AP NEWS

OceanFirst Financial Corp. Announces Record Quarterly and Annual Financial Results

January 24, 2019

RED BANK, N.J., Jan. 24, 2019 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:”OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), today announced that net income was $26.7 million, or $0.55 per diluted share, for the quarter ended December 31, 2018, as compared to $10.0 million, or $0.30 per diluted share, for the corresponding prior year quarter. For the year ended December 31, 2018, net income was $71.9 million, or $1.51 per diluted share, as compared to $42.5 million, or $1.28 per diluted share, for the corresponding prior year period.

The results of operations for the quarter and year ended December 31, 2018 include merger related expenses, branch consolidation expenses and a reduction of income tax expense from the revaluation of the Company’s deferred tax asset as a result of the Tax Cuts and Jobs Act (“Tax Reform”). These items increased net income, net of tax, by $696,000 for the quarter and decreased net income, net of tax, by $22.2 million, for the year. Excluding these items, core earnings for the quarter and year ended December 31, 2018 were $26.0 million, or $0.54 per diluted share, and $94.1 million, or $1.98 per diluted share, respectively. (Please refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of merger related and branch consolidation expenses and the impact of Tax Reform).

Highlights for the quarter are described below:

-- Achieved record quarterly core earnings, with core diluted earnings per share increasing 20% over the corresponding prior year quarter. -- Return on average assets for the quarter ended December 31, 2018 was 1.41% and return on average tangible stockholders equity was 15.60%, while core return on average assets was 1.38% and core return on average tangible stockholders equity was 15.19%, representing increases of 27% and 14%, respectively, compared to the corresponding prior year period. -- The Company’s net interest margin increased to 3.68%, as compared to 3.64% in the prior linked quarter, and 3.42% in the comparable prior year period. -- Asset quality improved from the linked quarter as non-performing loans decreased $1.8 million, to $17.4 million, or 0.31% of total loans, and other real estate owned decreased $4.9 million, to $1.4 million.

“The Company delivered strong results for the quarter with continued growth in core earnings per share,” said Chairman and Chief Executive Officer, Christopher D. Maher. Mr. Maher added, “We are pleased to report core earnings of $26.0 million and core diluted earnings per share of $0.54. Our asset quality remains strong with declining non-performing loans and modest net charge-offs. The merger with Capital Bank of New Jersey has received regulatory approval and the approval of Capital’s shareholders and is scheduled to close on January 31, 2019. We look forward to welcoming Capital Bank customers, employees, and stockholders into the growing OceanFirst family.”

On October 25, 2018, the Company announced the execution of a definitive agreement and plan of merger (the “merger agreement”) with Capital Bank of New Jersey (“Capital Bank”). On January 23, 2019, Capital Bank received their requisite stockholder approval for the merger. Regulatory approval of the merger was received from the Office of the Comptroller of the Currency on December 19, 2018. Subject to the fulfillment of other customary closing conditions, the Company expects to close the transaction on January 31, 2019, and anticipates the full integration of Capital Bank’s branches and core operating systems in the second quarter of 2019.

The Company expects to consolidate three branches in the second quarter, primarily as a result of the merger. The branch consolidation will improve operating efficiency while also funding continued investment in commercial banking and electronic delivery channels. The Company expects to identify at least four additional branches for consolidation early in the third quarter of 2019.

The Company also announced that the Company’s Board of Directors declared its eighty-eighth consecutive quarterly cash dividend on common stock. The dividend, for the quarter ended December 31, 2018, of $0.17 per share will be paid on February 15, 2019 to stockholders of record on February 4, 2019.

Board of Directors AppointmentThe Company announced that on January 23, 2019 it appointed Grace Vallacchi, the Executive Vice President and Chief Risk Officer of the Company and the Bank, to the Boards of Directors of the Company and the Bank, effective immediately. Ms. Vallacchi will retain her Executive Vice President and Chief Risk Officer positions with the Company and the Bank, and will now report directly to Chairman, President and Chief Executive Officer Christopher D. Maher. Prior to joining OceanFirst, Ms. Vallacchi was an Associate Deputy Comptroller in the Northeastern District of the Office of the Comptroller of the Currency, where she had oversight over seven Assistant Deputy Controllers with over 180 examiners supervising 120 community banks and thrifts. Chairman and Chief Executive Officer Christopher D. Maher said, “Grace has made a tremendous impact on OceanFirst’s risk management and she will bring valuable insight to the Board. We look forward to her contributions as a Board member.”

Results of OperationsOn January 31, 2018, the Company completed its acquisition of Sun Bancorp Inc. (“Sun”) and its results of operations from February 1, 2018 through December 31, 2018 are included in the consolidated results for the quarter and year ended December 31, 2018, but are not included in the results of operations for the corresponding prior year periods.

Net income for the quarter ended December 31, 2018, was $26.7 million, or $0.55 per diluted share, as compared to $10.0 million, or $0.30 per diluted share, for the corresponding prior year period. Net income for the year ended December 31, 2018, was $71.9 million, or $1.51 per diluted share, as compared to $42.5 million, or $1.28 per diluted share, for the corresponding prior year period. Net income for the quarter and year ended December 31, 2018 included merger related expenses, branch consolidation expenses, and a reduction of income tax expense from the revaluation of deferred tax assets as a result of Tax Reform, which increased net income, net of tax, by $696,000 for the quarter and decreased net income, net of tax, by $22.2 million, for the year. Net income for the quarter and year ended December 31, 2017 included merger related expenses, branch consolidation expenses, and additional income tax expense related to Tax Reform, which decreased net income, net of tax, by $4.9 million and $13.5 million, respectively. Excluding these items, net income for the quarter and year ended December 31, 2018 increased over the prior year periods primarily due to the acquisitions of Sun and the expense savings from the successful integration during 2017 of Ocean Shore Holding Co. (“Ocean Shore”) which was acquired on November 30, 2016.

