Market Overview

OceanFirst Financial Corp. Announces First Quarter Financial Results

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

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

Highlights for the quarter are described below.

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

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

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

Results of Operations

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

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

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

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

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

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

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

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

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

Financial Condition

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

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

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

Asset Quality

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

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, April 22, 2016 at 11:00 a.m. Eastern time.  The direct dial number for the call is (888) 338-7143.  For those unable to participate in the conference call, a replay will be available.  To access the replay, dial (877) 344-7529, Replay Conference Number 10083319 from one hour after the end of the call until July 21, 2016.  The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded in 1902, is a community bank with $2.6 billion in assets and 28 branches located in Ocean, Monmouth and Middlesex Counties, New Jersey.  The Bank delivers commercial and residential financing solutions, wealth management, and deposit services throughout the central New Jersey region and is the largest and oldest financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.'s press releases are available by visiting us at www.oceanfirst.com.

Forward-Looking Statements
           
In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence.  The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to:  changes in interest rates, general economic conditions, levels of unemployment in the Bank's lending area, real estate market values in the Bank's lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines.  These risks and uncertainties are further discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 

 

        
OceanFirst Financial Corp  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION   
(dollars in thousands, except per share amounts)  
   
 March 31, December 31, March 31,  
  2016   2015   2015   
ASSETS(unaudited)   (unaudited)  
        
Cash and due from banks$    34,261  $43,946  $34,792   
Securities available-for-sale, at estimated fair value  30,085    29,902    30,019   
Securities held-to-maturity, net (estimated fair value of
$378,613 at March 31, 2016, $397,763 at December 31, 2015,
and $449,955 at March 31, 2015, respectively)

  375,616    394,813    442,829   
Federal Home Loan Bank of New York stock, at cost  16,645    19,978    16,728   
Loans receivable, net  1,996,993    1,970,703    1,736,825   
Mortgage loans held for sale  3,386    2,697    6,020   
Interest and dividends receivable  6,036    5,860    5,474   
Other real estate owned  9,029    8,827    3,835   
Premises and equipment, net  28,322    28,419    24,868   
Servicing asset  544    589    548   
Bank Owned Life Insurance  57,868    57,549    56,494   
Deferred tax asset  16,786    17,016    15,372   
Other assets   10,485   10,691   10,337   
Core deposit intangible  310    256      
Goodwill 2,081        1,822      
        
Total assets$ 2,588,447  $ 2,593,068  $ 2,384,141   
        
LIABILITIES AND STOCKHOLDERS' EQUITY

       
              
Deposits$ 1,971,360  $ 1,916,678  $ 1,800,926   
Securities sold under agreements to
repurchase with retail customers
  83,913    75,872    65,879   
Federal Home Loan Bank advances  251,917    324,385    251,778   
Other borrowings  22,500    22,500    27,500   
Due to brokers        1,124   
Advances by borrowers for taxes and insurance  7,271    7,121    7,485   
Other liabilities 10,410   8,066   9,147   
        
Total liabilities  2,347,371    2,354,622    2,163,839   
        
Stockholders' equity:       
Preferred stock, $.01 par value,
$1,000 liquidation preference,
5,000,000 shares authorized,
no shares issued


          
Common stock, $.01 par value,
55,000,000 shares authorized, 33,566,772
shares issued and 17,358,005,
17,286,557, and 16,863,429, shares
outstanding at March 31, 2016,
December 31, 2015, and March 31, 2015,
respectively





 336   336   336   
Additional paid-in capital  271,003    269,757    266,824   
Retained earnings  231,016    229,140    220,677   
Accumulated other comprehensive loss     (5,923)  (6,241)   (6,788)  
Less: Unallocated common stock held by       
Employee Stock Ownership Plan (2,974)  (3,045)   (3,259)  
Treasury stock, 16,208,767, 16,280,215,
and 16,703,343 shares at March 31, 2016,
December 31, 2015, and March 31, 2015,
respectively


   (252,382)  (251,501)   (257,488)  
Common stock acquired by Deferred
Compensation Plan
          (305)       (314)  (307)  
Deferred Compensation Plan Liability 305   314   307   
Total stockholders' equity 241,076   238,446   220,302   
        
Total liabilities and stockholders' equity$ 2,588,447  $ 2,593,068  $ 2,384,141   





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





      
OceanFirst Financial Corp. 

