RED BANK, N.J., Jan. 18, 2024 (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 $26.7 million, or $0.46 per diluted share, for the quarter ended December 31, 2023, as compared to $52.3 million, or $0.89 per diluted share, for the corresponding prior year period, and $19.7 million, or $0.33 per diluted share, for the prior linked quarter. For the year ended December 31, 2023, the Company reported net income available to common stockholders of $100.0 million, or $1.70 per diluted share, as compared to $142.6 million, or $2.42 per diluted share, for the prior year. Selected performance metrics are as follows (refer to "Selected Quarterly Financial Data" for additional information):

	For the Three Months Ended,						For the Year Ended,
Performance Ratios (Quarterly Ratios Annualized):	December 31,		September 30,		December 31,		December 31,		December 31,
Performance Ratios (Quarterly Ratios Annualized):	2023		2023		2022		2023		2022
Return on average assets	0.78	%	0.57	%	1.62	%	0.74	%	1.15	%
Return on average stockholders' equity	6.41		4.75		13.25		6.13		9.24
Return on average tangible stockholders' equity ^(a)	9.33		6.93		19.85		8.97		13.96
Return on average tangible common equity^(a)	9.81		7.29		20.97		9.44		14.76
Efficiency ratio	60.38		63.37		44.56		61.71		53.80
Net interest margin	2.82		2.91		3.64		3.02		3.37

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

Core earnings¹ for the quarter and year ended December 31, 2023 were $26.3 million and $104.7 million, respectively, or $0.45 and $1.78 per diluted share, a decrease from $39.5 million and $138.0 million, or $0.67 and $2.34 per diluted share, for the corresponding prior year periods, and an increase from $18.6 million, or $0.32 per diluted share, for the prior linked quarter.

Core earnings PTPP¹ for the quarter and year ended December 31, 2023 were $37.9 million and $156.6 million, respectively, or $0.65 and $2.66 per diluted share, as compared to $56.5 million and $190.7 million, or $0.96 and $3.24 per diluted share, for the corresponding prior year periods, and $35.0 million, or $0.59 per diluted share, for the prior linked quarter. Selected performance metrics are as follows:

	For the Three Months Ended,									For the Year Ended,
	December 31,			September 30,			December 31,			December 31,			December 31,
Core Ratios¹(Quarterly Ratios Annualized):		2023			2023			2022			2023			2022
Return on average assets		0.77	%		0.54	%		1.22	%		0.78	%		1.11	%
Return on average tangible stockholders' equity		9.20			6.54			15.01			9.39			13.50
Return on average tangible common equity		9.67			6.88			15.86			9.89			14.28
Efficiency ratio		60.02			64.29			50.78			60.61			54.21
Core diluted earnings per share	$	0.45		$	0.32		$	0.67		$	1.78		$	2.34
Core PTPP diluted earnings per share		0.65			0.59			0.96			2.66			3.24

Key developments for the recent quarter are described below:

Deposits: Total deposits remained stable decreasing less than 1% for the quarter to $10.4 billion, and grew 8% for the year. Additionally, the loan-to-deposit ratio was 97.70% at December 31, 2023.
Capital: The Company's estimated common equity tier 1 capital ratio increased to 10.88%, as compared to 9.93% in the prior year. Book value and tangible book value per share were $27.96 and $18.35, respectively, increasing $1.15 and $1.27 from the prior year.²
Expenses: Non-interest expense decreased by 7% to $60.2 million from the prior linked quarter and remained relatively flat compared to the prior year period. Non-interest expense included a $1.7 million FDIC special assessment charge in the current quarter.

Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company's results, "We are pleased to report on our current quarter results; rounding out the year positively and executing on our strategies to improve operating expenses, diversify and strengthen our deposit base, and bolster our capital position during a tumultuous year for the industry." Mr. Maher added, "As we turn to 2024, the Company is well positioned to create shareholder value and will remain focused on high quality growth, expense discipline, and prudent balance sheet management."

The Company's Board of Directors declared its 108th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on February 16, 2024 to common stockholders of record on February 5, 2024. The Company's Board of Directors also 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 February 15, 2024 to preferred stockholders of record on January 31, 2024.

_{¹ Core earnings and core earnings before income taxes and provision for credit losses ("PTPP or Pre-Tax-Pre-Provision"), and ratios derived therefrom, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net branch consolidation expense (benefit), net (gain) loss on equity investments, net loss on sale of investments, Federal Deposit Insurance Corporation ("FDIC") special assessment, 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 provision for credit losses (benefit). Refer to "Explanation of Non-GAAP Financial Measures" and the "Non-GAAP Reconciliation" tables for additional information regarding non-GAAP financial measures.}

_{^² Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures and exclude the impact of intangible assets, goodwill, and preferred equity from both stockholders' equity and total assets. Refer to "Explanation of Non-GAAP Financial Measures" and the "Non-GAAP Reconciliation" tables for additional information regarding non-GAAP financial measures.}

Results of Operations

The current quarter results were impacted by the following matters. Net interest income and margin were adversely impacted by a continued mix-shift to and repricing of higher cost deposits that outpaced the increase in yields on interest-earning assets. Deposit betas increased modestly to 38%, from 35% in the prior linked quarter.³ Operating expenses included a special assessment charge of $1.7 million related to the Federal Deposit Insurance Corporation's final rule to recover the loss to the Deposit Insurance Fund in 2023. Additionally, operating expenses reflect the net realization of the Company's performance improvement initiatives and strategic investments made over the past year.

_{³ Deposit beta measures the change in the interest rates paid for interest-bearing deposit accounts versus the change in the federal funds target rate. Represents the deposit beta for total deposits (interest-bearing and non-interest bearing) for the current rate cycle (since December 31, 2021).}

Net Interest Income and Margin

Quarter ended December 31, 2023 vs. December 31, 2022

Net interest income decreased to $87.8 million, from $106.5 million, primarily reflecting the net impact of the higher interest rate environment.