Net interest income for the quarter and year ended December 31, 2018 increased to $61.8 million and $240.5 million, respectively, as compared to $42.5 million and $169.2 million, respectively, for the same prior year periods, reflecting an increase in interest-earning assets and a higher net interest margin. Average interest-earning assets increased by $1.735 billion and $1.704 billion for the quarter and year ended December 31, 2018, respectively, as compared to the same prior year periods. The averages for the quarter and year ended December 31, 2018, were favorably impacted by $1.569 billion and $1.511 billion, respectively, of interest-earning assets acquired from Sun. Average loans receivable, net, increased by $1.626 billion and $1.505 billion for the quarter and year ended December 31, 2018, respectively, as compared to the same prior year periods. The increases attributable to the acquisition of Sun were $1.335 billion and $1.290 billion, respectively. The net interest margin for both the quarter and year ended December 31, 2018 increased to 3.68%, from 3.42% and 3.50%, respectively, for the same prior year periods. The net interest margin benefited from the accretion of purchase accounting adjustments on the Sun acquisition of $2.5 million and $10.7 million for the quarter and year ended December 31, 2018, respectively; and to a lesser extent from the impact of Federal Reserve interest rate increases. For the quarter and the year ended December 31, 2018, the cost of average interest-bearing liabilities increased to 0.80% and 0.70%, respectively, from 0.54% and 0.50%, respectively, in the corresponding prior year periods. The total cost of deposits (including non-interest bearing deposits) was 0.48% and 0.39% for the quarter and year ended December 31, 2018, respectively, as compared to 0.32% and 0.29%, respectively, for the corresponding prior year periods.

Net interest income for the quarter ended December 31, 2018, increased $337,000, as compared to the prior linked quarter, as the net interest margin increased to 3.68% for the quarter ended December 31, 2018, as compared to 3.64% for the prior linked quarter. The total cost of deposits (including non-interest bearing deposits) was 0.48% for the quarter ended December 31, 2018, as compared to 0.39% for the quarter ended September 30, 2018.

For the quarter and year ended December 31, 2018, the provision for loan losses was $506,000 and $3.5 million, respectively, as compared to $1.4 million and $4.4 million, respectively, for the corresponding prior year periods, and $907,000 in the prior linked quarter. Net loan charge-offs were $750,000 and $2.6 million for the quarter and year ended December 31, 2018, respectively, as compared to net loan charge-offs of $2.3 million and $3.9 million, respectively, in the corresponding prior year periods, and net loan charge-offs of $777,000 in the prior linked quarter. Non-performing loans totaled $17.4 million at December 31, 2018, as compared to $19.2 million at September 30, 2018, and $20.9 million at December 31, 2017.

For the quarter and year ended December 31, 2018, other income increased to $8.7 million and $34.8 million, respectively, as compared to $6.7 million and $27.1 million, respectively, for the corresponding prior year periods. The increases were primarily due to the impact of the Sun acquisition, which added $1.9 million and $8.0 million to other income for the quarter and year ended December 31, 2018, respectively, as compared to the same prior year periods. Excluding the Sun acquisition, the slight increase in other income for the quarter ended December 31, 2018, was primarily due to increases in bankcard fees and other income, partially offset by a decrease in rental income and an increase in loss from other real estate operations. For the year ended December 31, 2018, excluding the Sun acquisition, the slight decrease in other income was primarily due to an increase in the loss from real estate operations of $2.9 million, of which $1.7 million related to the year-to-date write-down and sale of a hotel, golf and banquet facility, offset by increases in bankcard fees of $852,000 and service charges of $700,000, mostly related to deposit fees, an increase in the gain on sales of loans of $568,000, mostly related to the sale of one non-performing commercial loan relationship during the first quarter of 2018 and an increase in other income of $653,000.

For the quarter ended December 31, 2018, other income increased $463,000, as compared to the prior linked quarter. The increase was primarily due to a decrease in the loss from other real estate operations of $745,000, an increase in fees and service charges of $175,000, an increase in the net unrealized gain on equity securities of $153,000, and an increase in bankcard revenue of $86,000, partially offset by the decrease in net fees on loan level interest rate swap transactions of $689,000.

Operating expenses increased to $39.1 million and $186.3 million for the quarter and year ended December 31, 2018, respectively, as compared to $27.7 million and $126.5 million, respectively, in the same prior year periods. Operating expenses for the quarter and year ended December 31, 2018 included $1.3 million and $30.1 million, respectively, of merger related and branch consolidation expenses, as compared to $1.3 million and $14.5 million, respectively, in the same prior year periods. Excluding the impact of merger and branch consolidation expenses, the increase in operating expenses over the prior year was primarily due to the Sun acquisition, which added $7.7 million and $35.2 million for the quarter and year ended December 31, 2018, respectively. Excluding the Sun acquisition, the remaining increase in operating expenses for the quarter ended December 31, 2018 over the prior year period was primarily due to increases in compensation and employee benefits expense of $844,000, service bureau expense of $658,000, marketing expense of $505,000 and occupancy expense of $453,000. Excluding the Sun acquisition, the remaining increase in operating expenses for the year ended December 31, 2018 over the prior year period was primarily due to increases in compensation and employee benefits expense of $4.0 million as a result of higher incentive and stock plan expenses, occupancy expenses of $1.6 million, service bureau expense of $1.5 million, equipment expense of $657,000, and marketing expenses of $589,000.

For the quarter ended December 31, 2018, operating expenses, excluding merger and branch consolidation expenses, increased $291,000, as compared to the prior linked quarter. The increase was primarily due to check card processing expense of $506,000 and increases in branch administration expense and equipment expense, offset by decreases in compensation and employee benefits expense of $748,000.

The provision for income taxes was $4.3 million and $13.6 million for the quarter and year ended December 31, 2018, respectively, as compared to $10.2 million and $22.9 million, respectively, for the same prior year periods. The effective tax rate was 13.8% and 15.9% for the quarter and year ended December 31, 2018, respectively, as compared to 50.6% and 35.0%, respectively, for the same prior year periods. The lower effective tax rate for the quarter and year ended December 31, 2018 was due to Tax Reform which lowered the Company’s statutory tax rate in 2018. Additionally, Tax Reform required the Company to revalue its deferred tax asset, resulting in a tax benefit of $1.9 million, for the quarter and year ended December 31, 2018, and a tax expense of $3.6 million for the quarter ended December 31, 2017. Excluding the impact of Tax Reform, the effective tax rate for the quarter and year ended December 31, 2018 was 19.8% and 18.0%, respectively, as compared to 32.5% and 29.4%, respectively for the same prior year periods.

