RED BANK, N.J., April 28, 2022 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:"OCFC"), (the "Company"), the holding company for OceanFirst Bank N.A. (the "Bank"), announced net income available to common stockholders of $24.8 million, or $0.42 per diluted share, for the quarter ended March 31, 2022, as compared to $31.7 million, or $0.53 per diluted share, for the corresponding prior year period. Selected performance metrics are as follows (refer to "Selected Quarterly Financial Data" for additional information):

	For the Three Months Ended,
	March 31,		December 31,		March 31,
Performance Ratios (Annualized):	2022		2021		2021
Return on average assets	0.84	%	0.72	%	1.12	%
Return on average stockholders' equity	6.57		5.65		8.59
Return on average tangible stockholders' equity ^(a)	9.94		8.59		13.22
Efficiency ratio	61.77		72.04		54.73
Net interest margin	3.18		2.99		2.93

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

Core earnings¹ for the quarter ended March 31, 2022 amounted to $28.8 million, or $0.49 per diluted share. Non-core operations had an adverse impact of $4.0 million, net of tax, for the quarter ended March 31, 2022. Core earnings before income taxes and credit loss provision ("PTPP") was $39.7 million, or $0.67 per diluted share for the quarter ended March 31, 2022.

	For the Three Months Ended,
	March 31,			December 31,			March 31,
Core Ratios¹(Annualized):		2022			2021			2021
Return on average assets		0.98	%		0.95	%		0.94	%
Return on average tangible stockholders' equity		11.55			11.30			11.04
Efficiency ratio		57.51			62.57			58.37
Core diluted earnings per share	$	0.49		$	0.48		$	0.44
Core PTPP diluted earnings per share		0.67			0.56			0.58

Key developments for the recent quarter are described below:

Loan and Deposit Growth: Loan growth for the quarter was $486.1 million, reflecting record loan originations of $1.02 billion and the purchase of residential loan pools of $161.7 million. The committed loan pipeline remains strong at $515.4 million. In addition, deposits increased $323.4 million during the first quarter, while cost of deposits decreased four basis points to 0.16%, from 0.20%, in the prior linked quarter. The loans-to-deposits ratio increased to 90.60%, from 88.60%, in the prior linked quarter.
Strengthening Net Interest Income and Margin: Net interest income increased by $3.6 million to $84.2 million, from $80.6 million, in the prior linked quarter. Net interest margin increased to 3.18%, as compared to 2.99% in the prior linked quarter, largely driven by the deployment of excess liquidity to fund interest earning assets.
Expense Management: Total operating expenses decreased to $57.5 million, from $64.8 million in the prior linked quarter, and operating expenses excluding non-core operations decreased to $55.1 million from $57.1 million, for the same periods, reflecting improving trends in the Bank's cost reduction initiatives. These efforts improved the efficiency ratio to 61.77%, from 72.04%, in the prior linked quarter, and core efficiency ratio improved to 57.51%, from 62.57%, in the prior linked quarter.
Branch Consolidations: The Company completed its consolidation of 10 branches during the first quarter for a total of 77 branches consolidated since 2013. Average deposits per branch totaled $264.6 million as of March 31, 2022.

¹ ^{Core earnings and core earnings before income taxes and credit loss provision ("PTPP"), and ratios derived from them, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net branch consolidation expenses, net loss (gain) on equity investments, and the income tax effect of these items, (collectively referred to as "non-core" operations). PTPP excludes the aforementioned pre-tax "non-core" items along with income tax expense (benefit) and credit loss provision (benefit). Refer to "Explanation of Non-GAAP Financial Measures" and the "Non-GAAP Reconciliation" tables for additional information regarding our non-GAAP financial measures.}

Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company's results, "We are pleased to report strong first quarter results, including record loan originations of over $1 billion, a material expansion in net interest margin, and decreased operating expenses. The exceptional loan growth, along with increased deposits, resulted in an increased loan to deposit ratio of 90.60%. Although deposits grew, our cost of deposits decreased to 16 basis points reflecting our continued commitment to building a high quality funding base." Mr. Maher added, "As interest rates have begun to increase, our discipline regarding rate positions has protected our shareholders' tangible book value position and set the stage for continued earnings growth."

The Company's Board of Directors declared its 101^st consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.17 per share will be paid on May 20, 2022 to common stockholders of record on May 9, 2022. The Board previously declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 16, 2022 to preferred stockholders of record on April 29, 2022.

The Company completed its acquisition of a majority interest in Trident Abstract Title Agency, LLC on April 1, 2022.

Results of Operations

Net income for the quarter ended March 31, 2022 was adversely impacted by non-core operations of $4.0 million, net of tax, while net income for the quarter ended March 31, 2021 was favorably impacted by non-core operations of $5.2 million, net of tax. Core earnings for the quarter ended March 31, 2022 was $28.8 million, or $0.49 per diluted share, an increase from core earnings of $26.5 million, or $0.44 per diluted share, for the corresponding prior year period. Core earnings for the quarter ended March 31, 2022 increased from $28.5 million, or $0.48 per diluted share, for the prior linked quarter, which was adversely impacted by non-core operations of $6.8 million, net of tax.

