponding prior year periods, respectively, and a credit loss expense of $1.9 million in the prior linked quarter. The credit loss expense for the three and six months ended June 30, 2022 was influenced by strong loan portfolio growth, cooling and increasingly uncertain macro-economic forecasts due to conflicting economic signals, partly offset by ongoing positive trends in the Company’s asset quality and continued robust employment levels.
Net loan charge-offs were $9,000 and $224,000 for the three months ended June 30, 2022 and 2021, respectively. Net loan recoveries were $83,000 and $56,000 for the six months ended June 30, 2022 and 2021, respectively. Net loan recoveries were $92,000 in the prior linked quarter. Refer to “Asset Quality” section for further discussion.
Non-interest Income
For the three and six months ended June 30, 2022, other income decreased to $7.5 million and $16.4 million, respectively, as compared to $11.8 million and $32.6 million for the corresponding prior year periods, respectively.
Other income for the three and six months ended June 30, 2022 were adversely impacted by non-core operations of $8.1 million and $10.9 million, respectively, primarily related to losses on equity investments, of which $7.1 million and $12.0 million, respectively, were unrealized market valuation losses on preferred stock equity investments primarily due to the rising interest rate environment. The preferred stock equity investments carry a weighted average yield of 5.1% and an amortized cost of $73.6 million at June 30, 2022. Other income for the three and six months ended June 30, 2021 was favorably impacted by non-core operations of $576,000 and $8.9 million, respectively, primarily related to the appreciation and sale of common stock equity investments held by the Company in the corresponding prior year periods.
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Excluding non-core operations, the increase in other income of $4.4 million for the three months ended June 30, 2022, as compared to the corresponding prior year period, was primarily due to the acquisition of a majority interest in Trident, which added $4.5 million of title-related fees and service charges. Excluding the impact of non-core operations and Trident, other income decreased by $118,000 due to decreases in net gain on sale of loans of $1.3 million and fees and service charges of $510,000, partially offset by an increase in commercial loan swap income of $2.2 million for the three months ended June 30, 2022.
Excluding non-core operations, the increase in other income of $3.5 million for the six months ended June 30, 2022, as compared to the corresponding prior year period, was primarily due to the acquisition of a majority interest in Trident, which added $4.5 million of title-related fees and services charges. Excluding the impact of non-core operations and Trident, other income decreased $1.0 million due to decreases in net gain on sale of loans of $3.0 million, deposit fees and service charges of $1.2 million, and Paycheck Protection Program (“PPP”) loan origination referral fees of $776,000, partly offset by an increase in commercial loan swap income of $3.9 million.
Excluding the adverse impact of non-core operations of $2.8 million in the prior linked quarter, other income for the three months ended June 30, 2022 increased $4.0 million, primarily due to the acquisition of a majority interest in Trident, which added $4.5 million of title-related fees and services charges. Excluding the impact of non-core operations and Trident, other income decreased $529,000 primarily due to a decrease in income from bank owned life insurance of $681,000 as a result of non-recurring death benefits received in the prior linked quarter.
Non-interest Expense
Operating expenses increased to $58.7 million and $116.2 million for the three and six months ended June 30, 2022, respectively, as compared to $51.7 million and $103.4 million in the same prior year periods, respectively. Operating expenses were adversely impacted by non-core operations for the three and six months ended June 30, 2022 of $742,000 and $3.1 million, respectively. Operating
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expenses were adversely impacted by non-core operations for the three and six months ended June 30, 2021 of $472,000 and $1.9 million, respectively.
Excluding non-core operations, the $6.7 million increase in operating expenses for the three months ended June 30, 2022, as compared to the corresponding prior year period, was partly due to the acquisition of a majority interest in Trident, which added $3.2 million of expenses for the three months ended June 30, 2022. Excluding the impact of non-core operations and Trident, operating expenses increased $3.5 million primarily due to increases in data processing expense of $1.8 million, as a result of the migration to a new core banking system, compensation and benefits expense of $1.2 million partly relating to the commercial banking strategy and the commercial banking hires in expansion markets of Boston and Baltimore, and an increase in the Company’s federal deposit insurance and regulatory assessments of $689,000 as a result of a higher assessment base and multiplier.
Excluding non-core operations, the $11.6 million increase in operating expenses for the six months ended June 30, 2022, as compared to the corresponding prior year period, was partly due to the acquisition of a majority interest in Trident, which added $3.2 million of expenses for the six months ended June 30, 2022. Excluding the impact of non-core operations and Trident, operating expenses increased $8.4 million primarily due to increases in data processing expense of $3.5 million as a result of the migration to a new core banking system, compensation and benefits expense of $3.5 million partly relating to the commercial banking strategy and the commercial banking hires in expansion markets of Boston and Baltimore, federal deposit insurance and regulatory assessments of $715,000 as a result of a higher assessment base and multiplier, and professional fees of $547,000.
Excluding non-core operations, operating expenses for the three months ended June 30, 2022 increased $2.8 million as compared to the prior linked quarter, primarily due to the acquisition of a majority interest in Trident, which added $3.2 million of expenses for the three months ended June 30, 2022. Excluding the impact of non-core operations and Trident, operating expenses decreased $415,000 primarily due to decreases in occupancy expense of $1.1 million and professional fees of $869,000,
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partly offset by increases in check card processing of $534,000 and data processing expense of $419,000.
Income Tax Expense
The provision for income taxes was $8.9 million and $16.9 million for the three and six months ended June 30, 2022, respectively, as compared to $10.1 million and $20.7 million for the same prior year periods, respectively, and $8.0 million for the prior linked quarter. The effective tax rate was 23.3% and 23.4% for the three and six months ended June 30, 2022, respectively, as compared to 24.8% and 24.7% for the same prior year periods, respectively, and 23.6% for the prior linked quarter.
Financial Condition
Total assets increased by $699.0 million to $12.44 billion at June 30, 2022, from $11.74 billion at December 31, 2021. Total loans increased by $802.0 million to $9.42 billion at June 30, 2022, from $8.62 billion at December 31, 2021, due to strong loan originations. Total debt securities decreased by $132.1 million at June 30, 2022, as compared to December 31, 2021, primarily due to principal repayments, and to a lesser extent, an increase in unrealized losses driven by the rising rate environment. Other assets increased by $46.5 million to $193.6 million at June 30, 2022 from $147.0 million at December 31, 2021, primarily due to an increase in market values associated with our customer interest rate swap programs.
Total liabilities increased by $694.2 million to $10.92 billion at June 30, 2022, from $10.22 billion at December 31, 2021. Deposits increased by $98.7 million to $9.83 billion at June 30, 2022, from $9.73 billion at December 31, 2021. Total deposits, excluding time deposits, decreased by $626.3 million to $8.33 billion at June 30, 2022, from $8.96 billion at December 31, 2021, due to the net runoff of interest-bearing checking balances. Time deposits increased to $1.50 billion at June 30, 2022, from $775.0 million at December 31, 2021, primarily due to an increase in brokered time deposits as discussed in “Net Interest Income and Margin.” The loans-to-deposit ratio at June 30, 2022 was 95.9%, as compared to 88.6% at December 31, 2021.
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Overnight FHLB advances increased to $488.8 million at June 30, 2022 from $0 at December 31, 2021 to fund liquidity needs. Other borrowings decreased by $34.5 million to $194.7 million at June 30, 2022, from $229.1 million at December 31, 2021, primarily due to the extinguishment of $35.0 million of subordinated debt in March 2022. Other liabilities increased by $151.2 million to $273.2 million at June 30, 2022, from $122.0 million at December 31, 2021, primarily due to an increase in the market values associated with our customer interest rate swap programs and collateral received from counterparties.
Stockholders’ equity was $1.52 billion at June 30, 2022 and December 31, 2021. Accumulated other comprehensive loss increased by $26.3 million to $29.1 million at June 30, 2022 from $2.8 million at December 31, 2021, primarily due to unrealized losses on debt securities available-for-sale which were adversely impacted by the rising interest rate environment. For the six months ended June 30, 2022, the Company repurchased 373,223 shares totaling $7.4 million under its stock repurchase programs at a weighted average cost of $19.82. There were 2,934,438 shares available for repurchase at June 30, 2022 under the existing repurchase program. Stockholders’ equity per common share increased to $25.73 at June 30, 2022, as compared to $25.63 at December 31, 2021. Tangible common equity per common share 2 increased to $15.96 at June 30, 2022, as compared to $15.93 at December 31, 2021.
2 Tangible common equity per common share, a non-GAAP financial measure, excludes the impact of intangible assets, goodwill, and preferred equity from stockholders’ equity. Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.
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Asset Quality
The Company’s non-performing loans decreased to $20.8 million at June 30, 2022, as compared to $25.5 million at December 31, 2021. The Company’s non-performing loans, excluding $3.5 million and $6.5 million of non-performing purchased with credit deterioration (“PCD”) loans from prior bank acquisitions at June 30, 2022 and December 31, 2021, respectively, decreased to $17.2 million at June 30, 2022, as compared to $18.9 million at December 31, 2021. The allowance for loan credit losses as a percentage of total non-performing loans was 250.86% at June 30, 2022, as compared to 191.61% at December 31, 2021. The allowance for loan credit losses as a percentage of total non-performing loans, excluding PCD loans, was 302.26% at June 30, 2022, as compared to 257.81% at December 31, 2021. The level of 30 to 89 days delinquent loans improved to $9.6 million at June 30, 2022, from $14.5 million at December 31, 2021. The level of 30 to 89 days delinquent loans, excluding non-performing and PCD loans, improved to $8.2 million at June 30, 2022, from $13.5 million at December 31, 2021.
The Company’s allowance for loan credit losses was 0.55% of total loans at June 30, 2022, as compared to 0.57% at December 31, 2021. The allowance for loan credit losses plus the unamortized credit and PCD marks amounted to $67.5 million, or 0.72% of total loans, at June 30, 2022, as compared to $67.8 million, or 0.79% of total loans at December 31, 2021.
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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 and in some instances excluding income taxes and credit loss provision, and reporting equity and asset amounts excluding intangible assets and goodwill, which can vary from period to period, provides a better comparison of period to period operating performance. In addition, a non-GAAP table has been presented excluding the results associated with the acquisition of a majority interest in Trident for better comparison period over period. 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, July 29, 2022 at 11:00 a.m. Eastern Time. The direct dial number for the call is (844) 200-6205, using the access code 729258. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (866) 813-9403, access code 365681, from one hour after the end of the call until October 28, 2022. 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 $12.4 billion regional bank providing financial services throughout New Jersey and in the major metropolitan markets of Philadelphia, New York, Baltimore, Washington D.C., and Boston. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to 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 or any other pandemic on our operations and financial results and those of our customers, changes in interest rates, inflation, 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 current or anticipated impact of military conflict, terrorism or other geopolitical events, 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, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks; 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, 2021, 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)