Financial ConditionTotal assets increased by $2.100 billion to $7.516 billion at December 31, 2018, from $5.416 billion at December 31, 2017, primarily as a result of the acquisition of Sun, which added $2.044 billion to total assets. Restricted equity investments increased by $37.1 million, to $56.8 million at December 31, 2018, from $19.7 million at December 31, 2017, primarily due to the addition of Federal Reserve Bank stock as a result of converting to a national bank charter. Loans receivable, net, increased by $1.613 billion, to $5.579 billion at December 31, 2018, from $3.966 billion at December 31, 2017, primarily due to acquired loans of $1.517 billion as well as purchased loans totaling $197.0 million. As part of the acquisition of Sun, the Company’s goodwill balance increased to $338.4 million at December 31, 2018, from $150.5 million at December 31, 2017, and the core deposit intangible increased to $17.0 million at December 31, 2018, from $8.9 million at December 31, 2017.

Deposits increased by $1.472 billion, to $5.815 billion at December 31, 2018, from $4.343 billion at December 31, 2017, due to acquired deposits of $1.616 billion. The loan-to-deposit ratio at December 31, 2018 was 96.0%, as compared to 91.3% at December 31, 2017. Federal Home Loan Bank advances increased by $160.7 million, to $449.4 million at December 31, 2018, from $288.7 million at December 31, 2017 due to the acquisition of Sun and to fund loan growth.

Stockholders’ equity increased to $1.039 billion at December 31, 2018, as compared to $601.9 million at December 31, 2017. The acquisition of Sun added $402.6 million to stockholders’ equity. At December 31, 2018, there were 1.3 million shares available for repurchase under the Company’s stock repurchase programs. During the year ended December 31, 2018, the Company repurchased 459,251 shares under these repurchase programs. During 2018, the Company contributed an additional $8.4 million to the existing Employee Stock Ownership Plan. The purchased shares will be allocated to employees over the next nine years. Tangible stockholders’ equity per common share increased to $14.26 at December 31, 2018, as compared to $13.58 at December 31, 2017.

Asset QualityThe Company’s non-performing loans decreased to $17.4 million at December 31, 2018, as compared to $20.9 million at December 31, 2017. The decrease was primarily due to the sale of one commercial loan relationship during the first quarter of 2018. Non-performing loans do not include $8.9 million of purchased credit-impaired (“PCI”) loans acquired in the Sun, Ocean Shore, Cape Bancorp, Inc. (“Cape”), and Colonial American Bank (“Colonial American”) acquisitions (“Acquisition Transactions”). The Company’s other real estate owned totaled $1.4 million at December 31, 2018, as compared to $8.2 million at December 31, 2017. The decrease was primarily due to the sale of a hotel, golf, and banquet facility.

At December 31, 2018, the Company’s allowance for loan losses was 0.30% of total loans, a decrease from 0.40% at December 31, 2017. These ratios exclude existing fair value credit marks of $31.6 million at December 31, 2018 on loans acquired from the Acquisition Transactions, and $17.5 million at December 31, 2017 on loans acquired from Ocean Shore, Cape and Colonial American. These loans were acquired at fair value with no related allowance for loan losses. The allowance for loan losses as a percent of total non-performing loans was 95.2% at December 31, 2018, as compared to 75.4% at December 31, 2017.

Explanation of Non-GAAP Financial MeasuresReported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding merger related expenses, branch consolidation expenses and the impact to income tax expense related to the revaluation of deferred tax assets as required under Tax Reform, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.

Annual MeetingThe Company also announced today that its Annual Meeting of Stockholders will be held on Wednesday, May 29, 2019 at 6:00 p.m. Eastern time, at the OceanFirst Bank Administrative Offices located at 110 West Front Street, Red Bank, New Jersey. The record date for stockholders to vote at the Annual Meeting is April 10, 2019.

Conference CallAs previously announced, the Company will host an earnings conference call on Friday, January 25, 2019 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 10127192 from one hour after the end of the call until April 25, 2019. 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 N.A., founded in 1902, is a $7.5 billion regional bank operating throughout New Jersey, metropolitan Philadelphia and metropolitan New York City. OceanFirst Bank delivers commercial and residential financing solutions, wealth management and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey.

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

Forward-Looking Statements In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, 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.

OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands) December 31, 2018 September 30, 2018 December 31, 2017 ----------------- ------------------ ----------------- (Unaudited) (Unaudited) Assets Cash and due from banks $ 120,792 $ 148,362 $ 109,613 Debt securities available-for-sale, at estimated 100,717 100,015 81,581 fair value Debt securities held-to-maturity, net (estimated fair value of $832,815 at December 31, 2018, 846,810 883,540 764,062 $864,173 at September 30, 2018, and $761,660 at December 31, 2017) Equity investments, at estimated fair value 9,655 9,519 8,700 Restricted equity investments, at cost 56,784 57,143 19,724 Loans receivable, net 5,579,222 5,543,959 3,965,773 Loans held-for-sale — 732 241 Interest and dividends receivable 19,689 20,822 14,254 Other real estate owned 1,381 6,231 8,186 Premises and equipment, net 111,209 112,320 101,776 Bank Owned Life Insurance 222,482 221,190 134,847 Deferred tax asset 63,377 59,052 1,922 Assets held for sale 4,522 7,552 4,046 Other assets 24,101 36,094 41,895 Core deposit intangible 16,971 17,954 8,885 Goodwill 338,442 338,104 150,501 ------------ ---- ------------ ----- ------------ ---- Total assets $ 7,516,154 $ 7,562,589 $ 5,416,006 -- --------- ---- -- --------- ----- -- --------- ---- Liabilities and Stockholders’ Equity Deposits $ 5,814,569 $ 5,854,250 $ 4,342,798 Federal Home Loan Bank advances 449,383 456,806 288,691 Securities sold under agreements to repurchase with 61,760 61,044 79,668 retail customers Other borrowings 99,530 99,473 56,519 Advances by borrowers for taxes and insurance 14,066 16,654 11,156 Other liabilities 37,488 44,518 35,233 ------------ ---- ------------ ----- ------------ ---- Total liabilities 6,476,796 6,532,745 4,814,065 ------------ ---- ------------ ----- ------------ ---- Total stockholders’ equity 1,039,358 1,029,844 601,941 ------------ ---- ------------ ----- ------------ ---- Total liabilities and stockholders’ equity $ 7,516,154 $ 7,562,589 $ 5,416,006 -- --------- ---- -- --------- ----- -- --------- ----

OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) For the Three Months Ended, For the Year Ended --------------------------------------------- ------------------------------ December 31, September December December 31, 30, 31, 2018 2018 2017 2018 2017 ------------------- ----------- ----------- ---------------- ------------ |---------------------- (Unaudited) (Unaudited) -----------------------| Interest income: Loans $ 65,320 $ 64,497 $ 42,909 $ 249,549 $ 170,588 Mortgage-backed securities 3,947 4,105 2,919 16,034 11,108 Investment securities and other 3,091 2,780 2,078 11,071 7,133 -------------- - ---------- - Total interest income 72,358 71,382 47,906 276,654 188,829 ----------------- - --------- - --------- - -------------- - ---------- - Interest expense: Deposits 7,068 5,799 3,515 22,578 12,336 Borrowed funds 3,449 4,079 1,886 13,574 7,275 -------------- - ---------- - Total interest expense 10,517 9,878 5,401 36,152 19,611 ----------------- - --------- - --------- - -------------- - ---------- - Net interest income 61,841 61,504 42,505 240,502 169,218 Provision for loan losses 506 907 1,415 3,490 4,445 -------------- - ---------- - Net interest income after 61,335 60,597 41,090 237,012 164,773 provision for loan losses ----------------- - --------- - --------- - -------------- - ---------- - Other income: Bankcard services revenue 2,511 2,425 1,764 9,228 6,965 Wealth management revenue 524 573 528 2,245 2,150 Fees and services charges 4,910 4,735 3,891 19,461 15,058 Net gain on sales of loans 14 31 26 668 100 Net unrealized gain (loss) on 83 (70 ) — (199 ) — equity investments Net loss from other real estate (837 ) (1,582 ) (678 ) (3,812 ) (874 ) operations Income from Bank Owned Life 1,292 1,337 863 5,105 3,299 Insurance Other 251 836 351 2,131 374 -------------- - ---------- - Total other income 8,748 8,285 6,745 34,827 27,072 ----------------- - --------- - --------- - -------------- - ---------- - Operating expenses: Compensation and employee 18,946 19,694 13,961 83,135 60,100 benefits Occupancy 4,333 4,443 2,693 17,915 10,657 Equipment 2,315 2,067 1,763 8,319 6,769 Marketing 940 1,021 433 3,415 2,678 Federal deposit insurance 856 927 485 3,713 2,564 Data processing 3,318 3,125 2,040 13,286 8,849 Check card processing 1,305 799 922 4,209 3,561 Professional fees 1,217 1,066 1,094 4,963 3,995 Other operating expense 3,581 3,366 2,548 13,509 10,810 Amortization of core deposit 983 995 495 3,811 2,039 intangible Branch consolidation expense 240 1,368 (734 ) 3,151 6,205 Merger related expenses 1,048 662 1,993 26,911 8,293 -------------- - ---------- - Total operating expenses 39,082 39,533 27,693 186,337 126,520 ----------------- - --------- - --------- - -------------- - ---------- - Income before provision for 31,001 29,349 20,142 85,502 65,325 income taxes Provision for income taxes 4,269 5,278 10,186 13,570 22,855 -------------- - ---------- - Net income $ 26,732 $ 24,071 $ 9,956 $ 71,932 $ 42,470 ---------- ------ - -- ------ - -- ------ - ------ ------- - -- ------- - Basic earnings per share $ 0.56 $ 0.50 $ 0.31 $ 1.54 $ 1.32 ---------- ------ - -- ------ - -- ------ - ------ ------- - -- ------- - Diluted earnings per share $ 0.55 $ 0.50 $ 0.30 $ 1.51 $ 1.28 ---------- ------ - -- ------ - -- ------ - ------ ------- - -- ------- - Average basic shares 47,709 47,685 32,225 46,773 32,113 outstanding ----------------- - --------- - --------- - -------------- - ---------- - Average diluted shares 48,411 48,572 33,168 47,657 33,125 outstanding ----------------- - --------- - --------- - -------------- - ---------- -

OceanFirst Financial Corp. SELECTED LOAN AND DEPOSIT DATA (dollars in thousands) LOANS At RECEIVABLE ------------------------------------------------------------------------- - December September June 30, March 31, December 31, 30, 2018 2018 31, 2018 2018 2017 --------- - -- --------- - -- --------- - -- --------- - -- --------- - Commercial: Commercial and $ 304,996 $ 343,121 $ 338,436 $ 370,711 $ 187,645 industrial Commercial real estate - 740,893 735,289 717,061 763,261 569,624 owner-occupied Commercial real estate - 2,023,131 2,019,859 2,076,930 2,034,708 1,187,482 investor ---------------------------- - ------------ - ------------ - ------------ - ------------ - Total 3,069,020 3,098,269 3,132,427 3,168,680 1,944,751 commercial ---------------------------- - ------------ - ------------ - ------------ - ------------ - Consumer: Residential 2,044,523 2,020,155 2,013,389 1,882,981 1,748,925 real estate Home equity loans and 353,609 359,094 365,448 371,340 281,143 lines Other 121,561 74,555 50,952 1,844 1,295 consumer ---------------------------- - ------------ - ------------ - ------------ - ------------ - Total 2,519,693 2,453,804 2,429,789 2,256,165 2,031,363 consumer ---------------------------- - ------------ - ------------ - ------------ - ------------ - Total loans 5,588,713 5,552,073 5,562,216 5,424,845 3,976,114 Deferred origination costs, 7,086 8,707 7,510 5,752 5,380 net Allowance for loan (16,577 ) (16,821 ) (16,691 ) (16,817 ) (15,721 ) losses ---------------------------- - ------------ - ------------ - ------------ - ------------ - Loans receivable, $ 5,579,222 $ 5,543,959 $ 5,553,035 $ 5,413,780 $ 3,965,773 net ------------------ --------- - -- --------- - -- --------- - -- --------- - -- --------- - Mortgage loans $ 95,100 $ 106,369 $ 105,116 $ 109,273 $ 121,662 serviced for others At Decembe r 31, 2018 Average Yield ------ Loan pipeline (1): Commercial 5.22 % $ 129,839 $ 137,519 $ 166,178 $ 71,982 $ 53,859 Residential 4.45 49,800 64,841 64,259 73,513 43,482 real estate Home equity loans and 5.14 6,571 11,030 9,240 11,338 7,412 lines ---- - ---------------------------- - ------------ - ------------ - ------------ - ------------ - Total 5.01 % $ 186,210 $ 213,390 $ 239,677 $ 156,833 $ 104,753 ---- - ------------------ --------- - -- --------- - -- --------- - -- --------- - -- --------- -