Net Interest Income and Margin

Net interest income for the quarter ended March 31, 2022 increased to $84.2 million, as compared to $73.6 million for the corresponding prior year period, reflecting an increase in net interest margin. Average interest-earning assets increased by $551.7 million for the quarter ended March 31, 2022, as compared to the same prior year period, primarily due to loan and securities growth, which was primarily funded by the redeployment of excess cash. Average loans receivable, net of allowance for loan credit losses, increased by $1.07 billion for the quarter ended March 31, 2022, as compared to the same prior year period.

Net interest margin for the quarter ended March 31, 2022 increased to 3.18% from 2.93% for the same prior year period. Excluding the impact of purchase accounting accretion and prepayment fees of 0.12% and 0.18% for the quarters ended March 31, 2022 and 2021, respectively, net interest margin increased to 3.06% from 2.75%. Net interest margin expansion was primarily attributable to the decrease in excess balance sheet liquidity used to fund loan and securities growth. In addition, for the quarter ended March 31, 2022, the cost of average interest-bearing liabilities decreased to 0.35% from 0.60% for the corresponding prior year period, as a result of the downward repricing of deposits. The total cost of deposits (including non-interest bearing deposits) was 0.16% for the quarter ended March 31, 2022, as compared to 0.37% for the same prior year period.

Net interest income for the quarter ended March 31, 2022 increased by $3.6 million, as compared to the prior linked quarter, and net interest margin increased to 3.18%, as compared to 2.99% for the prior linked quarter. Excluding the impact of purchase accounting accretion and prepayment fees of 0.12% and 0.18% for the quarter ended March 31, 2022 and December 31, 2021, respectively, net interest margin increased to 3.06% from 2.81%. The net interest margin expansion was primarily attributable to the decrease in excess balance sheet liquidity used to fund loan and securities growth. The yield on average interest-earning assets increased to 3.43% from 3.28% in the prior linked quarter. The total cost of average interest-bearing liabilities was 0.35% for the quarter ended March 31, 2022, as compared to 0.40% in the prior linked quarter, partly due to a decrease in higher-costing time deposits.

Provision/Benefit for Credit Losses

For the quarter ended March 31, 2022, the credit loss expense was $1.9 million, as compared to a credit loss benefit of $620,000 for the corresponding prior year period and a credit loss benefit of $1.6 million in the prior linked quarter. The credit loss expense for the quarter ended March 31, 2022 was influenced by slowing prepayment rate assumptions primarily impacting the residential real estate portfolio, strong loan portfolio growth, and macro-economic forecast uncertainty related to the Russia-Ukraine war, partly offset by positive trends in the Bank's criticized and classified assets and favorable employment outlook.

Net loan recoveries were $92,000 for the quarter ended March 31, 2022, as compared to $280,000 for the corresponding prior year period and $19,000 in the prior linked quarter. Refer to "Asset Quality" section for further discussion.

Non-interest Income

For the quarter ended March 31, 2022, other income decreased to $8.9 million, as compared to $20.8 million for the corresponding prior year period. Other income for the quarters ended March 31, 2022 and 2021 included net losses of $2.8 million and net gains of $8.3 million, respectively, related to the net loss/gain on equity investments, which are considered non-core operations.

Excluding non-core operations, the decrease in other income of $910,000 for the quarter ended March 31, 2022, as compared to the corresponding prior year period, was primarily due to decreases in net gain on sales of loans of $1.7 million and Paycheck Protection Program ("PPP") loan origination referral fees of $662,000 in the prior year, partly offset by an increase in commercial loan swap income of $1.7 million.

Excluding non-core operations of $1.3 million in the prior linked quarter, other income for the quarter ended March 31, 2022 increased $976,000, primarily due to an increase in commercial loan swap income of $1.5 million.

Non-interest Expense

Operating expenses increased to $57.5 million for the quarter ended March 31, 2022, as compared to $51.7 million in the same prior year period. Operating expenses for the quarters ended March 31, 2022 and 2021 included $2.4 million and $1.4 million, respectively, of net expenses related to non-core operations.

Excluding non-core operations, the $4.8 million increase in operating expenses for the quarter ended March 31, 2022, as compared to the corresponding prior year period, was primarily due to increases in compensation and benefits expense of $2.3 million, relating to the commercial banking strategy and the commercial banking hires in expansion markets of Boston and Baltimore as well as additional hires in New Jersey, New York and Philadelphia, data processing expense of $1.7 million, as a result of the migration to a new core banking system, and occupancy expense of $683,000.

Excluding non-core operations of $7.7 million in the prior linked quarter, operating expenses for the quarter ended March 31, 2022, decreased $2.0 million, primarily due to a decrease in data processing expense of $2.0 million.

Income Tax Expense

The provision for income taxes was $8.0 million for the quarter ended March 31, 2022, as compared to $10.7 million for the same prior year period, and $4.1 million for the prior linked quarter. The effective tax rate was 23.6% for the quarter ended March 31, 2022, as compared to 24.6% for the same prior year period and 15.3% for the prior linked quarter. The lower effective tax rate in the prior linked quarter was primarily due to the allocation of more taxable income to jurisdictions other than New Jersey with lower income tax rates and other tax optimization efforts.