|  | June 30, |  | March 31, |  | December 31, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021
|  | (Unaudited) |  | (Unaudited) |  |  |  | (Unaudited)
Assets |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 189,019 |  |  | $ | 210,919 |  |  | $ | 204,949 |  |  | $ | 1,084,029 |
Debt securities available-for-sale, at estimated fair value |  | 507,276 |  |  | 546,470 |  |  | 568,255 |  |  | 249,330 |
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,293 at June 30, 2022, $1,380 at March 31, 2022, $1,467 at December 31, 2021, and $1,609 at June 30, 2021 (estimated fair value of $987,532 at June 30, 2022, $1,050,892 at March 31, 2022, $1,152,744 at December 31, 2021 and $1,169,123 at June 30, 2021) |  | 1,068,034 |  |  | 1,099,514 |  |  | 1,139,193 |  |  | 1,146,735 |
Equity investments |  | 75,269 |  |  | 93,888 |  |  | 101,155 |  |  | 90,917 |
Restricted equity investments, at cost |  | 76,047 |  |  | 56,704 |  |  | 53,195 |  |  | 52,519 |
Loans receivable, net of allowance for loan credit losses of $52,061 at June 30, 2022, $50,598 at March 31, 2022, $48,850 at December 31, 2021 and $53,876 at June 30, 2021 |  | 9,380,688 |  |  | 9,065,679 |  |  | 8,583,352 |  |  | 7,774,351 |
Loans held-for-sale |  | — |  |  | — |  |  | — |  |  | 1,493 |
Interest and dividends receivable |  | 34,184 |  |  | 33,353 |  |  | 32,606 |  |  | 28,014 |
Other real estate owned |  | — |  |  | 106 |  |  | 106 |  |  | 106 |
Premises and equipment, net |  | 128,118 |  |  | 126,767 |  |  | 125,828 |  |  | 117,509 |
Bank owned life insurance |  | 260,230 |  |  | 259,121 |  |  | 259,207 |  |  | 259,608 |
Assets held for sale |  | 4,263 |  |  | 5,676 |  |  | 6,229 |  |  | 4,032 |
Goodwill |  | 506,146 |  |  | 500,319 |  |  | 500,319 |  |  | 500,319 |
Core deposit intangible |  | 15,827 |  |  | 17,005 |  |  | 18,215 |  |  | 20,912 |
Other assets |  | 193,552 |  |  | 149,424 |  |  | 147,007 |  |  | 154,027 |
Total assets |  | $ | 12,438,653 |  |  | $ | 12,164,945 |  |  | $ | 11,739,616 |  |  | $ | 11,483,901 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |
Deposits |  | $ | 9,831,484 |  |  | $ | 10,056,233 |  |  | $ | 9,732,816 |  |  | $ | 9,415,286 |
Federal Home Loan Bank advances |  | 488,750 |  |  | 75,002 |  |  | — |  |  | — |
Securities sold under agreements to repurchase with customers |  | 105,495 |  |  | 117,782 |  |  | 118,769 |  |  | 141,475 |
Other borrowings |  | 194,654 |  |  | 194,396 |  |  | 229,141 |  |  | 228,564 |
Advances by borrowers for taxes and insurance |  | 23,640 |  |  | 25,398 |  |  | 20,305 |  |  | 21,281 |
Other liabilities |  | 273,198 |  |  | 176,800 |  |  | 122,032 |  |  | 168,506 |
Total liabilities |  | 10,917,221 |  |  | 10,645,611 |  |  | 10,223,063 |  |  | 9,975,112 |
OceanFirst Financial Corp. stockholders’ equity |  | 1,520,488 |  |  | 1,519,334 |  |  | 1,516,553 |  |  | 1,508,789 |
Non-controlling interest |  | 944 |  |  | — |  |  | — |  |  | — |
Total stockholders’ equity |  | 1,521,432 |  |  | 1,519,334 |  |  | 1,516,553 |  |  | 1,508,789 |
Total liabilities and stockholders’ equity |  | $ | 12,438,653 |  |  | $ | 12,164,945 |  |  | $ | 11,739,616 |  |  | $ | 11,483,901 |