Net interest margin decreased to 2.82%, from 3.64%. Excluding the impact of purchase accounting accretion and prepayment fees of 0.05% and 0.10% for the respective quarters, net interest margin decreased to 2.77%, from 3.54%. Net interest margin decreased primarily due to the increase in cost of funds outpacing the increase in yield on average interest earning assets.

Average interest-earning assets increased by $743.2 million, primarily driven by increases of $326.8 million in interest-earning deposits and short-term investments and $318.1 million in total loans. The yield on average interest earning assets increased to 5.16%, from 4.46%.

The cost of average interest-bearing liabilities increased to 2.91%, from 1.09%, primarily due to higher cost of deposits. The total cost of deposits (including non-interest bearing deposits) increased to 2.22%, from 0.53%.

Year ended December 31, 2023 vs. December 31, 2022

Net interest income decreased to $369.7 million, from $377.5 million, reflecting the net impact of the higher interest rate environment.

Net interest margin decreased to 3.02%, from 3.37%. Excluding the impact of purchase accounting accretion and prepayment fees of 0.05% and 0.11% for the respective years, net interest margin decreased to 2.97%, from 3.26%.

Average interest-earning assets increased by $1.06 billion, primarily driven by increases in total loans of $693.2 million and interest-earning deposits and short-term investments of $254.6 million. The yield on average interest earning assets increased to 4.96%, from 3.85%.

The cost of average interest-bearing liabilities increased to 2.45%, from 0.65%, primarily due to higher cost of deposits and Federal Home Loan Bank ("FHLB") advances. The total cost of deposits (including non-interest bearing deposits) increased to 1.68%, from 0.31%.

Quarter ended December 31, 2023 vs. September 30, 2023

Net interest income decreased by $3.2 million, reflecting a decrease in net interest margin to 2.82%, from 2.91%, as the increase in cost of funds outpaced the increase in yield of average interest earning assets. Excluding the impact of purchase accounting accretion and prepayment fees of 0.05% and 0.06% for the respective quarters, net interest margin decreased to 2.77%, from 2.85%.

Average interest-earning assets decreased by $35.7 million, while the yield on average interest-earning assets increased to 5.16%, from 5.08%.

The total cost of average interest-bearing liabilities increased to 2.91%, from 2.71%, primarily due to higher cost of deposits. Total cost of deposits (including non-interest bearing deposits) increased to 2.22%, from 1.99%. Average interest-bearing liabilities increased $30.6 million, primarily due to an increase in total deposits, partially offset by a decrease in FHLB advances.

Provision for Credit Losses

Provision for credit losses for the quarter and year ended December 31, 2023, was $3.2 million and $17.7 million, respectively, as compared to $3.6 million and $7.8 million for the corresponding prior year periods, and $10.3 million in the prior linked quarter. The current quarter provision was impacted by the net effect of credit rating migrations, declines in prepayment assumptions, and use of an external downside macro-economic forecast scenario.

Net loan charge-offs were $35,000 and $8.4 million for the quarter and year ended December 31, 2023, respectively. Net loan recoveries were $5,000 and $340,000 for the quarter and year ended December 31, 2022, respectively. Net loan charge-offs were $8.3 million in the prior linked quarter, which primarily related to a partial charge-off of $8.4 million on a single credit relationship. Refer to "Asset Quality" section for further discussion.

Non-interest Income

Quarter ended December 31, 2023 vs. December 31, 2022

Other income decreased to $11.9 million, as compared to $27.6 million. Other income was favorably impacted by non-core operations of $2.2 million and $17.2 million, for the respective quarters, related to net gains on equity investments, which included a $17.5 million unrealized gain on the Company's investment in Auxilior Capital Partners, Inc. in the prior year.

Excluding non-core operations, other income decreased $679,000. The primary driver was a decrease in commercial loan swap income of $490,000, which was adversely impacted by the current interest rate environment resulting in lower swap volume.

Year ended December 31, 2023 vs. December 31, 2022

Other income decreased to $33.6 million, as compared to $59.1 million. Other income was adversely impacted by non-core operations of $4.4 million for the current year, primarily related to $5.3 million of losses related to the sale of investments in the first quarter. Other income for the prior year was favorably impacted by non-core operations of $9.7 million, primarily related to net gains on equity investments.

Excluding non-core operations, other income decreased $11.4 million. The primary drivers were decreases in commercial loan swap income of $6.3 million on lower volume, fees and service charges of $1.5 million primarily due to lower title activity, and bank owned life insurance of $1.3 million related to non-recurring death benefits recognized in the prior year. Additionally, bankcard services revenue decreased $3.3 million due to the Durbin Amendment, which became effective for the Company on July 1, 2022.

Quarter ended December 31, 2023 vs. September 30, 2023

Other income in the prior linked quarter was $10.8 million, which included non-core operations of $1.5 million related to net gains on equity investments. Excluding non-core operations, other income increased by $375,000 primarily due to gain on sales of loans.

Non-interest Expense

Quarter ended December 31, 2023 vs. December 31, 2022

Operating expenses increased to $60.2 million, as compared to $59.7 million. Operating expenses were adversely impacted by non-core items of $1.7 million from the FDIC special assessment in the current year and $387,000 from merger related and branch consolidation expenses in the prior year.

Excluding non-core operations, operating expenses decreased $815,000. The primary drivers were decreases in compensation and benefits of $1.8 million due to lower incentive compensation and professional fees of $1.8 million tied to the Company's performance improvement initiatives and strategic investments. This was partly offset by increases in data processing expense of $1.8 million, partly driven by one-time recoveries recorded in the prior year, and federal deposit insurance and regulatory assessments of $799,000, primarily due to new assessment rates that went into effect on January 1, 2023.

Year ended December 31, 2023 vs. December 31, 2022

Operating expenses increased to $248.9 million, as compared to $234.9 million. Operating expenses for the years were adversely impacted by $1.8 million and $3.4 million of non-core operations, respectively.