Financial Condition

Total assets increased by $425.3 million to $12.16 billion at March 31, 2022, from $11.74 billion at December 31, 2021. Total loans, excluding PPP loans of $15.0 million and $22.9 million at March 31, 2022 and December 31, 2021, respectively, increased by $494.0 million, to $9.09 billion at March 31, 2022, from $8.60 billion at December 31, 2021, primarily due to loan originations and purchases of $161.7 million of residential real estate loan pools. Total debt securities decreased by $61.5 million at March 31, 2022, as compared to December 31, 2021.

Deposits increased by $323.4 million to $10.06 billion at March 31, 2022, from $9.73 billion at December 31, 2021. Total deposits excluding time deposits increased by $211.1 million to $9.17 billion at March 31, 2022, from $8.96 billion at December 31, 2021, due to organic growth in all deposit categories. Time deposits increased to $887.3 million at March 31, 2022, from $775.0 million at December 31, 2021 primarily due to an increase in brokered time deposits, which were less costly than comparable term Federal Home Loan Bank ("FHLB") advances. The loans-to-deposit ratio at March 31, 2022 was 90.6%, as compared to 88.6% at December 31, 2021. FHLB advances increased to $75.0 million at March 31, 2022 from $0 at December 31, 2021 to fund loan growth. Other borrowings decreased by $34.7 million to $194.4 million at March 31, 2022, from $229.1 million at December 31, 2021, primarily due to the extinguishment of $35.0 million of subordinated debt.

Stockholders' equity was $1.52 billion at March 31, 2022 and December 31, 2021. Accumulated other comprehensive loss increased by $12.3 million to $15.2 million at March 31, 2022 from $2.8 million at December 31, 2021, primarily due to unrealized losses on debt securities available-for-sale which were impacted by higher interest rates. For the quarter ended March 31, 2022, the Company repurchased 100,444 shares under its stock repurchase programs at a weighted average cost of $21.35 and there were 3,207,217 shares available for repurchase at March 31, 2022 under the existing repurchase programs. Stockholders' equity per common share decreased to $25.58 at March 31, 2022, as compared to $25.63 at December 31, 2021. Tangible common equity per common share increased to $15.94 at March 31, 2022, as compared to $15.93 at December 31, 2021.

Asset Quality

The Company's non-performing loans increased to $26.9 million at March 31, 2022, as compared to $25.5 million at December 31, 2021. The Company's non-performing loans, excluding $3.7 million and $6.5 million of non-performing purchased with credit deterioration ("PCD") loans from prior bank acquisitions at March 31, 2022 and December 31, 2021, increased to $23.2 million at March 31, 2022, as compared to $18.9 million at December 31, 2021, primarily due to one commercial relationship of $3.2 million, which moved to non-performing loans. The allowance for loan credit losses as a percentage of total non-performing loans was 187.9% at March 31, 2022, as compared to 191.6% at December 31, 2021. The allowance for loan credit losses as a percentage of total non-performing loans, excluding PCD loans, was 218.3% at March 31, 2022, as compared to 257.8% at December 31, 2021. The level of 30 to 89 days delinquent loans expanded to $18.7 million at March 31, 2022, from $14.5 million at December 31, 2021. The level of 30 to 89 days delinquent loans, excluding non-performing and PCD loans, expanded to $15.9 million at March 31, 2022, from $13.5 million at December 31, 2021.

The Company's allowance for loan credit losses was 0.56% of total loans at March 31, 2022, as compared to 0.57% at December 31, 2021. The allowance for loan credit losses plus the unamortized credit and PCD marks amounted to $67.5 million, or 0.74% of total loans, at March 31, 2022.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with GAAP. The Company's management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations, and in some instances excluding income taxes and credit loss provision, and reporting equity and asset amounts excluding intangible assets and goodwill, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.

Annual Meeting

The Annual Meeting of Stockholders will be held on Wednesday, May 25, 2022 at 9:00 a.m. Eastern Time, as previously announced. The meeting will be held in a virtual format only. Stockholders of record are invited to participate in the live webcast of the meeting, which will offer the same rights and opportunities to participate as at an in-person meeting, using online tools to ensure access and participation. The record date for stockholders to vote at the Annual Meeting was April 6, 2022. Voting before the meeting is encouraged, even for stockholders planning to participate in the live virtual broadcast. Votes may be submitted by telephone or online according to the instructions on the proxy card or by mail. A link to the live webcast, and a replay of the event, is available by visiting oceanfirst.com - Investor Relations. Access will begin at 8:45 a.m. Eastern Time to allow time for stockholders to log-in with the control number provided on the proxy card prior to the 9:00 a.m. Eastern Time scheduled start. Eligible stockholders may also vote during the live meeting online at www.virtualshareholdermeeting.com/OCFC2022 by entering the 16-digit control number included on the proxy card or notice. Whether or not stockholders plan to attend the virtual Annual Meeting, the Company encourages all eligible stockholders to vote using proxy card materials included in the meeting materials distributed beginning April 26, 2022. As a reminder, participating in the meeting is not required to vote.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, April 29, 2022 at 11:00 a.m. Eastern Time. The direct dial number for the call is (844) 200-6205, using the access code 956037. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (866) 813-9403, access code 401866, from one hour after the end of the call until July 29, 2022. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $12.2 billion regional bank providing financial services throughout New Jersey and in the major metropolitan markets of Philadelphia, New York, Baltimore, Washington D.C., and Boston. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: the impact of the COVID-19 or any other pandemic on our operations and financial results and those of our customers, changes in interest rates, inflation, general economic conditions, levels of unemployment in the Bank's lending area, real estate market values in the Bank's lending area, future natural disasters and increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area, accounting principles and guidelines and the Bank's ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands)