15

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

|  | For the Three Months Ended, |  | For the Six Months Ended,
|  | June 30, |  | March 31, |  | June 30, |  | June 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2022 |  | 2021
|  | |---------------------- (Unaudited) ----------------------| |  | |---------- (Unaudited) -----------|
Interest income: |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 90,731 |  |  | $ | 82,468 |  |  | $ | 77,048 |  |  | $ | 173,199 |  |  | $ | 154,956 |
Debt securities |  | 7,473 |  |  | 7,504 |  |  | 5,984 |  |  | 14,977 |  |  | 11,339 |
Equity investments and other |  | 1,212 |  |  | 1,011 |  |  | 309 |  |  | 2,223 |  |  | 1,920 |
Total interest income |  | 99,416 |  |  | 90,983 |  |  | 83,341 |  |  | 190,399 |  |  | 168,215 |
Interest expense: |  |  |  |  |  |  |  |  |  |
Deposits |  | 4,317 |  |  | 4,041 |  |  | 6,325 |  |  | 8,358 |  |  | 14,821 |
Borrowed funds |  | 4,302 |  |  | 2,715 |  |  | 3,000 |  |  | 7,017 |  |  | 5,774 |
Total interest expense |  | 8,619 |  |  | 6,756 |  |  | 9,325 |  |  | 15,375 |  |  | 20,595 |
Net interest income |  | 90,797 |  |  | 84,227 |  |  | 74,016 |  |  | 175,024 |  |  | 147,620 |
Credit loss expense (benefit) |  | 1,254 |  |  | 1,851 |  |  | (6,460) |  |  | 3,105 |  |  | (7,080) |
Net interest income after credit loss expense (benefit) |  | 89,543 |  |  | 82,376 |  |  | 80,476 |  |  | 171,919 |  |  | 154,700 |
Other income: |  |  |  |  |  |  |  |  |  |
Bankcard services revenue |  | 3,310 |  |  | 2,963 |  |  | 3,591 |  |  | 6,273 |  |  | 6,643 |
Trust and asset management revenue |  | 658 |  |  | 609 |  |  | 591 |  |  | 1,267 |  |  | 1,190 |
Fees and service charges |  | 7,646 |  |  | 3,060 |  |  | 3,809 |  |  | 10,706 |  |  | 7,546 |
Net gain on sales of loans |  | 3 |  |  | 177 |  |  | 1,279 |  |  | 180 |  |  | 3,195 |
Net (loss) gain on equity investments |  | (8,078) |  |  | (2,786) |  |  | 576 |  |  | (10,864) |  |  | 8,863 |
Net gain (loss) from other real estate operations |  | 50 |  |  | (2) |  |  | (1) |  |  | 48 |  |  | (9) |
Income from bank owned life insurance |  | 1,422 |  |  | 2,103 |  |  | 1,716 |  |  | 3,525 |  |  | 3,131 |
Commercial loan swap income |  | 2,294 |  |  | 2,781 |  |  | 73 |  |  | 5,075 |  |  | 1,184 |
Other |  | 236 |  |  | (53) |  |  | 169 |  |  | 183 |  |  | 895 |
Total other income |  | 7,541 |  |  | 8,852 |  |  | 11,803 |  |  | 16,393 |  |  | 32,638 |
Operating expenses: |  |  |  |  |  |  |  |  |  |
Compensation and employee benefits |  | 33,153 |  |  | 30,695 |  |  | 29,912 |  |  | 63,848 |  |  | 58,278 |
Occupancy |  | 4,758 |  |  | 5,744 |  |  | 5,314 |  |  | 10,502 |  |  | 10,375 |
Equipment |  | 1,336 |  |  | 1,370 |  |  | 1,306 |  |  | 2,706 |  |  | 2,884 |
Marketing |  | 971 |  |  | 616 |  |  | 625 |  |  | 1,587 |  |  | 1,059 |
Federal deposit insurance and regulatory assessments |  | 1,788 |  |  | 1,890 |  |  | 1,099 |  |  | 3,678 |  |  | 2,963 |
Data processing |  | 6,170 |  |  | 5,736 |  |  | 4,402 |  |  | 11,906 |  |  | 8,433 |
Check card processing |  | 1,515 |  |  | 982 |  |  | 1,303 |  |  | 2,497 |  |  | 2,675 |
Professional fees |  | 2,472 |  |  | 3,322 |  |  | 2,391 |  |  | 5,794 |  |  | 5,228 |
Amortization of core deposit intangible |  | 1,178 |  |  | 1,210 |  |  | 1,361 |  |  | 2,388 |  |  | 2,756 |
Branch consolidation expense, net |  | 546 |  |  | 402 |  |  | 26 |  |  | 948 |  |  | 1,037 |
Merger related expenses |  | 196 |  |  | 1,965 |  |  | 446 |  |  | 2,161 |  |  | 827 |
Other operating expense |  | 4,578 |  |  | 3,563 |  |  | 3,485 |  |  | 8,141 |  |  | 6,838 |
Total operating expenses |  | 58,661 |  |  | 57,495 |  |  | 51,670 |  |  | 116,156 |  |  | 103,353 |
Income before provision for income taxes |  | 38,423 |  |  | 33,733 |  |  | 40,609 |  |  | 72,156 |  |  | 83,985 |
Provision for income taxes |  | 8,940 |  |  | 7,974 |  |  | 10,054 |  |  | 16,914 |  |  | 20,733 |
Net income |  | 29,483 |  |  | 25,759 |  |  | 30,555 |  |  | 55,242 |  |  | 63,252 |
Net income attributable to non-controlling interest |  | 522 |  |  | — |  |  | — |  |  | 522 |  |  | — |
Net income attributable to OceanFirst Financial Corp. |  | 28,961 |  |  | 25,759 |  |  | 30,555 |  |  | 54,720 |  |  | 63,252 |
Dividends on preferred shares |  | 1,004 |  |  | 1,004 |  |  | 1,004 |  |  | 2,008 |  |  | 2,008 |
Net income available to common stockholders |  | $ | 27,957 |  |  | $ | 24,755 |  |  | $ | 29,551 |  |  | $ | 52,712 |  |  | $ | 61,244 |
Basic earnings per share |  | $ | 0.48 |  |  | $ | 0.42 |  |  | $ | 0.49 |  |  | $ | 0.90 |  |  | $ | 1.02 |
Diluted earnings per share |  | $ | 0.47 |  |  | $ | 0.42 |  |  | $ | 0.49 |  |  | $ | 0.89 |  |  | $ | 1.02 |
Average basic shares outstanding |  | 58,894 |  |  | 58,739 |  |  | 59,701 |  |  | 58,823 |  |  | 59,776 |
Average diluted shares outstanding |  | 58,995 |  |  | 58,943 |  |  | 59,966 |  |  | 58,975 |  |  | 60,040 |

16

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

LOANS RECEIVABLE |  |  | At
|  |  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Commercial: |  |  |  |  |  |  |  |  |  |  |
Commercial real estate - investor |  |  | $ | 4,808,965 |  |  | $ | 4,607,880 |  |  | $ | 4,378,061 |  |  | $ | 3,922,983 |  |  | $ | 3,836,230 |
Commercial real estate - owner-occupied |  | 1,020,873 |  |  | 1,057,246 |  |  | 1,055,065 |  |  | 1,123,973 |  |  | 1,045,514 |
Commercial and industrial |  |  | 584,464 |  |  | 502,739 |  |  | 449,224 |  |  | 457,674 |  |  | 474,919 |
Total commercial |  |  | 6,414,302 |  |  | 6,167,865 |  |  | 5,882,350 |  |  | 5,504,630 |  |  | 5,356,663 |
Consumer: |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  | 2,758,269 |  |  | 2,687,927 |  |  | 2,479,701 |  |  | 2,401,240 |  |  | 2,168,545 |
Home equity loans and lines and other consumer ("other consumer") |  | 252,314 |  |  | 253,184 |  |  | 260,819 |  |  | 275,962 |  |  | 295,582 |
Total consumer |  |  | 3,010,583 |  |  | 2,941,111 |  |  | 2,740,520 |  |  | 2,677,202 |  |  | 2,464,127 |
Total loans |  |  | 9,424,885 |  |  | 9,108,976 |  |  | 8,622,870 |  |  | 8,181,832 |  |  | 7,820,790 |
Deferred origination costs (fees), net |  | 7,864 |  |  | 7,301 |  |  | 9,332 |  |  | 8,282 |  |  | 7,437 |
Allowance for loan credit losses |  |  | (52,061) |  |  | (50,598) |  |  | (48,850) |  |  | (50,153) |  |  | (53,876) |
Loans receivable, net |  |  | $ | 9,380,688 |  |  | $ | 9,065,679 |  |  | $ | 8,583,352 |  |  | $ | 8,139,961 |  |  | $ | 7,774,351 |
Mortgage loans serviced for others |  | $ | 56,045 |  |  | $ | 58,089 |  |  | $ | 60,447 |  |  | $ | 64,840 |  |  | $ | 68,778 |
| At June 30, 2022 Average Yield |  |  |  |  |  |  |  |  |  |
Loan pipeline (1): |  |  |  |  |  |  |  |  |  |  |
Commercial | 4.41 | % |  | $ | 273,843 |  |  | $ | 385,986 |  |  | $ | 539,426 |  |  | $ | 482,942 |  |  | $ | 463,388 |
Residential real estate | 4.60 |  |  | 104,920 |  |  | 116,554 |  |  | 123,211 |  |  | 160,070 |  |  | 153,798 |
Other consumer | 5.50 |  |  | 6,278 |  |  | 12,814 |  |  | 8,381 |  |  | 8,420 |  |  | 11,369 |
Total | 4.48 | % |  | $ | 385,041 |  |  | $ | 515,354 |  |  | $ | 671,018 |  |  | $ | 651,432 |  |  | $ | 628,555 |

| For the Three Months Ended |
| June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30, |
| 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021 |
| Average Yield |  |  |  |  |  |  |  |  |  |  |
Loan originations: |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 4.07 | % |  | $ | 645,863 |  |  | $ | 816,517 |  |  | $ | 780,464 |  |  | $ | 585,667 |  |  | $ | 259,163 |  | (2)
Residential real estate | 3.69 |  |  | 173,365 |  |  | 192,721 |  | (3) | 195,942 |  | (3) | 174,365 |  | (3) | 173,354 |  |
Other consumer | 4.69 |  |  | 16,253 |  |  | 12,718 |  |  | 12,552 |  |  | 11,782 |  |  | 14,870 |  |
Total | 4.00 | % |  | $ | 835,481 |  |  | $ | 1,021,956 |  |  | $ | 988,958 |  |  | $ | 771,814 |  |  | $ | 447,387 |  |
Loans sold |  |  | $ | — |  |  | $ | 703 |  | (4) | $ | 649 |  |  | $ | 1,756 |  |  | $ | 29,556 |  |