Excluding non-core operations, operating expenses increased by $15.7 million. This was due to increases in professional fees of $5.3 million and compensation and benefits of $3.9 million related to the Company's performance improvement initiatives and strategic investments, and related severance and other program costs. Additionally, there were increases in federal deposit insurance and regulatory assessments of $2.1 million and data processing expense of $1.7 million, which were driven by the same factors as the three months ended. Marketing expense also increased $1.3 million due to the Company's enhanced digital strategy efforts, and other operating expenses included higher expenses of $1.1 million primarily related to real estate charges on assets sold during the period from assets held for sale.

Quarter ended December 31, 2023 vs. September 30, 2023

Excluding non-core operations, operating expenses decreased by $6.0 million. This was primarily due to decreases in compensation and benefits expense of $3.4 million and professional fees of $2.4 million due to the Company's improvement initiatives and strategic investments noted above.

Income Tax Expense

The provision for income taxes was $8.6 million and $32.7 million for the quarter and year ended December 31, 2023, respectively, as compared to $17.4 million and $46.6 million, for the same prior year periods, and $6.5 million for the prior linked quarter. The effective tax rate was 23.6% and 23.9% for the quarter and year ended December 31, 2023, respectively, as compared to 24.6% and 24.0% for the same prior year periods, and 23.9% for the prior linked quarter.

Financial Condition

December 31, 2023 vs. December 31, 2022

Total assets increased by $434.4 million to $13.54 billion, from $13.10 billion, primarily due to purchases of available-for-sale debt securities and loan growth. Available-for-sale debt securities increased by $296.2 million to $753.9 million, from $457.6 million, primarily due to purchases of variable-rate mortgage-backed securities in the fourth quarter of 2023. Total loans increased by $276.5 million to $10.19 billion, from $9.92 billion, due to loan originations and growth.

Other assets decreased by $41.4 million to $179.7 million, from $221.1 million, primarily due to a decrease in market values associated with customer interest rate swap programs.

Total liabilities increased by $357.9 million to $11.88 billion, from $11.52 billion. Deposits increased by $759.7 million to $10.43 billion, from $9.68 billion. Time deposits increased by $903.4 million to $2.45 billion, from $1.54 billion, or 23.4% and 15.9% of total deposits, respectively. Retail time deposits increased $1.13 billion, while brokered time deposits decreased $242.0 million. The loans-to-deposit ratio was 97.7%, as compared to 102.5%. FHLB advances decreased by $362.5 million to $848.6 million, from $1.21 billion due to mix shift in funding sources from FHLB advances to deposits.

Other liabilities decreased by $45.4 million to $300.7 million, from $346.2 million, primarily due to a decrease in the market values associated with customer interest rate swaps and related collateral received from counterparties.

Total stockholders' equity increased to $1.66 billion, as compared to $1.59 billion, primarily reflecting net income, net of dividends, for the year ended December 31, 2023. Additionally, accumulated other comprehensive loss decreased by $15.1 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.

The Company's estimated common equity tier 1 capital ratio increased to 10.88%, which included an estimated 30 bps improvement due to balance sheet optimization efforts completed in the fourth quarter.

For the year ended December 31, 2023, the Company did not repurchase shares under its stock repurchase program. There were 2,934,438 shares available for repurchase at December 31, 2023 under the existing repurchase program. Book value per common share increased to $27.96, as compared to $26.81. Tangible book value per common share² increased to $18.35, as compared to $17.08.

Asset Quality

December 31, 2023 vs. December 31, 2022

The Company's non-performing loans increased to $29.5 million from $23.3 million and represented 0.29% and 0.23% of total loans, respectively. The increase in non-performing loans was primarily driven by the remaining exposure of $8.8 million on a single credit relationship reported in the prior quarter.

The allowance for loan credit losses as a percentage of total non-performing loans was 227.21%, as compared to 244.25%. The level of 30 to 89 days delinquent loans increased to $19.2 million, from $14.1 million. The Company's allowance for loan credit losses was 0.66% of total loans as compared to 0.57%. Refer to "Provision for Credit Losses" section for further discussion.

The Company's asset quality, excluding purchased with credit deterioration ("PCD") loans, were as follows. Non-performing loans increased to $26.4 million, from $19.3 million. The allowance for loan credit losses as a percentage of total non-performing loans was 254.64%, as compared to 294.10%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, increased to $17.7 million, from $10.5 million. The allowance for loan credit losses plus the unamortized credit and PCD marks amounted to $74.7 million, or 0.73% of total loans, as compared to $68.2 million, or 0.69% of total loans.

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 provision for credit losses, and reporting equity and asset amounts excluding intangible assets, goodwill or preferred stock, 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 that 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 Company also announced today that its Annual Meeting of Stockholders will be held on Tuesday, May 21, 2024 at 8:00 a.m. Eastern Time. The record date for stockholders to vote at the Annual Meeting is Monday, March 25, 2024. Additional information regarding virtual access to the meeting will be distributed prior to the meeting.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, January 19, 2024 at 11:00 a.m. Eastern Time. The direct dial number for the call is 1-833-470-1428, toll free, using the access code 040735. For those unable to participate in the conference call, a replay will be available. To access the replay, dial 1-866-813-9403, access code 247218, from one hour after the end of the call until February 16, 2024. The conference call will also be 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 $13.5 billion regional bank providing financial services throughout New Jersey and in the major metropolitan markets of Philadelphia, New York, Baltimore, 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: changes in interest rates, inflation, general economic conditions, potential recessionary conditions, levels of unemployment in the Bank's lending area, real estate market values in the Bank's lending area, potential goodwill impairment, natural disasters, potential 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, changes in liquidity, including the size and composition of the Company's deposit portfolio, including the percentage of uninsured deposits in the portfolio, competition, demand for financial services in the Company's market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company's operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the effect of our rating under the Community Reinvestment Act, the impact of the COVID-19 pandemic or any other pandemic on our operations and financial results and those of our customers 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, 2022, 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, 2023		September 30, 2023		December 31, 2022
	(Unaudited)		(Unaudited)
Assets
Cash and due from banks	$	153,718	$	408,882	$	167,946
Debt securities available-for-sale, at estimated fair value		753,892		453,208		457,648
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,133 at December 31, 2023, $932 at September 30, 2023, and $1,128 at December 31, 2022 (estimated fair value of $1,068,438 at December 31, 2023, $1,047,342 at September 30, 2023, and $1,110,041 at December 31, 2022)		1,159,735		1,189,339		1,221,138
Equity investments		100,163		97,908		102,037
Restricted equity investments, at cost		93,766		82,484		109,278
Loans receivable, net of allowance for loan credit losses of $67,137 at December 31, 2023, $63,877 at September 30, 2023, and $56,824 at December 31, 2022		10,136,721		10,068,156		9,868,718
Loans held-for-sale		5,166		—		690
Interest and dividends receivable		51,874		50,030		44,704
Premises and equipment, net		121,372		122,646		126,705
Bank owned life insurance		266,498		265,071		261,603
Assets held for sale		28		3,004		2,719
Goodwill		506,146		506,146		506,146
Core deposit intangible		9,513		10,489		13,497
Other assets		179,661		240,820		221,067
Total assets	$	13,538,253	$	13,498,183	$	13,103,896
Liabilities and Stockholders' Equity
Deposits	$	10,434,949	$	10,533,929	$	9,675,206
Federal Home Loan Bank advances		848,636		606,056		1,211,166
Securities sold under agreements to repurchase with customers		73,148		82,981		69,097
Other borrowings		196,456		196,183		195,403
Advances by borrowers for taxes and insurance		22,407		29,696		21,405
Other liabilities		300,712		411,734		346,155
Total liabilities		11,876,308		11,860,579		11,518,432
Stockholders' equity:
OceanFirst Financial Corp. stockholders' equity		1,661,163		1,636,891		1,584,662
Non-controlling interest		782		713		802
Total stockholders' equity		1,661,945		1,637,604		1,585,464
Total liabilities and stockholders' equity	$	13,538,253	$	13,498,183	$	13,103,896