	March 31,		December 31,		March 31,
		2022		2021		2021
	(Unaudited)				(Unaudited)
Assets
Cash and due from banks	$	210,919	$	204,949	$	1,173,665
Debt securities available-for-sale, at estimated fair value		546,470		568,255		268,511
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,380 at March 31, 2022, $1,467 at December 31, 2021, and $1,717 at March 31, 2021 (estimated fair value of $1,050,892 at March 31, 2022, $1,152,744 at December 31, 2021 and $1,099,745 at March 31, 2021)		1,099,514		1,139,193		1,082,326
Equity investments		93,888		101,155		50,159
Restricted equity investments, at cost		56,704		53,195		52,199
Loans receivable, net of allowance for loan credit losses of $50,598 at March 31, 2022, $48,850 at December 31, 2021 and $59,976 at March 31, 2021		9,065,679		8,583,352		7,820,590
Loans held-for-sale		—		—		43,175
Interest and dividends receivable		33,353		32,606		32,819
Other real estate owned		106		106		106
Premises and equipment, net		126,767		125,828		110,093
Bank owned life insurance		259,121		259,207		264,548
Assets held for sale		5,676		6,229		5,340
Goodwill		500,319		500,319		500,319
Core deposit intangible		17,005		18,215		22,273
Other assets		149,424		147,007		151,349
Total assets	$	12,164,945	$	11,739,616	$	11,577,472
Liabilities and Stockholders' Equity
Deposits	$	10,056,233	$	9,732,816	$	9,502,812
Federal Home Loan Bank advances		75,002		—		—
Securities sold under agreements to repurchase with retail customers		117,782		118,769		134,465
Other borrowings		194,396		229,141		228,176
Advances by borrowers for taxes and insurance		25,398		20,305		20,980
Other liabilities		176,800		122,032		192,320
Total liabilities		10,645,611		10,223,063		10,078,753
Total stockholders' equity		1,519,334		1,516,553		1,498,719
Total liabilities and stockholders' equity	$	12,164,945	$	11,739,616	$	11,577,472

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	For the Three Months Ended,
	March 31,			December 31,			March 31,
		2022			2021			2021
	\|---------------------- (Unaudited) ----------------------\|
Interest income:
Loans	$	82,468		$	81,392		$	77,908
Debt securities		7,504			5,654			5,355
Equity investments and other		1,011			1,411			1,611
Total interest income		90,983			88,457			84,874
Interest expense:
Deposits		4,041			5,010			8,496
Borrowed funds		2,715			2,861			2,774
Total interest expense		6,756			7,871			11,270
Net interest income		84,227			80,586			73,604
Credit loss expense (benefit)		1,851			(1,573	)		(620	)
Net interest income after credit loss expense (benefit)		82,376			82,159			74,224
Other income:
Bankcard services revenue		2,963			3,308			3,052
Trust and asset management revenue		609			562			599
Fees and service charges		3,060			3,314			3,737
Net gain on sales of loans		177			6			1,916
Net (loss) gain on equity investments		(2,786	)		(1,252	)		8,287
Net loss from other real estate operations		(2	)		(3	)		(8	)
Income from bank owned life insurance		2,103			2,061			1,415
Commercial loan swap income		2,781			1,323			1,111
Other		(53	)		91			726
Total other income		8,852			9,410			20,835
Operating expenses:
Compensation and employee benefits		30,695			31,006			28,366
Occupancy		5,744			5,101			5,061
Equipment		1,370			1,435			1,578
Marketing		616			614			434
Federal deposit insurance and regulatory assessments		1,890			1,733			1,864
Data processing		5,736			7,774			4,031
Check card processing		982			1,170			1,372
Professional fees		3,322			2,726			2,837
Amortization of core deposit intangible		1,210			1,343			1,395
Branch consolidation expense, net		402			7,286			1,011
Merger related expenses		1,965			451			381
Other operating expense		3,563			4,195			3,353
Total operating expenses		57,495			64,834			51,683
Income before provision for income taxes		33,733			26,735			43,376
Provision for income taxes		7,974			4,078			10,679
Net income		25,759			22,657			32,697
Dividends on preferred shares		1,004			1,004			1,004
Net income available to common stockholders	$	24,755		$	21,653		$	31,693
Basic earnings per share	$	0.42		$	0.37		$	0.53
Diluted earnings per share	$	0.42		$	0.37		$	0.53
Average basic shares outstanding		58,739			58,801			59,840
Average diluted shares outstanding		58,943			59,044			60,101

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(dollars in thousands)