(1)Loan pipeline includes loans approved but not funded.
(2)Excludes loans originated through the PPP of $13 million for the three months ended June 30, 2021.
(3)Excludes residential real estate loan pool purchases of $161.7 million, $82.2 million and $219.7 million for the three months ended March 31, 2022, December 31, 2021 and September 30, 2021, respectively.
(4)Excludes the sale of higher risk commercial loans of $12.0 million for the three months ended March 31, 2022.

DEPOSITS | At
| June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
| 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Type of Account |  |  |  |  |  |  |  |  |
Non-interest-bearing | $ | 2,312,126 |  |  | $ | 2,444,833 |  |  | $ | 2,412,056 |  |  | $ | 2,467,952 |  |  | $ | 2,505,355 |
Interest-bearing checking | 3,696,067 |  |  | 4,287,745 |  |  | 4,201,736 |  |  | 4,013,565 |  |  | 3,628,741 |
Money market | 716,782 |  |  | 811,588 |  |  | 736,090 |  |  | 816,691 |  |  | 734,320 |
Savings | 1,606,534 |  |  | 1,624,751 |  |  | 1,607,933 |  |  | 1,620,447 |  |  | 1,590,441 |
Time deposits | 1,499,975 |  |  | 887,316 |  |  | 775,001 |  |  | 855,442 |  |  | 956,429 |
Total deposits | $ | 9,831,484 |  |  | $ | 10,056,233 |  |  | $ | 9,732,816 |  |  | $ | 9,774,097 |  |  | $ | 9,415,286 |

17

OceanFirst Financial Corp.
ASSET QUALITY
(dollars in thousands)

ASSET QUALITY | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Non-performing loans: |  |  |  |  |  |  |  |  |
Commercial real estate - investor | $ | 2,609 |  |  | $ | 3,575 |  |  | $ | 3,614 |  |  | $ | 8,506 |  |  | $ | 15,211 |
Commercial real estate - owner-occupied | 8,233 |  |  | 9,632 |  |  | 11,904 |  |  | 12,524 |  |  | 12,100 |
Commercial and industrial | 364 |  |  | 2,830 |  |  | 277 |  |  | 418 |  |  | 1,635 |
Residential real estate | 5,846 |  |  | 7,047 |  |  | 6,114 |  |  | 5,505 |  |  | 6,137 |
Other consumer | 3,701 |  |  | 3,841 |  |  | 3,585 |  |  | 3,351 |  |  | 3,576 |
Total non-performing loans | 20,753 |  |  | 26,925 |  |  | 25,494 |  |  | 30,304 |  |  | 38,659 |
Other real estate owned | — |  |  | 106 |  |  | 106 |  |  | 106 |  |  | 106 |
Total non-performing assets | $ | 20,753 |  |  | $ | 27,031 |  |  | $ | 25,600 |  |  | $ | 30,410 |  |  | $ | 38,765 |
Delinquent loans 30 to 89 days | $ | 9,558 |  |  | $ | 18,691 |  |  | $ | 14,546 |  |  | $ | 7,840 |  |  | $ | 6,364 |
Troubled debt restructuring (“TDR”): |  |  |  |  |  |  |  |  |
Non-performing (included in total non-performing loans above) | $ | 10,493 |  |  | $ | 11,914 |  |  | $ | 11,311 |  |  | $ | 9,962 |  |  | $ | 10,120 |
Performing | 6,946 |  |  | 7,716 |  |  | 12,320 |  |  | 9,661 |  |  | 10,311 |
Total TDRs | $ | 17,439 |  |  | $ | 19,630 |  |  | $ | 23,631 |  |  | $ | 19,623 |  |  | $ | 20,431 |
Allowance for loan credit losses | $ | 52,061 |  |  | $ | 50,598 |  |  | $ | 48,850 |  |  | $ | 50,153 |  |  | $ | 53,876 |
Allowance for loan credit losses as a percent of total loans receivable (1) | 0.55 | % |  | 0.56 | % |  | 0.57 | % |  | 0.61 | % |  | 0.69 | %
Allowance for loan credit losses as a percent of total non-performing loans (1) | 250.86 |  |  | 187.92 |  |  | 191.61 |  |  | 165.50 |  |  | 139.36 |
Non-performing loans as a percent of total loans receivable | 0.22 |  |  | 0.30 |  |  | 0.30 |  |  | 0.37 |  |  | 0.49 |
Non-performing assets as a percent of total assets | 0.17 |  |  | 0.22 |  |  | 0.22 |  |  | 0.26 |  |  | 0.34 |
PCD loans |  |  |  |  |  |  |  |  |
PCD loans | $ | 35,227 |  |  | $ | 37,032 |  |  | $ | 41,817 |  |  | $ | 41,372 |  |  | $ | 40,064 |
Non-performing PCD loans | 3,529 |  |  | 3,745 |  |  | 6,546 |  |  | 6,960 |  |  | 6,979 |
Delinquent PCD and non-performing loans 30 to 89 days | 1,381 |  |  | 2,749 |  |  | 1,000 |  |  | 1,193 |  |  | 1,051 |
TDR PCD loans | 997 |  |  | 1,033 |  |  | 337 |  |  | 345 |  |  | 317 |
Asset quality, excluding PCD loans (2) |  |  |  |  |  |  |  |  |
Non-performing loans | 17,224 |  |  | 23,180 |  |  | 18,948 |  |  | 23,344 |  |  | 31,680 |
Non-performing assets | 17,224 |  |  | 23,286 |  |  | 19,054 |  |  | 23,450 |  |  | 31,786 |
Delinquent loans 30 to 89 days (excludes non-performing loans) | 8,177 |  |  | 15,942 |  |  | 13,546 |  |  | 6,647 |  |  | 5,313 |
TDRs | 16,442 |  |  | 18,597 |  |  | 23,294 |  |  | 19,278 |  |  | 20,114 |
Allowance for loan credit losses as a percent of total non-performing loans (1) | 302.26 | % |  | 218.28 | % |  | 257.81 | % |  | 214.84 | % |  | 170.06 | %
Non-performing loans as a percent of total loans receivable | 0.18 |  |  | 0.25 |  |  | 0.22 |  |  | 0.29 |  |  | 0.41 |
Non-performing assets as a percent of total assets | 0.14 |  |  | 0.19 |  |  | 0.16 |  |  | 0.20 |  |  | 0.28 |

(1)Loans acquired from prior bank acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $15.5 million, $16.9 million, $18.9 million, $21.3 million and $23.6 million at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively.
(2)All balances and ratios exclude PCD loans.
18

(continued)

NET LOAN (CHARGE-OFFS) RECOVERIES | For the Three Months Ended |
| June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30, |
| 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021 |
Net loan (charge-offs) recoveries: |  |  |  |  |  |  |  |  |  |
Loan charge-offs | $ | (287) |  |  | $ | (143) |  |  | $ | (92) |  |  | $ | (163) |  |  | $ | (420) |  |
Recoveries on loans | 278 |  |  | 235 |  |  | 111 |  |  | 549 |  |  | 196 |  |
Net loan (charge-offs) recoveries | $ | (9) |  |  | $ | 92 |  |  | $ | 19 |  |  | $ | 386 |  |  | $ | (224) |  |
Net loan (charge-offs) recoveries to average total loans (annualized) | — | % |  | NM* |  | NM* |  | NM* |  | 0.01 | % |
Net loan (charge-offs) recoveries detail: |  |  |  |  |  |  |  |  |  |
Commercial | $ | 154 |  |  | $ | 25 |  |  | $ | (24) |  |  | $ | (33) |  |  | $ | (304) |  |
Residential real estate | (47) |  |  | 94 |  |  | 21 |  |  | 280 |  |  | — |  |
Other consumer | (116) |  |  | (27) |  |  | 22 |  |  | 139 |  |  | 80 |  |
Net loan (charge-offs) recoveries | $ | (9) |  |  | $ | 92 |  |  | $ | 19 |  |  | $ | 386 |  |  | $ | (224) |  |