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 30,			December 31,		December 31,
	2023			2023		2022			2023		2022
	\|--------------------- (Unaudited) ---------------------\|							(Unaudited)
Interest income:
Loans	$	137,110	$	133,931		$	117,046	$	521,865		$	390,386
Debt securities		15,444		15,223			10,951		59,273			34,407
Equity investments and other		7,880		9,256			2,280		26,836			6,382
Total interest income		160,434		158,410			130,277		607,974			431,175
Interest expense:
Deposits		59,467		53,287			13,425		172,018			31,021
Borrowed funds		13,143		14,127			10,364		66,225			22,677
Total interest expense		72,610		67,414			23,789		238,243			53,698
Net interest income		87,824		90,996			106,488		369,731			377,477
Provision for credit losses		3,153		10,283			3,647		17,678			7,768
Net interest income after provision for credit losses		84,671		80,713			102,841		352,053			369,709
Other income:
Bankcard services revenue		1,531		1,507			1,437		5,912			9,219
Trust and asset management revenue		610		662			551		2,529			2,386
Fees and service charges		5,315		5,178			5,776		21,254			22,802
Net gain on sales of loans		309		66			10		428			358
Net gain (loss) on equity investments		2,176		1,452			17,187		(3,732	)		9,685
Net gain from other real estate operations		—		—			—		—			48
Income from bank owned life insurance		1,427		1,390			1,697		5,280			6,578
Commercial loan swap income		29		11			519		741			7,065
Other		464		496			374		1,212			953
Total other income		11,861		10,762			27,551		33,624			59,094
Operating expenses:
Compensation and employee benefits		32,126		35,534			33,943		135,802			131,915
Occupancy		5,218		5,466			5,027		21,188			20,817
Equipment		1,172		1,172			1,131		4,650			4,987
Marketing		1,112		1,183			705		4,238			2,947
Federal deposit insurance and regulatory assessments		4,386		2,557			1,924		11,157			7,359
Data processing		6,430		6,086			4,629		24,835			23,095
Check card processing		991		1,154			1,243		4,640			4,971
Professional fees		2,858		5,258			4,697		18,297			12,993
Amortization of core deposit intangible		976		987			1,159		3,984			4,718
Branch consolidation expense, net		—		—			111		70			713
Merger related expenses		—		—			276		22			2,735
Other operating expense		4,920		5,087			4,883		20,029			17,631
Total operating expenses		60,189		64,484			59,728		248,912			234,881
Income before provision for income taxes		36,343		26,991			70,664		136,765			193,922
Provision for income taxes		8,591		6,459			17,353		32,700			46,565
Net income		27,752		20,532			53,311		104,065			147,357
Net income (loss) attributable to non-controlling interest		70		(135	)		39		36			754
Net income attributable to OceanFirst Financial Corp.		27,682		20,667			53,272		104,029			146,603
Dividends on preferred shares		1,004		1,004			1,004		4,016			4,016
Net income available to common stockholders	$	26,678	$	19,663		$	52,268	$	100,013		$	142,587
Basic earnings per share	$	0.46	$	0.33		$	0.89	$	1.70		$	2.43
Diluted earnings per share	$	0.46	$	0.33		$	0.89	$	1.70		$	2.42
Average basic shares outstanding		59,120		59,104			58,584		58,948			58,730
Average diluted shares outstanding		59,123		59,111			58,751		58,957			58,878

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(dollars in thousands)

LOANS RECEIVABLE			At
			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Commercial:
Commercial real estate - investor			$	5,353,974		$	5,334,279		$	5,319,686		$	5,296,661		$	5,171,952
Commercial real estate - owner-occupied				943,891			957,216			981,618			986,366			997,367
Commercial and industrial				666,532			652,119			620,284			622,201			622,372
Total commercial				6,964,397			6,943,614			6,921,588			6,905,228			6,791,691
Consumer:
Residential real estate				2,979,534			2,928,259			2,906,556			2,881,811			2,861,991
Home equity loans and lines and other consumer ("other consumer")				250,664			251,698			255,486			252,773			264,372
Total consumer				3,230,198			3,179,957			3,162,042			3,134,584			3,126,363
Total loans				10,194,595			10,123,571			10,083,630			10,039,812			9,918,054
Deferred origination costs (fees), net				9,263			8,462			8,267			7,332			7,488
Allowance for loan credit losses				(67,137	)		(63,877	)		(61,791	)		(60,195	)		(56,824	)
Loans receivable, net			$	10,136,721		$	10,068,156		$	10,030,106		$	9,986,949		$	9,868,718
Mortgage loans serviced for others			$	68,217		$	52,796		$	50,820		$	50,421		$	51,736
	At December 31, 2023 Average Yield
Loan pipeline ⁽¹⁾:
Commercial	8.61	%	$	124,707		$	50,756		$	39,164		$	236,550		$	114,232
Residential real estate	7.14			49,499			66,682			58,022			61,258			36,958
Other consumer	8.50			8,819			13,795			18,621			20,589			14,890
Total	8.21	%	$	183,025		$	131,233		$	115,807		$	318,397		$	166,080