For the Three Months Ended December 31, September June 30, March 31, December 2018 30, 2018 2018 31, 2018 2017 ----------- ----------- Average Yield ----------------------- Loan originations: Commercial 5.39 % $ 151,851 $ 136,764 $ 67,297 $ 59,150 $ 141,346 Residential 4.36 92,776 124,419 109,357 68,835 73,729 real estate Home equity loans and 5.19 15,583 17,892 20,123 14,891 18,704 lines --------------------- - ---------- ---------- ---------- ---------- ---------- Total 5.01 % $ 260,210 (2) $ 279,075 (3) $ 196,777 (5) $ 142,876 $ 233,779 --------------------- - -- ------- -- ------- -- ------- -- ------- -- ------- Loans sold $ 728 (4) $ 1,349 (4) $ 422 $ 241 (6) $ 1,422 (4)

(1) Loan pipeline includes pending loan applications and loans approved but not funded.(2) Excludes purchased loans of $49.5 million for other consumer and $753,000 for residential real estate.(3) Excludes purchased loans of $25.0 million for other consumer.(4) Excludes the sale of under-performing commercial loans of $1.7 million and under-performing residential loans of $5.1 million and $5.8 million for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, respectively.(5) Excludes purchased loans of $23.6 million for commercial, $49.0 million for residential real estate, and $49.1 million for other consumer.(6) Excludes the sale of SBA loans acquired from Sun and under-performing loans totaling $8.5 million.

DEPOSITS At ---------------------------------------------------------------------------------------- December September June 30, March 31, December 31, 30, 2018 2018 31, 2018 2018 2017 ------------------ --------- -- --------- -- --------- -- --------- -- --------- Type of Account Non-interest-bearing $ 1,151,362 $ 1,196,875 $ 1,195,980 $ 1,117,100 $ 756,513 Interest-bearing 2,350,106 2,332,215 2,265,971 2,330,682 1,954,358 checking Money market deposit 569,680 584,250 574,269 613,183 363,656 Savings 877,177 887,799 903,777 917,288 661,167 Time deposits 866,244 853,111 879,409 929,083 607,104 ---------------------------- ------------ ------------ ------------ ------------ $ 5,814,569 $ 5,854,250 $ 5,819,406 $ 5,907,336 $ 4,342,798 ------------------ --------- -- --------- -- --------- -- --------- -- ---------

OceanFirst Financial Corp. ASSET QUALITY (dollars in thousands) ASSET QUALITY December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Non-performing loans: Commercial and $ 1,587 $ 1,727 $ 1,947 $ 1,717 $ 503 industrial Commercial real estate 501 511 522 862 5,962 - owner-occupied Commercial real estate 5,024 8,082 6,364 7,994 8,281 - investor Residential real 7,389 6,390 6,858 5,686 4,190 estate Home equity loans and 2,914 2,529 2,415 1,992 1,929 lines Total non-performing 17,415 19,239 18,106 18,251 20,865 loans Other real estate 1,381 6,231 7,854 8,265 8,186 owned --------------- - ---------------- - ----------- - ------------ - --------------- - Total non-performing $ 18,796 $ 25,470 $ 25,960 $ 26,516 $ 29,051 assets -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Purchased credit-impaired $ 8,901 $ 9,700 $ 12,995 $ 14,352 $ 1,712 (“PCI”) loans -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Delinquent loans 30 to $ 25,686 $ 26,691 $ 36,010 $ 35,431 $ 20,796 89 days -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Troubled debt restructurings: Non-performing (included in total $ 3,595 $ 3,568 $ 4,190 $ 4,306 $ 8,821 non-performing loans above) Performing 22,877 24,230 24,272 33,806 33,313 --------------- - ---------------- - ----------- - ------------ - --------------- - Total troubled debt $ 26,472 $ 27,798 $ 28,462 $ 38,112 $ 42,134 restructurings -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Allowance for loan $ 16,577 $ 16,821 $ 16,691 $ 16,817 $ 15,721 losses -- ------------ - -- ------------- - -- -------- - -- --------- - -- ------------ - Allowance for loan losses as a percent of 0.30 % 0.30 % 0.30 % 0.31 % 0.40 % total loans receivable (1) Allowance for loan losses as a percent of 95.19 87.43 92.18 92.14 75.35 total non-performing loans Non-performing loans as a percent of total 0.31 0.35 0.33 0.34 0.52 loans receivable Non-performing assets as a percent of total 0.25 0.34 0.34 0.35 0.54 assets

(1) The loans acquired from Sun, Ocean Shore, Cape, and Colonial American were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for loan losses, was $31,647, $34,357, $37,679, $40,717, and $17,531 at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.

NET CHARGE-OFFS For the Three Months Ended -------------------------------------------------------------------------------------- December 31, September June 30, March 31, December 2018 30, 2018 2018 31, 2018 2017 ---------------------------- --------- ----------- --------- ----------- Net Charge-offs: Loan charge-offs $ (1,133 ) $ (891 ) $ (1,284 ) $ (533 ) $ (2,523 ) Recoveries on loans 383 114 452 258 245 -------------------------- - ------- - --------- - ------- - --------- - Net loan charge-offs $ (750 ) (1) $ (777 ) (1) $ (832 ) $ (275 ) $ (2,278 ) (1) ------------------- ------ - -- ---- - -- ------ - -- ---- - -- ------ - Net loan charge-offs to average total loans 0.05 % 0.06 % 0.06 % 0.02 % 0.23 % (annualized) -------------------------- - ------- - --------- - ------- - --------- - Net charge-off detail - (loss) recovery: Commercial $ (871 ) $ (246 ) $ (846 ) $ (10 ) $ (1,036 ) Residential mortgage 210 (478 ) (20 ) (159 ) (1,262 ) and construction Home equity loans and (62 ) (35 ) 31 (99 ) 28 lines Other consumer (27 ) (18 ) 3 (7 ) (8 ) -------------------------- - ------- - --------- - ------- - --------- - Net loan (charge-offs) $ (750 ) (1) $ (777 ) (1) $ (832 ) $ (275 ) $ (2,278 ) (1) recoveries ------------------- ------ - -- ---- - -- ------ - -- ---- - -- ------ -

(1) Included in net loan charge-offs for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017 are $243, $430, and $1,124, respectively, relating to under-performing loans sold.