* Not meaningful as amounts are net loan recoveries.
19

OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME

| For the Three Months Ended
| June 30, |  | March 31, |  | June 30,
| 2022 |  | 2022 |  | 2021
(dollars in thousands) | Average Balance |  | Interest |  | Average Yield/ Cost (1) |  | Average Balance |  | Interest |  | Average Yield/ Cost (1) |  | Average Balance |  | Interest |  | Average Yield/ Cost (1)
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning deposits and short-term investments | $ | 67,440 |  |  | $ | 100 |  |  | 0.59 | % |  | $ | 88,826 |  |  | $ | 37 |  |  | 0.17 | % |  | $ | 992,485 |  |  | $ | 241 |  |  | 0.10 | %
Securities (2) | 1,811,869 |  |  | 8,585 |  |  | 1.90 |  |  | 1,846,452 |  |  | 8,478 |  |  | 1.86 |  |  | 1,501,484 |  |  | 6,052 |  |  | 1.62 |
Loans receivable, net (3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 6,278,465 |  |  | 65,390 |  |  | 4.18 |  |  | 6,037,639 |  |  | 58,355 |  |  | 3.92 |  |  | 5,318,436 |  |  | 54,258 |  |  | 4.09 |
Residential real estate | 2,718,787 |  |  | 22,742 |  |  | 3.35 |  |  | 2,542,655 |  |  | 21,339 |  |  | 3.36 |  |  | 2,219,425 |  |  | 19,097 |  |  | 3.44 |
Other consumer | 251,014 |  |  | 2,599 |  |  | 4.15 |  |  | 257,024 |  |  | 2,774 |  |  | 4.38 |  |  | 304,541 |  |  | 3,693 |  |  | 4.86 |
Allowance for loan credit losses, net of deferred loan costs and fees | (43,683) |  |  | — |  |  | — |  |  | (40,457) |  |  | — |  |  | — |  |  | (53,483) |  |  | — |  |  | — |
Loans receivable, net | 9,204,583 |  |  | 90,731 |  |  | 3.95 |  |  | 8,796,861 |  |  | 82,468 |  |  | 3.79 |  |  | 7,788,919 |  |  | 77,048 |  |  | 3.97 |
Total interest-earning assets | 11,083,892 |  |  | 99,416 |  |  | 3.60 |  |  | 10,732,139 |  |  | 90,983 |  |  | 3.43 |  |  | 10,282,888 |  |  | 83,341 |  |  | 3.25 |
Non-interest-earning assets | 1,168,093 |  |  |  |  |  |  | 1,215,071 |  |  |  |  |  |  | 1,256,844 |  |  |  |  |
Total assets | $ | 12,251,985 |  |  |  |  |  |  | $ | 11,947,210 |  |  |  |  |  |  | $ | 11,539,732 |  |  |  |  |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing checking | $ | 4,020,474 |  |  | 1,612 |  |  | 0.16 | % |  | $ | 4,377,368 |  |  | 2,149 |  |  | 0.20 | % |  | $ | 3,701,496 |  |  | 3,385 |  |  | 0.37 | %
Money market | 739,647 |  |  | 279 |  |  | 0.15 |  |  | 788,063 |  |  | 318 |  |  | 0.16 |  |  | 760,323 |  |  | 212 |  |  | 0.11 |
Savings | 1,639,568 |  |  | 161 |  |  | 0.04 |  |  | 1,609,415 |  |  | 125 |  |  | 0.03 |  |  | 1,581,284 |  |  | 166 |  |  | 0.04 |
Time deposits | 937,387 |  |  | 2,265 |  |  | 0.97 |  |  | 767,709 |  |  | 1,449 |  |  | 0.77 |  |  | 1,002,086 |  |  | 2,562 |  |  | 1.03 |
Total | 7,337,076 |  |  | 4,317 |  |  | 0.24 |  |  | 7,542,555 |  |  | 4,041 |  |  | 0.22 |  |  | 7,045,189 |  |  | 6,325 |  |  | 0.36 |
FHLB Advances | 538,754 |  |  | 1,647 |  |  | 1.23 |  |  | 29,433 |  |  | 35 |  |  | 0.48 |  |  | — |  |  | — |  |  | — |
Securities sold under agreements to repurchase | 103,929 |  |  | 41 |  |  | 0.16 |  |  | 117,623 |  |  | 42 |  |  | 0.14 |  |  | 135,181 |  |  | 56 |  |  | 0.17 |
Other borrowings | 194,481 |  |  | 2,614 |  |  | 5.39 |  |  | 228,522 |  |  | 2,638 |  |  | 4.68 |  |  | 228,350 |  |  | 2,944 |  |  | 5.17 |
Total borrowings | 837,164 |  |  | 4,302 |  |  | 2.06 |  |  | 375,578 |  |  | 2,715 |  |  | 2.93 |  |  | 363,531 |  |  | 3,000 |  |  | 3.31 |
Total interest-bearing liabilities | 8,174,240 |  |  | 8,619 |  |  | 0.42 |  |  | 7,918,133 |  |  | 6,756 |  |  | 0.35 |  |  | 7,408,720 |  |  | 9,325 |  |  | 0.50 |
Non-interest-bearing deposits | 2,328,124 |  |  |  |  |  |  | 2,401,797 |  |  |  |  |  |  | 2,462,203 |  |  |  |  |
Non-interest-bearing liabilities | 214,900 |  |  |  |  |  |  | 99,441 |  |  |  |  |  |  | 164,774 |  |  |  |  |
Total liabilities | 10,717,264 |  |  |  |  |  |  | 10,419,371 |  |  |  |  |  |  | 10,035,697 |  |  |  |  |
Stockholders’ equity | 1,534,721 |  |  |  |  |  |  | 1,527,839 |  |  |  |  |  |  | 1,504,035 |  |  |  |  |
Total liabilities and equity | $ | 12,251,985 |  |  |  |  |  |  | $ | 11,947,210 |  |  |  |  |  |  | $ | 11,539,732 |  |  |  |  |
Net interest income |  |  | $ | 90,797 |  |  |  |  |  |  | $ | 84,227 |  |  |  |  |  |  | $ | 74,016 |  |  |
Net interest rate spread (4) |  |  |  |  | 3.18 | % |  |  |  |  |  | 3.08 | % |  |  |  |  |  | 2.75 | %
Net interest margin (5) |  |  |  |  | 3.29 | % |  |  |  |  |  | 3.18 | % |  |  |  |  |  | 2.89 | %
Total cost of deposits (including non-interest-bearing deposits) |  |  |  |  | 0.18 | % |  |  |  |  |  | 0.16 | % |  |  |  |  |  | 0.27 | %