	For the Three Months Ended
	December 31,				September 30,		June 30,		March 31,		December 31,
	2023				2023		2023		2023		2022
	Average Yield
Loan originations:
Commercial	7.68	%	$	94,294	$	90,263	$	197,732	$	200,504	$	539,949
Residential real estate	7.05			113,227		92,299		100,542		65,580		101,530	⁽²⁾
Other consumer	8.19			16,971		17,019		22,487		15,927		42,624
Total	7.40	%	$	224,492	$	199,581	$	320,761	$	282,011	$	684,103
Loans sold			$	20,138	$	15,404	$	18,664	$	3,861	$	2,340

⁽¹⁾	_{Loan pipeline includes loans approved but not funded.}
⁽²⁾	_{Excludes residential real estate loan pool purchases of $9.9 million for the three months ended December 31, 2022.}

DEPOSITS	At
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Type of Account
Non-interest-bearing	$	1,657,119	$	1,827,381	$	1,854,136	$	1,984,197	$	2,101,308
Interest-bearing checking		3,911,766		3,708,874		3,537,834		3,697,223		3,829,683
Money market		1,021,805		860,025		770,440		615,993		714,386
Savings		1,398,837		1,484,000		1,229,897		1,308,715		1,487,809
Time deposits⁽¹⁾		2,445,422		2,653,649		2,766,030		2,386,967		1,542,020
Total deposits	$	10,434,949	$	10,533,929	$	10,158,337	$	9,993,095	$	9,675,206

⁽¹⁾	_{Includes brokered time deposits of $631.5 million, $995.5 million, $1.42 billion, $1.24 billion, and $873.4 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.}

OceanFirst Financial Corp.

ASSET QUALITY

(dollars in thousands)

ASSET QUALITY⁽¹⁾	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Non-performing loans:
Commercial real estate - investor	$	20,820		$	20,723		$	13,000		$	13,643		$	10,483
Commercial real estate - owner-occupied		351			240			565			251			4,025
Commercial and industrial		304			1,120			199			162			331
Residential real estate		5,542			5,624			6,174			5,650			5,969
Other consumer		2,531			2,391			2,820			2,731			2,457
Total non-performing loans	$	29,548		$	30,098		$	22,758		$	22,437		$	23,265
Delinquent loans 30 to 89 days	$	19,202		$	20,591		$	3,136		$	11,232		$	14,148
Modifications to borrowers experiencing financial difficulty⁽²⁾
Non-performing (included in total non-performing loans above)	$	6,420		$	6,679		$	6,882		$	6,556		$	6,361
Performing		15,361			7,645			7,516			7,619			7,530
Total modification to borrowers experiencing financial difficulty⁽²⁾	$	21,781		$	14,324		$	14,398		$	14,175		$	13,891
Allowance for loan credit losses	$	67,137		$	63,877		$	61,791		$	60,195		$	56,824
Allowance for loan credit losses as a percent of total loans receivable⁽³⁾		0.66	%		0.63	%		0.61	%		0.60	%		0.57	%
Allowance for loan credit losses as a percent of total non-performing loans⁽³⁾		227.21			212.23			271.51			268.28			244.25
Non-performing loans as a percent of total loans receivable		0.29			0.30			0.23			0.22			0.23
Non-performing assets as a percent of total assets		0.22			0.22			0.17			0.17			0.18
Supplemental PCD and non-performing loans
PCD loans, net of allowance for loan credit losses	$	16,122		$	18,640		$	18,872		$	20,513		$	27,129
Non-performing PCD loans		3,183			3,177			3,171			3,929			3,944
Delinquent PCD and non-performing loans 30 to 89 days		1,516			13,007			1,976			2,248			3,657
PCD modifications to borrowers experiencing financial difficulty⁽²⁾		771			750			755			758			765
Asset quality, excluding PCD loans⁽⁴⁾
Non-performing loans		26,365			26,921			19,587			18,508			19,321
Delinquent loans 30 to 89 days (excludes non-performing loans)		17,686			7,584			1,160			8,984			10,491
Modification to borrowers experiencing financial difficulty⁽²⁾		21,010			13,574			13,643			13,417			13,126
Allowance for loan credit losses as a percent of total non-performing loans⁽³⁾		254.64	%		237.28	%		315.47	%		325.24	%		294.10	%
Non-performing loans as a percent of total loans receivable		0.26			0.27			0.19			0.18			0.19
Non-performing assets as a percent of total assets		0.19			0.20			0.14			0.14			0.15

⁽¹⁾	_{At December 31, 2023 and September 30, 2023, non-performing loans included the remaining exposure of $8.8 million on a commercial real estate relationship that was partially charged-off during the quarter ended September 30, 2023.}
⁽²⁾	_{For periods in 2023, balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings. For the 2022 period, the balances represent only troubled debt restructurings.}
⁽³⁾	_{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 $7.5 million, $8.8 million, $9.8 million, $10.5 million, and $11.4 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.}
⁽⁴⁾	_{All balances and ratios exclude PCD loans.}