SELECTED LOAN AND DEPOSIT DATA 

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

      
Commercial    4.30% $  57,571  $  53,785  $  71,944  $  58,613  $  43,786 
Residential mortgage
and construction  
    3.68    28,528    31,860    39,894    26,854    36,222 
Home equity loans
and lines
   4.46     8,082     5,481     8,859     8,059      9,333 
Total    4.13  $  94,181  $  91,126  $  120,697  $  93,526  $  89,341 



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



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



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

 0.80%  0.84%   0.85%  0.92%  0.93%
Allowance for loan losses
as a percent of total non-performing loans
  100.13    91.51    68.21    79.09    84.61 
Non-performing loans as a percent of
total loans receivable
  0.80    0.91    1.24    1.16    1.09 
Non-performing assets as a percent of total
assets
  0.97    1.05    1.08    1.01    0.97 
      



NET CHARGE-OFFS 
 For the quarter ended
 March 31,    December 31,   September 30, June 30, March 31,
 2016 2015 2015 2015 2015
Net Charge-offs:                 
Loan charge-offs$ (1,172) $ (236) $ (210) $ (331)   $ (358)
Recoveries on loans   101    19    14    146      85 
Net loan charge-offs$ (1,071) $  (217) $ (196) $ (185) $ (273)
Net loan charge-offs to
average total loans
(annualized)          

    0.21%     0.04%     0.04%     0.04%     0.06%
                  
Net charge-off detail -
(loss) recovery:
     
Commercial$ (1,073) $  12  $ (47) $  (3) $ (86)
Residential mortgage
and construction
  (24)   (117)   (51)    11    (10)
Home equity loans and lines  28    (109)   (98)   (192)   (173)
Other consumer   (2)    (3)      (1)   (4)
Net loans charged-off$ (1,071) $ (217) $ (196) $ (185) $ (273)
                  



 
OceanFirst Financial Corp. 
ANALYSIS OF NET INTEREST INCOME
  
 FOR THE THREE MONTHS ENDED,
 MARCH 31, 2016DECEMBER 31, 2015MARCH 31, 2015
 AVERAGE
BALANCE
INTERESTAVERAGE
 YIELD/
COST

AVERAGE
BALANCE
INTERESTAVERAGE
 YIELD/
COST

AVERAGE
BALANCE
INTERESTAVERAGE
 YIELD/
COST

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

(1) Amounts are recorded at average amortized cost
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.


  
OceanFirst Financial Corp. 
SELECTED QUARTERLY FINANCIAL DATA 
(in thousands, except per share amounts) 
  
 March 31,  December 31,   September 30,   June 30,

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



 For the quarter ended
 March 31, December 31, September 30, June 30,

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



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



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



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

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




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



COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS     
      
 March 31,
2016
 December 31,
2015
 September 30,
2015
 June 30,
2015
 March 31,
2015
Total stockholder's equity$  241,076  $  238,446  $  234,688  $  221,535  $  220,302 
Less:     
Goodwill  2,081    1,822    1,845       
Core deposit intangible   310     256     269       
Tangible stockholders' equity$  238,685  $  236,368  $  232,574  $  221,535  $  220,302 
                  
Total Assets$ 2,588,447  $ 2,593,068  $ 2,557,898  $ 2,395,100  $ 2,384,141 
Less:     
Goodwill  2,081    1,822    1,845       
Core deposit intangible   310     256     269       
Tangible assets$ 2,586,056  $ 2,590,990  $ 2,555,784  $ 2,395,100  $ 2,384,141 
                  
Tangible stockholders' equity to tangible assets  9.23%   9.12%   9.10%   9.25%   9.24%
                  
Net accretion/amortization of purchase accounting     
  adjustments included in net interest income$  164  $   177  $   140  $  $ 
                    
Company Contact: Michael J. Fitzpatrick Chief Financial Officer OceanFirst Financial Corp. Tel:  (732) 240-4500, ext. 7506 Fax: (732) 349-5070 Email: Mfitzpatrick@oceanfirst.com
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