LOANS RECEIVABLE			At
			March 31,			December 31,			September 30,			June 30,			March 31,
				2022			2021			2021			2021			2021
Commercial:
Commercial real estate - investor			$	4,607,880		$	4,378,061		$	3,922,983		$	3,836,230		$	3,804,351
Commercial real estate - owner-occupied				1,057,246			1,055,065			1,123,973			1,045,514			1,066,351
Commercial and industrial				502,739			449,224			457,674			474,919			498,245
Total commercial				6,167,865			5,882,350			5,504,630			5,356,663			5,368,947
Consumer:
Residential real estate				2,687,927			2,479,701			2,401,240			2,168,545			2,189,348
Home equity loans and lines and other consumer ("other consumer")				253,184			260,819			275,962			295,582			314,242
Total consumer				2,941,111			2,740,520			2,677,202			2,464,127			2,503,590
Total loans				9,108,976			8,622,870			8,181,832			7,820,790			7,872,537
Deferred origination costs (fees), net				7,301			9,332			8,282			7,437			8,029
Allowance for loan credit losses				(50,598	)		(48,850	)		(50,153	)		(53,876	)		(59,976	)
Loans receivable, net			$	9,065,679		$	8,583,352		$	8,139,961		$	7,774,351		$	7,820,590
Mortgage loans serviced for others			$	58,089		$	60,447		$	64,840		$	68,778		$	74,037
	At March 31, 2022 Average Yield
Loan pipeline ⁽¹⁾:
Commercial	4.07	%	$	385,986		$	539,426		$	482,942		$	463,388		$	154,946
Residential real estate	3.45			116,554			123,211			160,070			153,798			178,352
Other consumer	4.48			12,814			8,381			8,420			11,369			11,031
Total	3.94	%	$	515,354		$	671,018		$	651,432		$	628,555		$	344,329

	For the Three Months Ended
	March 31,					December 31,			September 30,			June 30,			March 31,
	2022					2021			2021			2021			2021
	Average Yield
Loan originations:
Commercial	3.66	%	$	816,517		$	780,464		$	585,667		$	259,163	⁽²⁾	$	547,591	⁽²⁾
Residential real estate	3.08			192,721	⁽³⁾		195,942	⁽³⁾		174,365	⁽³⁾		173,354			189,942
Other consumer	4.35			12,718			12,552			11,782			14,870			10,278
Total	3.56	%	$	1,021,956		$	988,958		$	771,814		$	447,387		$	747,811
Loans sold			$	703	⁽⁴⁾	$	649		$	1,756		$	29,556		$	67,500

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

(2) Excludes loans originated through the PPP of $13 million and $60 million for the three months ended June 30, 2021 and March 31, 2021, respectively.

(3) Excludes residential real estate loan pool purchases of $161.7 million, $82.2 million and $219.7 million for the three months ended March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

(4) Excludes the sale of higher risk commercial loans of $12.0 million for the three months ended March 31, 2022.

DEPOSITS	At
	March 31,		December 31,		September 30,		June 30,		March 31,
		2022		2021		2021		2021		2021
Type of Account
Non-interest-bearing	$	2,444,833	$	2,412,056	$	2,467,952	$	2,505,355	$	2,417,935
Interest-bearing checking		4,287,745		4,201,736		4,013,565		3,628,741		3,623,132
Money market		811,588		736,090		816,691		734,320		782,459
Savings		1,624,751		1,607,933		1,620,447		1,590,441		1,568,528
Time deposits		887,316		775,001		855,442		956,429		1,110,758
Total deposits	$	10,056,233	$	9,732,816	$	9,774,097	$	9,415,286	$	9,502,812

OceanFirst Financial Corp.

ASSET QUALITY

(dollars in thousands)

ASSET QUALITY	March 31,			December 31,			September 30,			June 30,			March 31,
ASSET QUALITY		2022			2021			2021			2021			2021
Non-performing loans:
Commercial real estate - investor	$	3,575		$	3,614		$	8,506		$	15,211		$	18,520
Commercial real estate - owner-occupied		9,632			11,904			12,524			12,100			12,345
Commercial and industrial		2,830			277			418			1,635			1,689
Residential real estate		7,047			6,114			5,505			6,137			6,422
Other consumer		3,841			3,585			3,351			3,576			3,782
Total non-performing loans		26,925			25,494			30,304			38,659			42,758
Other real estate owned		106			106			106			106			106
Total non-performing assets	$	27,031		$	25,600		$	30,410		$	38,765		$	42,864
Delinquent loans 30 to 89 days	$	18,691		$	14,546		$	7,840		$	6,364		$	18,421
Troubled debt restructuring ("TDR"):
Non-performing (included in total non-performing loans above)	$	11,914		$	11,311		$	9,962		$	10,120		$	5,107
Performing		7,716			12,320			9,661			10,311			11,466
Total TDRs	$	19,630		$	23,631		$	19,623		$	20,431		$	16,573
Allowance for loan credit losses	$	50,598		$	48,850		$	50,153		$	53,876		$	59,976
Allowance for loan credit losses as a percent of total loans receivable ⁽¹⁾		0.56	%		0.57	%		0.61	%		0.69	%		0.76	%
Allowance for loan credit losses as a percent of total non-performing loans ⁽¹⁾		187.92			191.61			165.50			139.36			140.27
Non-performing loans as a percent of total loans receivable		0.30			0.30			0.37			0.49			0.54
Non-performing assets as a percent of total assets		0.22			0.22			0.26			0.34			0.37
PCD loans
PCD loans	$	37,032		$	41,817		$	41,372		$	40,064		$	44,421
Non-performing PCD loans		3,745			6,546			6,960			6,979			8,630
Delinquent PCD loans 30 to 89 days		2,749			1,000			1,193			1,051			1,944
TDR PCD loans		1,033			337			345			317			322
Asset quality, excluding PCD loans ⁽²⁾
Non-performing loans		23,180			18,948			23,344			31,680			34,128
Non-performing assets		23,286			19,054			23,450			31,786			34,234
Delinquent loans 30 to 89 days		15,942			13,546			6,647			5,313			16,477
TDRs		18,597			23,294			19,278			20,114			16,251
Allowance for loan credit losses as a percent of total non-performing loans ⁽¹⁾		218.28	%		257.81	%		214.84	%		170.06	%		175.74	%
Non-performing loans as a percent of total loans receivable		0.25			0.22			0.29			0.41			0.43
Non-performing assets as a percent of total assets		0.19			0.16			0.20			0.28			0.30