NET LOAN (CHARGE-OFFS) RECOVERIES	For the Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Net loan (charge-offs) recoveries:
Loan charge-offs	$	(98	)	$	(8,379	)	$	(206	)	$	(10	)	$	(138	)
Recoveries on loans		63			108			83			57			143
Net loan (charge-offs) recoveries	$	(35	)	$	(8,271	)	$	(123	)	$	47		$	5
Net loan (charge-offs) recoveries to average total loans (annualized)		—	%		0.33	%		—	%	NM*			NM*
Net loan (charge-offs) recoveries detail:
Commercial	$	9		$	(8,332	)	$	(117	)	$	—		$	(46	)
Residential real estate		9			17			9			8			9
Other consumer		(53	)		44			(15	)		39			42
Net loan (charge-offs) recoveries	$	(35	)	$	(8,271	)	$	(123	)	$	47		$	5

_{^* Not meaningful as amounts are net loan recoveries.}

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

	For the Three Months Ended
	December 31, 2023							September 30, 2023							December 31, 2022
(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	$	396,843		$	5,423	5.42	%	$	470,825		$	6,440	5.43	%	$	70,023		$	634	3.59	%
Securities⁽²⁾		1,863,136			17,901	3.81			1,873,450			18,039	3.82			1,764,764			12,597	2.83
Loans receivable, net⁽³⁾
Commercial		6,937,191			105,260	6.02			6,923,743			103,069	5.91			6,715,896			88,991	5.26
Residential real estate		2,957,671			27,934	3.78			2,918,612			26,765	3.67			2,841,073			24,532	3.45
Other consumer		250,300			3,916	6.21			252,126			4,097	6.45			262,911			3,523	5.32
Allowance for loan credit losses, net of deferred loan costs and fees		(56,001	)		—	—			(53,959	)		—	—			(48,776	)		—	—
Loans receivable, net		10,089,161			137,110	5.40			10,040,522			133,931	5.30			9,771,104			117,046	4.76
Total interest-earning assets		12,349,140			160,434	5.16			12,384,797			158,410	5.08			11,605,891			130,277	4.46
Non-interest-earning assets		1,243,967							1,252,416							1,228,520
Total assets	$	13,593,107						$	13,637,213						$	12,834,411
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking	$	3,908,517			19,728	2.00	%	$	3,692,500			14,938	1.61	%	$	3,989,403			4,911	0.49	%
Money market		941,859			7,520	3.17			832,729			5,698	2.71			738,637			917	0.49
Savings		1,446,935			5,193	1.42			1,391,811			3,311	0.94			1,539,175			285	0.07
Time deposits		2,596,706			27,026	4.13			2,867,921			29,340	4.06			1,486,410			7,312	1.95
Total		8,894,017			59,467	2.65			8,784,961			53,287	2.41			7,753,625			13,425	0.69
FHLB advances		615,172			7,470	4.82			701,343			8,707	4.93			632,207			6,475	4.06
Securities sold under agreements to repurchase		80,181			387	1.91			76,620			261	1.35			88,191			41	0.18
Other borrowings⁽⁴⁾		321,369			5,286	6.53			317,210			5,159	6.45			195,167			3,848	7.82
Total borrowings		1,016,722			13,143	5.13			1,095,173			14,127	5.12			915,565			10,364	4.49
Total interest-bearing liabilities		9,910,739			72,610	2.91			9,880,134			67,414	2.71			8,669,190			23,789	1.09
Non-interest-bearing deposits		1,739,499							1,841,198							2,221,884
Non-interest-bearing liabilities⁽⁴⁾		292,170							272,982							378,481
Total liabilities		11,942,408							11,994,314							11,269,555
Stockholders' equity		1,650,699							1,642,899							1,564,856
Total liabilities and equity	$	13,593,107						$	13,637,213						$	12,834,411
Net interest income				$	87,824						$	90,996						$	106,488
Net interest rate spread⁽⁵⁾						2.25	%						2.37	%						3.37	%
Net interest margin⁽⁶⁾						2.82	%						2.91	%						3.64	%
Total cost of deposits (including non-interest-bearing deposits)						2.22	%						1.99	%						0.53	%

	For the Year Ended
	December 31, 2023							December 31, 2022
(dollars in thousands)	Average Balance			Interest		Average Yield/ Cost		Average Balance			Interest		Average Yield/ Cost
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments	$	327,539		$	17,084	5.22	%	$	72,913		$	1,106	1.52	%
Securities ⁽²⁾		1,905,413			69,025	3.62			1,792,598			39,683	2.21
Loans receivable, net ⁽³⁾
Commercial		6,903,731			400,459	5.80			6,386,755			287,044	4.49
Residential real estate		2,911,246			105,796	3.63			2,724,398			91,432	3.36
Other consumer		255,359			15,610	6.11			256,912			11,910	4.64
Allowance for loan credit losses, net of deferred loan costs and fees		(53,477	)		—	—			(44,446	)		—	—
Loans receivable, net		10,016,859			521,865	5.21			9,323,619			390,386	4.19
Total interest-earning assets		12,249,811			607,974	4.96			11,189,130			431,175	3.85
Non-interest-earning assets		1,237,218							1,200,725
Total assets	$	13,487,029						$	12,389,855
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing checking	$	3,795,502			52,898	1.39	%	$	4,063,716			11,344	0.28	%
Money market		794,387			18,656	2.35			764,837			2,234	0.29
Savings		1,364,333			9,227	0.68			1,597,648			758	0.05
Time deposits		2,440,829			91,237	3.74			1,167,499			16,685	1.43
Total		8,395,051			172,018	2.05			7,593,700			31,021	0.41
FHLB advances		944,219			46,000	4.87			389,750			10,365	2.66
Securities sold under agreements to repurchase		75,140			931	1.24			101,377			159	0.16
Other borrowings⁽⁴⁾		307,368			19,294	6.28			203,117			12,153	5.98
Total borrowings		1,326,727			66,225	4.99			694,244			22,677	3.27
Total interest-bearing liabilities		9,721,778			238,243	2.45			8,287,944			53,698	0.65
Non-interest-bearing deposits		1,869,735							2,319,657
Non-interest-bearing liabilities⁽⁴⁾		262,883							239,861
Total liabilities		11,854,396							10,847,462
Stockholders' equity		1,632,633							1,542,393
Total liabilities and equity	$	13,487,029						$	12,389,855
Net interest income				$	369,731						$	377,477
Net interest rate spread ⁽⁵⁾						2.51	%						3.20	%
Net interest margin ⁽⁶⁾						3.02	%						3.37	%
Total cost of deposits (including non-interest-bearing deposits)						1.68	%						0.31	%