OceanFirst Financial Corp. ANALYSIS OF NET INTEREST INCOME For the Three Months Ended ---------------------------------------------------------------------------------------------------------- December 31, 2018 September 30, 2018 December 31, 2017 ---------------------------------- ---------------------------------- ---------------------------------- Average Average Average (dollars in Average Interest Yield/ Average Interest Yield/ Average Interest Yield/ thousands) Balance Balance Balance Cost Cost Cost -------------- ---------- ------ -------------- ---------- ------ -------------- ---------- ------ Assets: Interest-earning assets: Interest-earning deposits and $ 103,449 $ 236 0.91 % $ 88,706 $ 172 0.77 % $ 155,987 $ 391 0.99 % short-term investments Securities (1) 1,037,039 6,802 2.60 1,080,784 6,713 2.46 874,910 4,606 2.09 Loans receivable, net (2) Commercial 3,061,999 39,045 5.06 3,101,665 38,726 4.95 1,887,319 22,087 4.64 Residential 2,036,024 20,688 4.06 2,027,880 20,438 4.03 1,743,334 17,552 4.03 Home Equity 356,088 4,656 5.19 361,127 4,628 5.08 278,294 3,243 4.62 Other 78,832 931 4.69 52,764 705 5.30 1,086 27 9.86 Allowance for loan loss net of deferred (9,198 ) — — (9,350 ) — — (11,993 ) — — loan fees Loans Receivable, 5,523,745 65,320 4.69 5,534,086 64,497 4.62 3,898,040 42,909 4.37 net ------------ - ---- - ------------ - ---- - ------------ - ---- - Total interest-earning 6,664,233 72,358 4.31 6,703,576 71,382 4.22 4,928,937 47,906 3.86 assets --------- ---- - --------- ---- - --------- ---- - Non-interest-earning 839,878 865,054 475,927 assets ------------ - ------------ - ------------ - Total assets $ 7,504,111 $ 7,568,630 $ 5,404,864 -- --------- - -- --------- - -- --------- - Liabilities and Stockholders’ Equity: Interest-bearing liabilities: Interest-bearing $ 2,407,400 3,120 0.51 % $ 2,300,270 2,313 0.40 % $ 1,944,223 1,447 0.30 % checking Money market 585,117 894 0.61 578,446 680 0.47 385,720 322 0.33 Savings 878,617 263 0.12 896,682 265 0.12 662,318 59 0.04 Time deposits 848,361 2,791 1.31 864,264 2,541 1.17 619,087 1,687 1.08 ------------ - --------- ---- - ------------ - --------- ---- - ------------ - --------- ---- - Total 4,719,495 7,068 0.59 4,639,662 5,799 0.50 3,611,348 3,515 0.39 FHLB Advances 354,296 1,930 2.16 475,536 2,542 2.12 261,018 1,146 1.74 Securities sold under agreements to 60,901 43 0.28 61,336 41 0.27 74,661 39 0.21 repurchase Other borrowings 99,431 1,476 5.89 99,438 1,496 5.97 56,475 701 4.92 ------------ - --------- ---- - ------------ - --------- ---- - ------------ - --------- ---- - Total interest-bearing 5,234,123 10,517 0.80 5,275,972 9,878 0.74 4,003,502 5,401 0.54 liabilities --------- ---- - --------- ---- - --------- ---- - Non-interest-bearing 1,177,321 1,210,650 760,552 deposits Non-interest-bearing 56,705 61,272 38,880 liabilities ------------ - ------------ - ------------ - Total liabilities 6,468,149 6,547,894 4,802,934 Stockholders’ equity 1,035,962 1,020,736 601,930 ------------ - ------------ - ------------ - Total liabilities $ 7,504,111 $ 7,568,630 $ 5,404,864 and equity -- --------- - -- --------- - -- --------- - Net interest income $ 61,841 $ 61,504 $ 42,505 -- ------ -- ------ -- ------ Net interest rate 3.51 % 3.48 % 3.32 % spread (3) ---- - ---- - ---- - Net interest margin 3.68 % 3.64 % 3.42 % (4) ---- - ---- - ---- - Total cost of deposits (including 0.48 % 0.39 % 0.32 % non-interest-bearing deposits) ---- - ---- - ---- -

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For the Year Ended ------------------------------------------------------------------------------------------------- December 31, 2018 December 31, 2017 ----------------------------------------------------- ------------------------------------------ Average Average (dollars in Average Interest Yield/ Average Interest Yield/ thousands) Balance Balance Cost Cost -------------------------------- ----------- ------ --------------------- ----------- ------ Assets: Interest-earning assets: Interest-earning deposits and $ 102,001 $ 896 0.88 % $ 179,960 $ 1,449 0.81 % short-term investments Securities (1) 1,073,454 26,209 2.44 796,392 16,792 2.11 Loans receivable, net (2) Commercial 3,012,521 149,965 4.98 1,858,842 87,706 4.72 Residential 1,965,395 79,805 4.06 1,726,020 69,784 4.04 Home Equity 357,137 17,991 5.04 282,128 13,003 4.61 Other 35,424 1,788 5.05 1,156 95 8.22 Allowance for loan loss net of deferred (9,972 ) — — (12,251 ) — — loan fees Loans Receivable, 5,360,505 249,549 4.66 3,855,895 170,588 4.42 net ------------------------------ - ---- - ------------------- - ---- - Total interest-earning 6,535,960 276,654 4.23 4,832,247 188,829 3.91 assets ---------- ---- - ---------- ---- - Non-interest-earning 828,518 459,926 assets ------------------------------ - ------------------- - Total assets $ 7,364,478 $ 5,292,173 -------------------- --------- - --------- --------- - Liabilities and Stockholders’ Equity: Interest-bearing liabilities: Interest-bearing $ 2,336,917 9,219 0.39 % $ 1,796,370 4,533 0.25 % checking Money market 571,997 2,818 0.49 410,373 1,213 0.30 Savings 877,179 990 0.11 672,315 345 0.05 Time deposits 858,978 9,551 1.11 625,847 6,245 1.00 ------------------------------ - ---------- ---- - ------------------- - ---------- ---- - Total 4,645,071 22,578 0.49 3,504,905 12,336 0.35 FHLB Advances 382,464 7,885 2.06 258,870 4,486 1.73 Securities sold under agreements to 66,340 168 0.25 74,712 121 0.16 repurchase Other borrowings 94,644 5,521 5.83 56,457 2,668 4.73 ------------------------------ - ---------- ---- - ------------------- - ---------- ---- - Total interest-bearing 5,188,519 36,152 0.70 3,894,944 19,611 0.50 liabilities ---------- ---- - ---------- ---- - Non-interest-bearing 1,135,602 776,344 deposits Non-interest-bearing 56,098 31,004 liabilities ------------------------------ - ------------------- - Total liabilities 6,380,219 4,702,292 Stockholders’ equity 984,259 589,881 ------------------------------ - ------------------- - Total liabilities $ 7,364,478 $ 5,292,173 and equity -------------------- --------- - --------- --------- - Net interest income $ 240,502 $ 169,218 -- ------- -- ------- Net interest rate 3.53 % 3.41 % spread (3) ---- - ---- - Net interest margin 3.68 % 3.50 % (4) ---- - ---- - Total cost of deposits (including 0.39 % 0.29 % non-interest-bearing deposits) ---- - ---- -