20

(continued)

| For the Six Months Ended June 30,
| 2022 |  | 2021
(dollars in thousands) | Average Balance |  | Interest |  | Average Yield/ Cost (1) |  | Average Balance |  | Interest |  | Average Yield/ Cost (1)
Assets: |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |
Interest-earning deposits and short-term investments | $ | 78,074 |  |  | $ | 136 |  |  | 0.35 | % |  | $ | 1,065,294 |  |  | $ | 518 |  |  | 0.10 | %
Securities (2) | 1,829,065 |  |  | 17,064 |  |  | 1.88 |  |  | 1,407,108 |  |  | 12,741 |  |  | 1.83 |
Loans receivable, net (3) |  |  |  |  |  |  |  |  |  |  |
Commercial | 6,157,060 |  |  | 123,745 |  |  | 4.05 |  |  | 5,223,714 |  |  | 107,927 |  |  | 4.17 |
Residential real estate | 2,631,208 |  |  | 44,081 |  |  | 3.35 |  |  | 2,273,332 |  |  | 39,166 |  |  | 3.45 |
Other consumer | 254,002 |  |  | 5,373 |  |  | 4.27 |  |  | 315,662 |  |  | 7,863 |  |  | 5.02 |
Allowance for loan credit losses, net of deferred loan costs and fees | (42,080) |  |  | — |  |  | — |  |  | (53,187) |  |  | — |  |  | — |
Loans receivable, net | 9,000,190 |  |  | 173,199 |  |  | 3.87 |  |  | 7,759,521 |  |  | 154,956 |  |  | 4.03 |
Total interest-earning assets | 10,907,329 |  |  | 190,399 |  |  | 3.51 |  |  | 10,231,923 |  |  | 168,215 |  |  | 3.32 |
Non-interest-earning assets | 1,191,453 |  |  |  |  |  |  | 1,257,970 |  |  |  |  |
Total assets | $ | 12,098,782 |  |  |  |  |  |  | $ | 11,489,893 |  |  |  |  |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-bearing checking | $ | 4,197,935 |  |  | 3,762 |  |  | 0.18 | % |  | $ | 3,707,398 |  |  | 7,695 |  |  | 0.42 | %
Money market | 763,721 |  |  | 596 |  |  | 0.16 |  |  | 758,986 |  |  | 579 |  |  | 0.15 |
Savings | 1,624,575 |  |  | 286 |  |  | 0.04 |  |  | 1,552,106 |  |  | 345 |  |  | 0.04 |
Time deposits | 853,017 |  |  | 3,714 |  |  | 0.88 |  |  | 1,111,000 |  |  | 6,202 |  |  | 1.13 |
Total | 7,439,248 |  |  | 8,358 |  |  | 0.23 |  |  | 7,129,490 |  |  | 14,821 |  |  | 0.42 |
FHLB Advances | 285,501 |  |  | 1,682 |  |  | 1.19 |  |  | — |  |  | — |  |  | — |
Securities sold under agreements to repurchase | 110,738 |  |  | 83 |  |  | 0.15 |  |  | 132,328 |  |  | 151 |  |  | 0.23 |
Other borrowings | 211,407 |  |  | 5,252 |  |  | 5.01 |  |  | 228,359 |  |  | 5,623 |  |  | 4.97 |
Total borrowings | 607,646 |  |  | 7,017 |  |  | 2.33 |  |  | 360,687 |  |  | 5,774 |  |  | 3.23 |
Total interest-bearing liabilities | 8,046,894 |  |  | 15,375 |  |  | 0.39 |  |  | 7,490,177 |  |  | 20,595 |  |  | 0.55 |
Non-interest-bearing deposits | 2,364,757 |  |  |  |  |  |  | 2,337,238 |  |  |  |  |
Non-interest-bearing liabilities | 155,832 |  |  |  |  |  |  | 162,647 |  |  |  |  |
Total liabilities | 10,567,483 |  |  |  |  |  |  | 9,990,062 |  |  |  |  |
Stockholders’ equity | 1,531,299 |  |  |  |  |  |  | 1,499,831 |  |  |  |  |
Total liabilities and equity | $ | 12,098,782 |  |  |  |  |  |  | $ | 11,489,893 |  |  |  |  |
Net interest income |  |  | $ | 175,024 |  |  |  |  |  |  | $ | 147,620 |  |  |
Net interest rate spread (4) |  |  |  |  | 3.12 | % |  |  |  |  |  | 2.77 | %
Net interest margin (5) |  |  |  |  | 3.24 | % |  |  |  |  |  | 2.91 | %
Total cost of deposits (including non-interest-bearing deposits) |  |  |  |  | 0.17 | % |  |  |  |  |  | 0.32 | %

(1) Average yields and costs are annualized.
(2) 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.
(3) Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held for sale and non-performing loans.
(4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average interest-earning assets.
21

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

|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Selected Financial Condition Data: |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 12,438,653 |  |  | $ | 12,164,945 |  |  | $ | 11,739,616 |  |  | $ | 11,829,688 |  |  | $ | 11,483,901 |
Debt securities available-for-sale, at estimated fair value |  | 507,276 |  |  | 546,470 |  |  | 568,255 |  |  | 314,620 |  |  | 249,330 |
Debt securities held-to-maturity, net of allowance for securities credit losses |  | 1,068,034 |  |  | 1,099,514 |  |  | 1,139,193 |  |  | 1,125,382 |  |  | 1,146,735 |
Equity investments |  | 75,269 |  |  | 93,888 |  |  | 101,155 |  |  | 101,314 |  |  | 90,917 |
Restricted equity investments, at cost |  | 76,047 |  |  | 56,704 |  |  | 53,195 |  |  | 53,017 |  |  | 52,519 |
Loans receivable, net of allowance for loan credit losses |  | 9,380,688 |  |  | 9,065,679 |  |  | 8,583,352 |  |  | 8,139,961 |  |  | 7,774,351 |
Deposits |  | 9,831,484 |  |  | 10,056,233 |  |  | 9,732,816 |  |  | 9,774,097 |  |  | 9,415,286 |
Federal Home Loan Bank advances |  | 488,750 |  |  | 75,002 |  |  | — |  |  | — |  |  | — |
Securities sold under agreements to repurchase and other borrowings |  | 300,149 |  |  | 312,178 |  |  | 347,910 |  |  | 372,179 |  |  | 370,039 |
Total stockholders’ equity |  | 1,521,432 |  |  | 1,519,334 |  |  | 1,516,553 |  |  | 1,513,249 |  |  | 1,508,789 |

|  | For the Three Months Ended,
|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Selected Operating Data: |  |  |  |  |  |  |  |  |  |
Interest income |  | $ | 99,416 |  |  | $ | 90,983 |  |  | $ | 88,457 |  |  | $ | 85,420 |  |  | $ | 83,341 |
Interest expense |  | 8,619 |  |  | 6,756 |  |  | 7,871 |  |  | 8,288 |  |  | 9,325 |
Net interest income |  | 90,797 |  |  | 84,227 |  |  | 80,586 |  |  | 77,132 |  |  | 74,016 |
Credit loss expense (benefit) |  | 1,254 |  |  | 1,851 |  |  | (1,573) |  |  | (3,179) |  |  | (6,460) |
Net interest income after credit loss expense (benefit) |  | 89,543 |  |  | 82,376 |  |  | 82,159 |  |  | 80,311 |  |  | 80,476 |
Other income (excluding net (loss) gain on equity investments) |  | 15,619 |  |  | 11,638 |  |  | 10,662 |  |  | 10,349 |  |  | 11,227 |
Net (loss) gain on equity investments |  | (8,078) |  |  | (2,786) |  |  | (1,252) |  |  | (466) |  |  | 576 |
Operating expenses (excluding merger related and branch consolidation expenses, net) |  | 57,919 |  |  | 55,128 |  |  | 57,097 |  |  | 54,434 |  |  | 51,198 |
Branch consolidation expense, net |  | 546 |  |  | 402 |  |  | 7,286 |  |  | 4,014 |  |  | 26 |
Merger related expenses |  | 196 |  |  | 1,965 |  |  | 451 |  |  | 225 |  |  | 446 |
Income before provision for income taxes |  | 38,423 |  |  | 33,733 |  |  | 26,735 |  |  | 31,521 |  |  | 40,609 |
Provision for income taxes |  | 8,940 |  |  | 7,974 |  |  | 4,078 |  |  | 7,354 |  |  | 10,054 |
Net income |  | 29,483 |  |  | 25,759 |  |  | 22,657 |  |  | 24,167 |  |  | 30,555 |
Net income attributable to non-controlling interest |  | 522 |  |  | — |  |  | — |  |  | — |  |  | — |
Net income attributable to OceanFirst Financial Corp. |  | $ | 28,961 |  |  | $ | 25,759 |  |  | $ | 22,657 |  |  | $ | 24,167 |  |  | $ | 30,555 |
Net income available to common stockholders |  | $ | 27,957 |  |  | $ | 24,755 |  |  | $ | 21,653 |  |  | $ | 23,163 |  |  | $ | 29,551 |
Diluted earnings per share |  | $ | 0.47 |  |  | $ | 0.42 |  |  | $ | 0.37 |  |  | $ | 0.39 |  |  | $ | 0.49 |
Net accretion/amortization of purchase accounting adjustments included in net interest income |  | $ | 2,196 |  |  | $ | 2,953 |  |  | $ | 3,610 |  |  | $ | 3,644 |  |  | $ | 2,835 |