(1) Loans acquired from prior bank acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $16.9 million, $18.9 million, $21.3 million, $23.6 million and $25.7 million at March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

(2) All balances and ratios below exclude PCD loans.

NET LOAN RECOVERIES (CHARGE-OFFS)	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2022			2021			2021			2021			2021
Net loan recoveries (charge-offs):
Loan charge-offs	$	(143	)	$	(92	)	$	(163	)	$	(420	)	$	(356	)
Recoveries on loans		235			111			549			196			636
Net loan recoveries (charge-offs)	$	92		$	19		$	386		$	(224	)	$	280
Net loan recoveries (charge-offs) to average total loans (annualized)		NM*			NM*			NM*			0.01	%		NM*
Net loan recoveries (charge-offs) detail:
Commercial	$	25		$	(24	)	$	(33	)	$	(304	)	$	126
Residential real estate		94			21			280			—			(203	)
Other consumer		(27	)		22			139			80			357
Net loan recoveries (charge-offs)	$	92		$	19		$	386		$	(224	)	$	280

* Not meaningful

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

	For the Three Months Ended
	March 31,							December 31,							March 31,
		2022							2021							2021
(dollars in thousands)	Average Balance			Interest		Average Yield/ Cost ⁽¹⁾		Average Balance			Interest		Average Yield/ Cost ⁽¹⁾		Average Balance			Interest		Average Yield/ Cost ⁽¹⁾
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments	$	88,826		$	37	0.17	%	$	698,652		$	300	0.17	%	$	1,138,911		$	277	0.10	%
Securities ⁽²⁾		1,846,452			8,478	1.86			1,710,143			6,765	1.57			1,311,683			6,689	2.07
Loans receivable, net ⁽³⁾
Commercial		6,037,639			58,355	3.92			5,635,642			57,829	4.07			5,127,940			53,670	4.24
Residential real estate		2,542,655			21,339	3.36			2,430,635			20,454	3.37			2,327,838			20,069	3.45
Other consumer		257,024			2,774	4.38			273,007			3,109	4.52			326,907			4,169	5.17
Allowance for loan credit losses, net of deferred loan costs and fees		(40,457	)		—	—			(41,889	)		—	—			(52,887	)		—	—
Loans receivable, net		8,796,861			82,468	3.79			8,297,395			81,392	3.89			7,729,798			77,908	4.09
Total interest-earning assets		10,732,139			90,983	3.43			10,706,190			88,457	3.28			10,180,392			84,874	3.38
Non-interest-earning assets		1,215,071							1,247,420							1,259,109
Total assets	$	11,947,210						$	11,953,610						$	11,439,501
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking	$	4,377,368			2,149	0.20	%	$	4,249,001			2,851	0.27	%	$	3,711,976			4,311	0.47	%
Money market		788,063			318	0.16			790,471			282	0.14			757,634			367	0.20
Savings		1,609,415			125	0.03			1,611,522			141	0.03			1,522,603			179	0.05
Time deposits		767,709			1,449	0.77			819,025			1,736	0.84			1,221,123			3,639	1.21
Total		7,542,555			4,041	0.22			7,470,019			5,010	0.27			7,213,336			8,496	0.48
FHLB Advances		29,433			35	0.48			—			—	—			—			—	—
Securities sold under agreements to repurchase		117,623			42	0.14			132,520			50	0.15			129,444			95	0.30
Other borrowings		228,522			2,638	4.68			228,980			2,811	4.87			228,368			2,679	4.76
Total borrowings		375,578			2,715	2.93			361,500			2,861	3.14			357,812			2,774	3.14
Total interest-bearing liabilities		7,918,133			6,756	0.35			7,831,519			7,871	0.40			7,571,148			11,270	0.60
Non-interest-bearing deposits		2,401,797							2,467,588							2,212,273
Non-interest-bearing liabilities		99,441							134,527							160,500
Total liabilities		10,419,371							10,433,634							9,943,921
Stockholders' equity		1,527,839							1,519,976							1,495,580
Total liabilities and equity	$	11,947,210						$	11,953,610						$	11,439,501
Net interest income				$	84,227						$	80,586						$	73,604
Net interest rate spread ⁽⁴⁾						3.08	%						2.88	%						2.78	%
Net interest margin ⁽⁵⁾						3.18	%						2.99	%						2.93	%
Total cost of deposits (including non-interest-bearing deposits)						0.16	%						0.20	%						0.37	%

(1) Average yields and costs are annualized.

(2) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost, net of allowance for securities credit losses.

(3) Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held for sale and non-performing loans.

(4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average interest-earning assets.

OceanFirst Financial Corp.