(1) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost.(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated 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 (dollars in thousands, except per share amounts) December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 -- ------------ -- ------------- -- --------- -- --------- -- ------------ Selected Financial Condition Data: Total assets $ 7,516,154 $ 7,562,589 $ 7,736,903 $ 7,494,899 $ 5,416,006 Debt securities available-for-sale, at 100,717 100,015 100,369 86,114 81,581 estimated fair value Debt securities 846,810 883,540 922,756 982,857 764,062 held-to-maturity, net Equity investments, at 9,655 9,519 9,539 9,565 8,700 estimated fair value Restricted equity 56,784 57,143 66,981 50,418 19,724 investments, at cost Loans receivable, net 5,579,222 5,543,959 5,553,035 5,413,780 3,965,773 Loans held-for-sale — 732 919 167 241 Deposits 5,814,569 5,854,250 5,819,406 5,907,336 4,342,798 Federal Home Loan Bank 449,383 456,806 674,227 341,646 288,691 advances Securities sold under agreements to repurchase 161,290 160,517 161,604 181,822 136,187 and other borrowings Stockholders’ equity 1,039,358 1,029,844 1,012,568 1,007,460 601,941

For the Three Months Ended -------------------------------------------------------------------------------------- December September June 30, March December 31, 30, 2018 31, 31, 2018 2018 2018 2017 ------------------ --------- -- --------- -- -------- -- ------ - -- -------- - Selected Operating Data: Interest income $ 72,358 $ 71,382 $ 70,078 $ 62,837 $ 47,906 Interest expense 10,517 9,878 8,631 7,126 5,401 ---------------------------- ------------ ----------- --------- - ----------- - Net interest income 61,841 61,504 61,447 55,711 42,505 Provision for loan 506 907 706 1,371 1,415 losses ---------------------------- ------------ ----------- --------- - ----------- - Net interest income after provision for 61,335 60,597 60,741 54,340 41,090 loan losses Other income 8,748 8,285 8,883 8,910 6,745 Operating expenses 37,794 37,503 42,470 38,508 26,434 Branch consolidation 240 1,368 1,719 (176 ) (734 ) expenses Merger related 1,048 662 6,715 18,486 1,993 expenses ---------------------------- ------------ ----------- --------- - ----------- - Income before provision for income 31,001 29,349 18,720 6,432 20,142 taxes Provision for income 4,269 5,278 3,018 1,005 10,186 taxes ---------------------------- ------------ ----------- --------- - ----------- - Net income $ 26,732 $ 24,071 $ 15,702 $ 5,427 $ 9,956 ------------------ --------- -- --------- -- -------- -- ------ - -- -------- - Diluted earnings per $ 0.55 $ 0.50 $ 0.32 $ 0.12 $ 0.30 share ------------------ --------- -- --------- -- -------- -- ------ - -- -------- - Net accretion/amortization of purchase accounting $ 3,918 $ 4,036 $ 4,883 $ 3,930 $ 1,956 adjustments included in net interest income ------------------ --------- -- --------- -- -------- -- ------ - -- -------- -

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At or For the Three Months Ended December 31, Septembe June March December 2018 r 30, 30, 31, 31, 2018 2018 2018 2017 --------------- ------- ------- ------- Selected Financial Ratios and Other Data(1): Performance Ratios (Annualized): Return on average assets (2) 1.41 % 1.26 % 0.84 % 0.32 % 0.73 % Return on average stockholders’ equity (2) 10.24 9.36 6.23 2.54 6.56 Return on average tangible stockholders’ equity (2) (3) 15.60 14.39 9.64 3.80 8.89 Stockholders’ equity to total assets 13.83 13.62 13.09 13.44 11.11 Tangible stockholders’ equity to tangible assets (3) 9.55 9.35 8.87 9.11 8.42 Net interest rate spread 3.51 3.48 3.57 3.58 3.32 Net interest margin 3.68 3.64 3.70 3.70 3.42 Operating expenses to average assets (2) 2.07 2.07 2.71 3.37 2.03 Efficiency ratio (2) (4) 55.37 56.65 72.38 87.92 56.23 Loans to deposits 95.95 94.70 95.42 91.65 91.32

At or For the Year Ended December 31, 2018 2017 ------- ------- Performance Ratios: Return on average assets (2) 0.98 % 0.80 % Return on average stockholders’ equity (2) 7.31 7.20 Return on average tangible stockholders’ equity (2) (3) 11.16 9.82 Net interest rate spread 3.53 3.41 Net interest margin 3.68 3.50 Operating expenses to average assets (2) 2.53 2.39 Efficiency ratio (2) (4) 67.68 64.46