22

(continued)

|  | At or For the Three Months Ended
|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Selected Financial Ratios and Other Data(1) (2): |  |  |  |  |  |  |  |  |  |
Performance Ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets (3) |  | 0.92 | % |  | 0.84 | % |  | 0.72 | % |  | 0.78 | % |  | 1.03 | %
Return on average tangible assets (3) (4) |  | 0.96 |  |  | 0.88 |  |  | 0.75 |  |  | 0.82 |  |  | 1.08 |
Return on average stockholders’ equity (3) |  | 7.31 |  |  | 6.57 |  |  | 5.65 |  |  | 6.05 |  |  | 7.88 |
Return on average tangible stockholders’ equity (3) (4) |  | 11.08 |  |  | 9.94 |  |  | 8.59 |  |  | 9.20 |  |  | 12.07 |
Stockholders’ equity to total assets |  | 12.23 |  |  | 12.49 |  |  | 12.92 |  |  | 12.79 |  |  | 13.14 |
Tangible stockholders’ equity to tangible assets (4) |  | 8.39 |  |  | 8.60 |  |  | 8.89 |  |  | 8.78 |  |  | 9.01 |
Tangible common equity to tangible assets (4) |  | 7.92 |  |  | 8.13 |  |  | 8.40 |  |  | 8.29 |  |  | 8.50 |
Net interest rate spread |  | 3.18 |  |  | 3.08 |  |  | 2.88 |  |  | 2.80 |  |  | 2.75 |
Net interest margin |  | 3.29 |  |  | 3.18 |  |  | 2.99 |  |  | 2.93 |  |  | 2.89 |
Operating expenses to average assets |  | 1.92 |  |  | 1.95 |  |  | 2.15 |  |  | 1.98 |  |  | 1.80 |
Efficiency ratio (5) |  | 59.65 |  |  | 61.77 |  |  | 72.04 |  |  | 67.43 |  |  | 60.21 |
Loans-to-deposits |  | 95.90 |  |  | 90.60 |  |  | 88.60 |  |  | 83.71 |  |  | 83.06 |

|  | For the Six Months Ended June 30,
|  | 2022 |  | 2021
Performance Ratios (Annualized): |  |  |  |
Return on average assets (3) |  | 0.88 | % |  | 1.07 | %
Return on average tangible assets (3) (4) |  | 0.92 |  |  | 1.13 |
Return on average stockholders’ equity (3) |  | 6.94 |  |  | 8.23 |
Return on average tangible stockholders’ equity (3) (4) |  | 10.52 |  |  | 12.64 |
Net interest rate spread |  | 3.12 |  |  | 2.77 |
Net interest margin |  | 3.24 |  |  | 2.91 |
Operating expenses to average assets |  | 1.94 |  |  | 1.81 |
Efficiency ratio (5) |  | 60.68 |  |  | 57.34 |

23

(continued)

|  | At or For the Three Months Ended
|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Trust and Asset Management: |  |  |  |  |  |  |  |  |  |
Wealth assets under administration and management (“AUA/M”) |  | $ | 279,222 |  |  | $ | 296,818 |  |  | $ | 287,404 |  |  | $ | 274,807 |  |  | $ | 278,785 |
Nest Egg AUA/M |  | 398,344 |  |  | 415,478 |  |  | 428,558 |  |  | 423,563 |  |  | 425,921 |
Total AUA/M |  | 677,566 |  |  | 712,296 |  |  | 715,962 |  |  | 698,370 |  |  | 704,706 |
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 |  | 25.73 |  |  | 25.58 |  |  | 25.63 |  |  | 25.47 |  |  | 25.22 |
Tangible common equity per common share at end of period (4) (5) |  | 15.96 |  |  | 15.94 |  |  | 15.93 |  |  | 15.78 |  |  | 15.58 |
Common shares outstanding at end of period |  | 59,130,236 |  | 59,388,983 |  | 59,175,046 |  | 59,417,266 |  |  | 59,834,018
Preferred shares outstanding at end of period |  | 57,370 |  |  | 57,370 |  |  | 57,370 |  |  | 57,370 |  |  | 57,370 |
Number of full-service customer facilities: |  | 38 |  |  | 38 |  |  | 47 |  |  | 58 |  |  | 58 |
Quarterly Average Balances |  |  |  |  |  |  |  |  |  |
Total securities |  | $ | 1,811,869 |  |  | $ | 1,846,452 |  |  | $ | 1,710,143 |  |  | $ | 1,542,630 |  |  | $ | 1,501,484 |
Loans receivable, net |  | 9,204,583 |  |  | 8,796,861 |  |  | 8,297,395 |  |  | 7,864,720 |  |  | 7,788,919 |
Total interest-earning assets |  | 11,083,892 |  |  | 10,732,139 |  |  | 10,706,190 |  |  | 10,461,147 |  |  | 10,282,888 |
Total goodwill and core deposit intangible |  | 522,666 |  |  | 518,106 |  |  | 519,401 |  |  | 520,765 |  |  | 522,122 |
Total assets |  | 12,251,985 |  |  | 11,947,210 |  |  | 11,953,610 |  |  | 11,738,037 |  |  | 11,539,732 |
Time deposits |  | 937,387 |  |  | 767,709 |  |  | 819,025 |  |  | 904,384 |  |  | 1,002,086 |
Total deposits (including non-interest-bearing deposits) |  | 9,665,200 |  |  | 9,944,352 |  |  | 9,937,607 |  |  | 9,699,033 |  |  | 9,507,392 |
Total borrowings |  | 837,164 |  |  | 375,578 |  |  | 361,500 |  |  | 371,189 |  |  | 363,531 |
Total interest-bearing liabilities |  | 8,174,240 |  |  | 7,918,133 |  |  | 7,831,519 |  |  | 7,494,099 |  |  | 7,408,720 |
Non-interest bearing deposits |  | 2,328,124 |  |  | 2,401,797 |  |  | 2,467,588 |  |  | 2,576,123 |  |  | 2,462,203 |
Stockholders' equity |  | 1,534,721 |  |  | 1,527,839 |  |  | 1,519,976 |  |  | 1,519,488 |  |  | 1,504,035 |
Tangible stockholders’ equity |  | 1,012,055 |  |  | 1,009,733 |  |  | 1,000,575 |  |  | 998,723 |  |  | 981,913 |
Quarterly Yields |  |  |  |  |  |  |  |  |  |
Total securities |  | 1.90 | % |  | 1.86 | % |  | 1.57 | % |  | 1.57 | % |  | 1.62 | %
Loans receivable, net |  | 3.95 |  |  | 3.79 |  |  | 3.89 |  |  | 3.98 |  |  | 3.97 |
Total interest-earning assets |  | 3.60 |  |  | 3.43 |  |  | 3.28 |  |  | 3.24 |  |  | 3.25 |
Time deposits |  | 0.97 |  |  | 0.77 |  |  | 0.84 |  |  | 0.94 |  |  | 1.03 |
Total cost of deposits (including non-interest-bearing deposits) |  | 0.18 |  |  | 0.16 |  |  | 0.20 |  |  | 0.22 |  |  | 0.27 |
Total borrowed funds |  | 2.06 |  |  | 2.93 |  |  | 3.14 |  |  | 3.11 |  |  | 3.31 |
Total interest-bearing liabilities |  | 0.42 |  |  | 0.35 |  |  | 0.40 |  |  | 0.44 |  |  | 0.50 |
Net interest spread |  | 3.18 |  |  | 3.08 |  |  | 2.88 |  |  | 2.80 |  |  | 2.75 |
Net interest margin |  | 3.29 |  |  | 3.18 |  |  | 2.99 |  |  | 2.93 |  |  | 2.89 |

(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) Ratios for each period are based on net income available to common stockholders.
(4) Tangible stockholders’ equity and tangible assets exclude intangible assets related to goodwill and core deposit intangible. Tangible common equity excludes goodwill, core deposit intangible and preferred equity. Refer to “Non-GAAP Reconciliation.”
(5) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.
24