SELECTED QUARTERLY FINANCIAL DATA

(in thousands, except per share amounts)

	March 31,		December 31,		September 30,		June 30,		March 31,
		2022		2021		2021		2021		2021
Selected Financial Condition Data:
Total assets	$	12,164,945	$	11,739,616	$	11,829,688	$	11,483,901	$	11,577,472
Debt securities available-for-sale, at estimated fair value		546,470		568,255		314,620		249,330		268,511
Debt securities held-to-maturity, net of allowance for securities credit losses		1,099,514		1,139,193		1,125,382		1,146,735		1,082,326
Equity investments		93,888		101,155		101,314		90,917		50,159
Restricted equity investments, at cost		56,704		53,195		53,017		52,519		52,199
Loans receivable, net of allowance for loan credit losses		9,065,679		8,583,352		8,139,961		7,774,351		7,820,590
Deposits		10,056,233		9,732,816		9,774,097		9,415,286		9,502,812
Federal Home Loan Bank advances		75,002		—		—		—		—
Securities sold under agreements to repurchase and other borrowings		312,178		347,910		372,179		370,039		362,641
Stockholders' equity		1,519,334		1,516,553		1,513,249		1,508,789		1,498,719

	For the Three Months Ended,
	March 31,			December 31,			September 30,			June 30,			March 31,
		2022			2021			2021			2021			2021
Selected Operating Data:
Interest income	$	90,983		$	88,457		$	85,420		$	83,341		$	84,874
Interest expense		6,756			7,871			8,288			9,325			11,270
Net interest income		84,227			80,586			77,132			74,016			73,604
Credit loss expense (benefit)		1,851			(1,573	)		(3,179	)		(6,460	)		(620	)
Net interest income after credit loss expense (benefit)		82,376			82,159			80,311			80,476			74,224
Other income (excluding net (loss) gain on equity investments)		11,638			10,662			10,349			11,227			12,548
Net (loss) gain on equity investments		(2,786	)		(1,252	)		(466	)		576			8,287
Operating expenses (excluding merger related and branch consolidation expenses, net)		55,128			57,097			54,434			51,198			50,291
Branch consolidation expense, net		402			7,286			4,014			26			1,011
Merger related expenses		1,965			451			225			446			381
Income before provision for income taxes		33,733			26,735			31,521			40,609			43,376
Provision for income taxes		7,974			4,078			7,354			10,054			10,679
Net income	$	25,759		$	22,657		$	24,167		$	30,555		$	32,697
Net income available to common stockholders	$	24,755		$	21,653		$	23,163		$	29,551		$	31,693
Diluted earnings per share	$	0.42		$	0.37		$	0.39		$	0.49		$	0.53
Net accretion/amortization of purchase accounting adjustments included in net interest income	$	2,953		$	3,610		$	3,644		$	2,835		$	3,650

	At or For the Three Months Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
	2022		2021		2021		2021		2021
Selected Financial Ratios and Other Data⁽¹⁾:
Performance Ratios (Annualized):
Return on average assets ⁽²⁾	0.84	%	0.72	%	0.78	%	1.03	%	1.12	%
Return on average tangible assets^{(2) (3)}	0.88		0.75		0.82		1.08		1.18
Return on average stockholders' equity ⁽²⁾	6.57		5.65		6.05		7.88		8.59
Return on average tangible stockholders' equity ^{(2) (3)}	9.94		8.59		9.20		12.07		13.22
Stockholders' equity to total assets	12.49		12.92		12.79		13.14		12.95
Tangible stockholders' equity to tangible assets ⁽³⁾	8.60		8.89		8.78		9.01		8.83
Tangible common equity to tangible assets⁽³⁾	8.13		8.40		8.29		8.50		8.33
Net interest rate spread	3.08		2.88		2.80		2.75		2.78
Net interest margin	3.18		2.99		2.93		2.89		2.93
Operating expenses to average assets ⁽²⁾	1.95		2.15		1.98		1.80		1.83
Efficiency ratio ^{(2) (4)}	61.77		72.04		67.43		60.21		54.73
Loans-to-deposits	90.60		88.60		83.71		83.06		82.84

	At or For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2022			2021			2021			2021			2021
Trust and Asset Management:
Wealth assets under administration and management ("AUA/M")	$	296,818		$	287,404		$	274,807		$	278,785		$	274,172
Nest Egg AUA/M		415,478			428,558			423,563			425,921			410,497
Total AUA/M		712,296			715,962			698,370			704,706			684,669
Per Share Data:
Cash dividends per common share	$	0.17		$	0.17		$	0.17		$	0.17		$	0.17
Stockholders' equity per common share at end of period		25.58			25.63			25.47			25.22			24.84
Tangible common equity per common share at end of period ⁽³⁾		15.94			15.93			15.78			15.58			15.26
Common shares outstanding at end of period		59,388,983			59,175,046			59,417,266			59,834,018			60,329,504
Preferred shares outstanding at end of period		57,370			57,370			57,370			57,370			57,370
Number of full-service customer facilities:		38			47			58			58			62
Quarterly Average Balances
Total securities	$	1,846,452		$	1,710,143		$	1,542,630		$	1,501,484		$	1,311,683
Loans receivable, net		8,796,861			8,297,395			7,864,720			7,788,919			7,729,798
Total interest-earning assets		10,732,139			10,706,190			10,461,147			10,282,888			10,180,392
Total goodwill and core deposit intangible		518,106			519,401			520,765			522,122			523,499
Total assets		11,947,210			11,953,610			11,738,037			11,539,732			11,439,501
Time deposits		767,709			819,025			904,384			1,002,086			1,221,123
Total deposits (including non-interest-bearing deposits)		9,944,352			9,937,607			9,699,033			9,507,392			9,425,609
Total borrowed funds		375,578			361,500			371,189			363,531			357,812
Total interest-bearing liabilities		7,918,133			7,831,519			7,494,099			7,408,720			7,571,148
Non-interest bearing deposits		2,401,797			2,467,588			2,576,123			2,462,203			2,212,273
Stockholders' equity		1,527,839			1,519,976			1,519,488			1,504,035			1,495,580
Tangible stockholders' equity		1,009,733			1,000,575			998,723			981,913			972,081