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At or For the Three Months Ended ---------------------------------------------------------------------------------------------- December September June 30, March 31, December 31, 30, 31, 2018 2018 2018 2018 2017 ------------------ --------- - -- --------- - -- --------- - -- --------- - -- -------- - Wealth Management: Assets under $ 184,476 $ 209,796 $ 210,690 $ 221,493 $ 233,185 administration Per Share Data: Cash dividends $ 0.17 $ 0.15 $ 0.15 $ 0.15 $ 0.15 per common share Stockholders’ equity per 21.68 21.29 20.97 20.94 18.47 common share at end of period Tangible stockholders’ equity per 14.26 13.93 13.56 13.51 13.58 common share at end of period (3) Common shares outstanding at 47,951,168 48,382,370 48,283,500 48,105,623 32,596,893 end of period Number of full-service 59 59 59 76 46 customer facilities: Quarterly Average Balances Total securities $ 1,037,039 $ 1,080,784 $ 1,119,354 $ 1,056,774 $ 874,910 Loans, 5,523,745 5,534,086 5,425,970 4,950,007 3,898,040 receivable, net Total interest-earning 6,664,233 6,703,576 6,661,048 6,107,017 4,928,937 assets Total assets 7,504,111 7,568,630 7,532,968 6,842,693 5,404,864 Interest-bearing transaction 3,871,134 3,775,398 3,878,117 3,614,295 2,992,261 deposits Time deposits 848,361 864,264 902,091 820,834 619,087 Total borrowed 514,628 636,310 540,356 481,163 392,154 funds Total interest-bearing 5,234,123 5,275,972 5,320,564 4,916,292 4,003,502 liabilities Non-interest 1,177,321 1,210,650 1,149,764 1,004,673 760,552 bearing deposits Stockholder’s 1,035,962 1,020,736 1,011,378 866,697 601,930 equity Total deposits 5,896,816 5,850,312 5,929,972 5,439,802 4,371,900 Quarterly Yields Total securities 2.60 % 2.46 % 2.39 % 2.31 % 2.09 % Loans, 4.69 4.62 4.67 4.64 4.37 receivable, net Total interest-earning 4.31 4.22 4.22 4.17 3.86 assets Interest-bearing transaction 0.44 0.34 0.31 0.28 0.25 deposits Time deposits 1.31 1.17 1.00 0.97 1.08 Borrowed funds 2.66 2.54 2.51 2.24 1.91 Total interest-bearing 0.80 0.74 0.65 0.59 0.54 liabilities Net interest 3.51 3.48 3.57 3.58 3.32 spread Net interest 3.68 3.64 3.70 3.70 3.42 margin Total deposits 0.48 0.39 0.35 0.33 0.32

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

OceanFirst Financial Corp. OTHER ITEMS (dollars in thousands, except per share amounts) NON-GAAP RECONCILIATION For the Three Months Ended ----------------------------------------------------------------------------------------- December September June 30, March December 31, 30, 2018 31, 31, 2018 2018 2018 2017 ------------------ -------- - -- --------- - -- -------- - -- ------ - -- -------- - Core earnings: Net income $ 26,732 $ 24,071 $ 15,702 $ 5,427 $ 9,956 Merger Add: related 1,048 662 6,715 18,486 1,993 expenses Branch consolidation 240 1,368 1,719 (176 ) (734 ) expenses Income tax (benefit) expense (1,854 ) — — — 3,643 related to Tax Reform Income tax Less: (benefit) (130 ) (426 ) (1,771 ) (3,664 ) 2 expense on items Core earnings $ 26,036 $ 25,675 $ 22,365 $ 20,073 $ 14,860 ------------------ -------- - -- --------- - -- -------- - -- ------ - -- -------- - Core diluted $ 0.54 $ 0.53 $ 0.46 $ 0.45 $ 0.45 earnings per share ------------------ -------- - -- --------- - -- -------- - -- ------ - -- -------- - Core ratios (annualized): Return on average 1.38 % 1.35 % 1.19 % 1.19 % 1.09 % assets Return on average tangible 15.19 15.35 13.73 14.07 13.27 stockholders’ equity Efficiency ratio 53.54 53.74 60.39 59.59 53.67

For the Years Ended December 31, ---------------------------- 2018 2017 ------ ------ - -- ------ - Core earnings: $ 71,932 $ 42,470 Net income Add: Merger related expenses 26,911 8,293 Branch consolidation expenses 3,151 6,205 Income tax (benefit) expense related to Tax Reform (1,854 ) 3,643 Less: Income tax (benefit) expense on items (5,991 ) (4,596 ) Core earnings $ 94,149 $ 56,015 ------ ------ - -- ------ - Core diluted earnings per share $ 1.98 $ 1.70 ------ ------ - -- ------ - Core ratios: Return on average assets 1.28 % 1.06 % Return on average tangible stockholders’ equity 14.61 12.95 Efficiency ratio 56.76 57.07

COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 ------------- ------------- ------------- ------------- ------------- Total stockholders’ equity $ 1,039,358 $ 1,029,844 $ 1,012,568 $ 1,007,460 $ 601,941 Less: Goodwill 338,442 338,104 338,972 337,519 150,501 Core deposit intangible 16,971 17,954 18,949 19,950 8,885 ----------- - ----------- - ----------- - ----------- - ----------- - Tangible stockholders’ equity $ 683,945 $ 673,786 $ 654,647 $ 649,991 $ 442,555 - --------- - - --------- - - --------- - - --------- - - --------- - Total assets $ 7,516,154 $ 7,562,589 $ 7,736,903 $ 7,494,899 $ 5,416,006 Less: Goodwill 338,442 338,104 338,972 337,519 150,501 Core deposit intangible 16,971 17,954 18,949 19,950 8,885 Tangible assets $ 7,160,741 $ 7,206,531 $ 7,378,982 $ 7,137,430 $ 5,256,620 - --------- - - --------- - - --------- - - --------- - - --------- - Tangible stockholders’ equity to 9.55 % 9.35 % 8.87 % 9.11 % 8.42 % tangible assets ----------- - ----------- - ----------- - ----------- - ----------- -

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ACQUISITION DATE - FAIR VALUE BALANCE SHEET

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

At January 31, 2018 ----------------------------------------------- Purchase Estimated Sun Book Value Accounting Fair Adjustments Value -------------------- ----------- ----------- Total Purchase Price: $ 474,930 - ------- - Assets acquired: Cash and cash equivalents $ 68,632 $ — $ 68,632 Securities 254,522 — 254,522 Loans 1,541,868 (24,523 ) 1,517,345 Accrued interest receivable 5,621 — 5,621 Bank Owned Life Insurance 85,238 — 85,238 Deferred tax asset 55,710 1,864 57,574 Other assets 49,561 (6,359 ) 43,202 Core deposit intangible — 11,897 11,897 ------------------ - --------- - Total assets acquired 2,061,152 (17,121 ) 2,044,031 ------------------ - --------- - --------- - Liabilities assumed: Deposits (1,614,910 ) (1,163 ) (1,616,073) Borrowings (142,567 ) 14,840 (127,727 ) Other liabilities (14,372 ) 1,130 (13,242 ) ------------------ - --------- - --------- - Total liabilities assumed (1,771,849 ) 14,807 (1,757,042) ------------------ - --------- - --------- - Net assets acquired $ 289,303 $ (2,314 ) $ 286,989 ---------- ------- - -- ------ - - ------- - Goodwill recorded in the merger $ 187,941 - ------- -

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

Company Contact:

Michael J. FitzpatrickChief Financial OfficerOceanFirst Financial Corp.Tel: (732) 240-4500, ext. 7506Email: Mfitzpatrick@oceanfirst.com

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