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

|  | For the Three Months Ended
|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Core Earnings: |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders (GAAP) |  | $ | 27,957 |  |  | $ | 24,755 |  |  | $ | 21,653 |  |  | $ | 23,163 |  |  | $ | 29,551 |
Add (less) non-recurring and non-core items: |  |  |  |  |  |  |  |  |  |
Merger related expenses |  | 196 |  |  | 1,965 |  |  | 451 |  |  | 225 |  |  | 446 |
Branch consolidation expense, net (1) |  | 546 |  |  | 402 |  |  | 7,286 |  |  | 4,014 |  |  | 26 |
Net loss (gain) on equity investments |  | 8,078 |  |  | 2,786 |  |  | 1,252 |  |  | 466 |  |  | (576) |
Income tax (benefit) expense on items |  | (2,132) |  |  | (1,141) |  |  | (2,144) |  |  | (1,138) |  |  | 26 |
Core earnings (Non-GAAP) |  | $ | 34,645 |  |  | $ | 28,767 |  |  | $ | 28,498 |  |  | $ | 26,730 |  |  | $ | 29,473 |
Income tax expense |  | $ | 8,940 |  |  | $ | 7,974 |  |  | $ | 4,078 |  |  | $ | 7,354 |  |  | $ | 10,054 |
Credit loss provision (benefit) |  | 1,254 |  |  | 1,851 |  |  | (1,573) |  |  | (3,179) |  |  | (6,460) |
Income tax (benefit) expense on non-core items |  | (2,132) |  |  | (1,141) |  |  | (2,144) |  |  | (1,138) |  |  | 26 |
Core earnings PTPP (Non-GAAP) |  | $ | 46,971 |  |  | $ | 39,733 |  |  | $ | 33,147 |  |  | $ | 32,043 |  |  | $ | 33,041 |
Core earnings diluted earnings per share |  | $ | 0.59 |  |  | $ | 0.49 |  |  | $ | 0.48 |  |  | $ | 0.45 |  |  | $ | 0.49 |
Core earnings PTPP diluted earnings per share |  | $ | 0.80 |  |  | $ | 0.67 |  |  | $ | 0.56 |  |  | $ | 0.54 |  |  | $ | 0.55 |
Core Ratios (Annualized): |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 1.13 | % |  | 0.98 | % |  | 0.95 | % |  | 0.90 | % |  | 1.02 | %
Return on average tangible stockholders’ equity |  | 13.73 |  |  | 11.55 |  |  | 11.30 |  |  | 10.62 |  |  | 12.04 |
Efficiency ratio |  | 54.43 |  |  | 57.51 |  |  | 62.57 |  |  | 62.22 |  |  | 60.06 |
(1) Includes $2.0 million of gains related to the sale of two branches for the three months ended December 31, 2021.

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|  | For the Six Months Ended June 30,
|  | 2022 |  | 2021
Core Earnings: |  |  |  |
Net income available to common stockholders (GAAP) |  | $ | 52,712 |  |  | $ | 61,244 |
Add (less) non-recurring and non-core items: |  |  |  |
Merger related expenses |  | 2,161 |  |  | 827 |
Branch consolidation expense, net |  | 948 |  |  | 1,037 |
Net loss (gain) on equity investments |  | 10,864 |  |  | (8,863) |
Income tax expense (benefit) on items |  | (3,273) |  |  | 1,692 |
Core earnings (Non-GAAP) |  | $ | 63,412 |  |  | $ | 55,937 |
Income tax expense |  | $ | 16,914 |  |  | $ | 20,733 |
Credit loss provision (benefit) |  | 3,105 |  |  | (7,080) |
Income tax (benefit) expense on non-core items |  | (3,273) |  |  | 1,692 |
Core earnings PTPP (Non-GAAP) |  | $ | 86,704 |  |  | $ | 67,898 |
Core diluted earnings per share |  | $ | 1.08 |  |  | $ | 0.93 |
Core earnings PTPP diluted earnings per share |  | $ | 1.47 |  |  | $ | 1.13 |
Core Ratios (Annualized): |  |  |  |
Return on average assets |  | 1.06 | % |  | 0.98 | %
Return on average tangible stockholders’ equity |  | 12.65 |  |  | 11.55 |
Efficiency ratio |  | 55.89 |  |  | 59.21 |

26

(continued)

|  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2021
Tangible Equity: |  |  |  |  |  |  |  |  |  |
Total stockholders' equity |  | $ | 1,521,432 |  |  | $ | 1,519,334 |  |  | $ | 1,516,553 |  |  | $ | 1,513,249 |  |  | $ | 1,508,789 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 506,146 |  |  | 500,319 |  |  | 500,319 |  |  | 500,319 |  |  | 500,319 |
Core deposit intangible |  | 15,827 |  |  | 17,005 |  |  | 18,215 |  |  | 19,558 |  |  | 20,912 |
Tangible stockholders' equity |  | 999,459 |  |  | 1,002,010 |  |  | 998,019 |  |  | 993,372 |  |  | 987,558 |
Less: |  |  |  |  |  |  |  |  |  |
Preferred stock |  | 55,527 |  |  | 55,527 |  |  | 55,527 |  |  | 55,527 |  |  | 55,527 |
Tangible common equity |  | $ | 943,932 |  |  | $ | 946,483 |  |  | $ | 942,492 |  |  | $ | 937,845 |  |  | $ | 932,031 |
Tangible Assets: |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 12,438,653 |  |  | $ | 12,164,945 |  |  | $ | 11,739,616 |  |  | $ | 11,829,688 |  |  | $ | 11,483,901 |
Less: |  |  |  |  |  |  |  |  |  |
Goodwill |  | 506,146 |  |  | 500,319 |  |  | 500,319 |  |  | 500,319 |  |  | 500,319 |
Core deposit intangible |  | 15,827 |  |  | 17,005 |  |  | 18,215 |  |  | 19,558 |  |  | 20,912 |
Tangible assets |  | $ | 11,916,680 |  |  | $ | 11,647,621 |  |  | $ | 11,221,082 |  |  | $ | 11,309,811 |  |  | $ | 10,962,670 |
Tangible stockholders' equity to tangible assets |  | 8.39 | % |  | 8.60 | % |  | 8.89 | % |  | 8.78 | % |  | 9.01 | %
Tangible common equity to tangible assets |  | 7.92 | % |  | 8.13 | % |  | 8.40 | % |  | 8.29 | % |  | 8.50 | %

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SUPPLEMENTAL INFORMATION ON TRIDENT

|  | For the Three Months Ended, |  | For the Six Months Ended,
|  | June 30, 2022 |  | June 30, 2022
GAAP Measures: |  |  |  |
Net interest income |  | $ | 90,797 |  |  | $ | 175,024 |
Other income |  | 7,541 |  |  | 16,393 |
Total income |  | 98,338 |  |  | 191,417 |
Less: income attributable to Trident (1) |  | 4,510 |  |  | 4,510 |
Total income, excluding Trident |  | 93,828 |  |  | 186,907 |
Total operating expense |  | 58,661 |  |  | 116,156 |
Less: expense attributable to Trident (2) |  | 3,206 |  |  | 3,206 |
Total operating expense, excluding Trident |  | 55,455 |  |  | 112,950 |
Efficiency ratio |  | 59.65 | % |  | 60.68 | %
Efficiency ratio, excluding Trident |  | 59.10 |  |  | 60.43 |
Core Measures (non-GAAP): |  |  |  |
Net interest income |  | $ | 90,797 |  |  | $ | 175,024 |
Other income |  | 15,619 |  |  | 27,257 |
Total income |  | 106,416 |  |  | 202,281 |
Less: income attributable to Trident (1) |  | 4,510 |  |  | 4,510 |
Total core income, excluding Trident |  | 101,906 |  |  | 197,771 |
Core operating expense |  | 57,919 |  |  | 113,047 |
Less: expense attributable to Trident (2) |  | 3,206 |  |  | 3,206 |
Total operating expense, excluding Trident |  | 54,713 |  |  | 109,841 |
Core efficiency ratio |  | 54.43 | % |  | 55.89 | %
Core efficiency ratio, excluding Trident |  | 53.69 |  |  | 55.54 |

(1) Trident title-related activity is primarily included in fees and service charges in the Consolidated Statements of Income.
(2) Trident operating expenses are primarily included in compensation and employee benefits and other operating expenses in the Consolidated Statements of Income.
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