⁽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⁾	_{For the 2023 periods, the average balances of derivative cash collateral have been reclassified from non-interest bearing liabilities to other borrowings.}
⁽⁵⁾	_{Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.}
⁽⁶⁾	_{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)

	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Selected Financial Condition Data:
Total assets	$	13,538,253	$	13,498,183	$	13,538,903	$	13,555,175	$	13,103,896
Debt securities available-for-sale, at estimated fair value		753,892		453,208		452,016		452,195		457,648
Debt securities held-to-maturity, net of allowance for securities credit losses		1,159,735		1,189,339		1,222,507		1,245,424		1,221,138
Equity investments		100,163		97,908		96,452		101,007		102,037
Restricted equity investments, at cost		93,766		82,484		105,305		115,750		109,278
Loans receivable, net of allowance for loan credit losses		10,136,721		10,068,156		10,030,106		9,986,949		9,868,718
Deposits		10,434,949		10,533,929		10,158,337		9,993,095		9,675,206
Federal Home Loan Bank advances		848,636		606,056		1,091,666		1,346,566		1,211,166
Securities sold under agreements to repurchase and other borrowings		269,604		279,164		270,377		266,601		264,500
Total stockholders' equity		1,661,945		1,637,604		1,626,283		1,610,371		1,585,464

	For the Three Months Ended
	December 31, 2023		September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Selected Operating Data:
Interest income	$	160,434	$	158,410		$	150,096		$	139,034		$	130,277
Interest expense		72,610		67,414			57,987			40,232			23,789
Net interest income		87,824		90,996			92,109			98,802			106,488
Provision for credit losses		3,153		10,283			1,229			3,013			3,647
Net interest income after provision for credit losses		84,671		80,713			90,880			95,789			102,841
Other income (excluding activity related to debt and equity investments)		9,685		9,310			9,487			9,571			10,364
Net gain (loss) on equity investments		2,176		1,452			(559	)		(2,193	)		17,187
Net loss on sale of investments		—		—			—			(5,305	)		—
Operating expenses (excluding FDIC special assessment, merger related and branch consolidation expense, net)		58,526		64,484			62,930			61,217			59,341
FDIC special assessment		1,663		—			—			—			—
Branch consolidation expense, net		—		—			—			70			111
Merger related expenses		—		—			—			22			276
Income before provision for income taxes		36,343		26,991			36,878			36,553			70,664
Provision for income taxes		8,591		6,459			8,996			8,654			17,353
Net income		27,752		20,532			27,882			27,899			53,311
Net income (loss) attributable to non-controlling interest		70		(135	)		85			16			39
Net income attributable to OceanFirst Financial Corp.	$	27,682	$	20,667		$	27,797		$	27,883		$	53,272
Net income available to common stockholders	$	26,678	$	19,663		$	26,793		$	26,879		$	52,268
Diluted earnings per share	$	0.46	$	0.33		$	0.45		$	0.46		$	0.89
Net accretion/amortization of purchase accounting adjustments included in net interest income	$	1,604	$	1,745		$	1,152		$	1,237		$	2,278

	At or For the Three Months Ended
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Selected Financial Ratios and Other Data ^{(1) (2)}:
Performance Ratios (Annualized):
Return on average assets ⁽³⁾	0.78	%	0.57	%	0.80	%	0.82	%	1.62	%
Return on average tangible assets^{(3) (4)}	0.81		0.59		0.83		0.86		1.68
Return on average stockholders' equity ⁽³⁾	6.41		4.75		6.61		6.77		13.25
Return on average tangible stockholders' equity ^{(3) (4)}	9.33		6.93		9.70		10.00		19.85
Return on average tangible common equity ^{(3) (4)}	9.81		7.29		10.21		10.53		20.97
Stockholders' equity to total assets	12.28		12.13		12.01		11.88		12.10
Tangible stockholders' equity to tangible assets ⁽⁴⁾	8.80		8.64		8.51		8.37		8.47
Tangible common equity to tangible assets ⁽⁴⁾	8.38		8.21		8.09		7.95		8.03
Net interest rate spread	2.25		2.37		2.52		2.94		3.37
Net interest margin	2.82		2.91		3.02		3.34		3.64
Operating expenses to average assets	1.76		1.88		1.87		1.88		1.85
Efficiency ratio ⁽⁵⁾	60.38		63.37		62.28		60.78		44.56
Loans-to-deposits	97.70		96.10		99.30		100.50		102.50

	At or For the Year Ended December 31,
	2023		2022
Performance Ratios:
Return on average assets ⁽³⁾	0.74	%	1.15	%
Return on average tangible assets^{(3) (4)}	0.77		1.20
Return on average stockholders' equity ⁽³⁾	6.13		9.24
Return on average tangible stockholders' equity ^{(3) (4)}	8.97		13.96
Return on average tangible common equity ^{(3) (4)}	9.44		14.76
Net interest rate spread	2.51		3.20
Net interest margin	3.02		3.37
Operating expenses to average assets	1.85		1.90
Efficiency ratio ⁽⁵⁾	61.71		53.80