Quarterly Yields
Total securities		1.86	%		1.57	%		1.57	%		1.62	%		2.07	%
Loans receivable, net		3.79			3.89			3.98			3.97			4.09
Total interest-earning assets		3.43			3.28			3.24			3.25			3.38
Time deposits		0.77			0.84			0.94			1.03			1.21
Total cost of deposits (including non-interest-bearing deposits)		0.16			0.20			0.22			0.27			0.37
Total borrowed funds		2.93			3.14			3.11			3.31			3.14
Total interest-bearing liabilities		0.35			0.40			0.44			0.50			0.60
Net interest spread		3.08			2.88			2.80			2.75			2.78
Net interest margin		3.18			2.99			2.93			2.89			2.93

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

(2) Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to "Non-GAAP Reconciliation."

(3) Tangible stockholders' equity and tangible assets exclude intangible assets related to goodwill and core deposit intangible. Tangible common equity excludes goodwill, core deposit intangible and preferred equity. Refer to "Non-GAAP Reconciliation."

(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
	March 31,			December 31,			September 30,			June 30,			March 31,
		2022			2021			2021			2021			2021
Core Earnings:
Net income available to common stockholders (GAAP)	$	24,755		$	21,653		$	23,163		$	29,551		$	31,693
Add (less) non-recurring and non-core items:
Merger related expenses		1,965			451			225			446			381
Branch consolidation expense, net ⁽¹⁾		402			7,286			4,014			26			1,011
Net loss (gain) on equity investments		2,786			1,252			466			(576	)		(8,287	)
Income tax (benefit) expense on items		(1,141	)		(2,144	)		(1,138	)		26			1,666
Core earnings (Non-GAAP)	$	28,767		$	28,498		$	26,730		$	29,473		$	26,464
Income tax expense		7,974			4,078			7,354			10,054			10,679
Credit loss provision (benefit)		1,851			(1,573	)		(3,179	)		(6,460	)		(620	)
Income tax (benefit) expense on non-core items		(1,141	)		(2,144	)		(1,138	)		26			1,666
Core earnings PTPP (Non-GAAP)	$	39,733		$	33,147		$	32,043		$	33,041		$	34,857
Core earnings diluted earnings per share	$	0.49		$	0.48		$	0.45		$	0.49		$	0.44
Core earnings PTPP diluted earnings per share	$	0.67		$	0.56		$	0.54		$	0.55		$	0.58

Core Ratios (Annualized):
Return on average assets		0.98	%		0.95	%		0.90	%		1.02	%		0.94	%
Return on average tangible stockholders' equity		11.55			11.30			10.62			12.04			11.04
Efficiency ratio		57.51			62.57			62.22			60.06			58.37

(1) Includes $2.0 million of gains related to the sale of two branches for the three months ended December 31, 2021.

	March 31,			December 31,			September 30,			June 30,			March 31,
		2022			2021			2021			2021			2021
Tangible Equity:
Total stockholders' equity	$	1,519,334		$	1,516,553		$	1,513,249		$	1,508,789		$	1,498,719
Less:
Goodwill		500,319			500,319			500,319			500,319			500,319
Core deposit intangible		17,005			18,215			19,558			20,912			22,273
Tangible stockholders' equity		1,002,010			998,019			993,372			987,558			976,127
Less:
Preferred stock		55,527			55,527			55,527			55,527			55,527
Tangible common equity	$	946,483		$	942,492		$	937,845		$	932,031		$	920,600

Tangible Assets:
Total assets	$	12,164,945		$	11,739,616		$	11,829,688		$	11,483,901		$	11,577,472
Less:
Goodwill		500,319			500,319			500,319			500,319			500,319
Core deposit intangible		17,005			18,215			19,558			20,912			22,273
Tangible assets	$	11,647,621		$	11,221,082		$	11,309,811		$	10,962,670		$	11,054,880

Tangible stockholders' equity to tangible assets		8.60	%		8.89	%		8.78	%		9.01	%		8.83	%
Tangible common equity to tangible assets		8.13	%		8.40	%		8.29	%		8.50	%		8.33	%

Company Contact:

Michael J. Fitzpatrick

Chief Financial Officer

OceanFirst Financial Corp.

Tel: (732) 240-4500, ext. 7506

Email: Mfitzpatrick@oceanfirst.com

OceanFirst Financial Corp. Announces First Quarter Financial Results