	At or For the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
		2023			2023			2023			2023			2022
Trust and Asset Management:
Wealth assets under administration and management ("AUA/M")	$	335,769		$	336,913		$	339,890		$	333,436		$	324,066
Nest Egg AUA/M		401,420			385,317			397,927			400,227			403,538
Total AUA/M		737,189			722,230			737,817			733,663			727,604
Per Share Data:
Cash dividends per common share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.20
Book value per common share at end of period		27.96			27.56			27.37			27.07			26.81
Tangible book value per common share at end of period ⁽⁴⁾		18.35			17.93			17.72			17.42			17.08
Common shares outstanding at end of period		59,447,684			59,421,498			59,420,859			59,486,086			59,144,128
Preferred shares outstanding at end of period		57,370			57,370			57,370			57,370			57,370
Number of full-service customer facilities:		39			38			38			38			38
Quarterly Average Balances
Total securities	$	1,863,136		$	1,873,450		$	1,931,032		$	1,955,399		$	1,764,764
Loans receivable, net		10,089,161			10,040,522			10,010,785			9,924,905			9,771,104
Total interest-earning assets		12,349,140			12,384,797			12,250,055			12,010,044			11,605,891
Total goodwill and core deposit intangible		516,289			517,282			518,265			519,282			520,400
Total assets		13,593,107			13,637,213			13,467,721			13,244,593			12,834,411
Time deposits		2,596,706			2,867,921			2,458,872			1,826,662			1,486,410
Total deposits (including non-interest-bearing deposits)		10,633,516			10,626,159			9,993,010			9,793,256			9,975,509
Total borrowings		1,016,722			1,095,173			1,603,126			1,600,845			915,565
Total interest-bearing liabilities		9,910,739			9,880,134			9,722,910			9,365,594			8,669,190
Non-interest bearing deposits		1,739,499			1,841,198			1,873,226			2,028,507			2,221,884
Stockholders' equity		1,650,699			1,642,899			1,626,693			1,609,677			1,564,856
Tangible stockholders' equity ⁽⁴⁾		1,134,410			1,125,617			1,108,428			1,090,395			1,044,456
Quarterly Yields and Costs
Total securities		3.81	%		3.82	%		3.47	%		3.40	%		2.83	%
Loans receivable, net		5.40			5.30			5.17			4.96			4.76
Total interest-earning assets		5.16			5.08			4.91			4.68			4.46
Time deposits		4.13			4.06			3.57			2.88			1.95
Total cost of deposits (including non-interest-bearing deposits)		2.22			1.99			1.52			0.88			0.53
Total borrowed funds		5.13			5.12			5.02			4.79			4.49
Total interest-bearing liabilities		2.91			2.71			2.39			1.74			1.09
Net interest spread		2.25			2.37			2.52			2.94			3.37
Net interest margin		2.82			2.91			3.02			3.34			3.64

⁽¹⁾	_{With the exception of end of quarter ratios, all ratios are based on average daily balances.}
⁽²⁾	_{Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to "Non-GAAP Reconciliation."}
⁽³⁾	_{Ratios for each period are based on net income available to common stockholders.}
⁽⁴⁾	_{Tangible stockholders' equity and tangible assets exclude intangible assets related to goodwill and core deposit intangible. Tangible common equity (also referred to as "tangible book value") excludes goodwill, core deposit intangible and preferred equity. Refer to "Non-GAAP Reconciliation."}
⁽⁵⁾	_{Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.}

OceanFirst Financial Corp.

OTHER ITEMS

(dollars in thousands, except per share amounts)

NON-GAAP RECONCILIATION

	For the Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Core Earnings:
Net income available to common stockholders (GAAP)	$	26,678		$	19,663		$	26,793		$	26,879		$	52,268
(Less) add non-recurring and non-core items:
Net (gain) loss on equity investments ⁽¹⁾		(2,176	)		(1,452	)		559			2,193			(17,187	)
Net loss on sale of investments ⁽¹⁾		—			—			—			5,305			—
FDIC special assessment		1,663			—			—			—			—
Merger related expenses		—			—			—			22			276
Branch consolidation expense, net		—			—			—			70			111
Income tax expense (benefit) on items		129			351			(162	)		(1,797	)		4,060
Core earnings (Non-GAAP)	$	26,294		$	18,562		$	27,190		$	32,672		$	39,528
Income tax expense	$	8,591		$	6,459		$	8,996		$	8,654		$	17,353
Provision for credit losses		3,153			10,283			1,229			3,013			3,647
Less: income tax expense (benefit) on non-core items		129			351			(162	)		(1,797	)		4,060
Core earnings PTPP (Non-GAAP)	$	37,909		$	34,953		$	37,577		$	46,136		$	56,468
Core diluted earnings per share	$	0.45		$	0.32		$	0.46		$	0.55		$	0.67
Core earnings PTPP diluted earnings per share	$	0.65		$	0.59		$	0.64		$	0.78		$	0.96

Core Ratios (Annualized):
Return on average assets		0.77	%		0.54	%		0.81	%		1.00	%		1.22	%
Return on average tangible stockholders' equity		9.20			6.54			9.84			12.15			15.01
Return on average tangible common equity		9.67			6.88			10.36			12.80			15.86
Efficiency ratio		60.02			64.29			61.94			56.49			50.78

⁽¹⁾

_{The sale of specific positions in two financial institutions impacted both equity investments and debt securities for the three months ended March 31, 2023. On the Consolidated Statements of Income, the losses on sale of equity investments and debt securities are reported within net gain (loss) on equity investments ($4.6 million) and other ($697,000), respectively, for the three months ended March 31, 2023.}

	For the Years Ended December 31,
		2023			2022
Core Earnings:
Net income available to common stockholders (GAAP)	$	100,013		$	142,587
(Less) add non-recurring and non-core items:
Net gain on equity investments⁽¹⁾		(876	)		(9,685	)
Net loss on sale of investments ⁽¹⁾		5,305			—
FDIC special assessment		1,663			—
Merger related expenses		22			2,735
Branch consolidation expense, net		70			713
Income tax (benefit) expense on items		(1,479	)		1,611
Core earnings (Non-GAAP)	$	104,718		$	137,961
Income tax expense	$	32,700		$	46,565
Credit loss provision		17,678			7,768
Less: income tax (benefit) expense on non-core items		(1,479	)		1,611
Core earnings PTPP (Non-GAAP)	$	156,575		$	190,683
Core diluted earnings per share	$	1.78		$	2.34
Core earnings PTPP diluted earnings per share	$	2.66		$	3.24

Core Ratios:
Return on average assets		0.78	%		1.11	%
Return on average tangible stockholders' equity		9.39			13.50
Return on average tangible common equity		9.89			14.28
Efficiency ratio		60.61			54.21

⁽¹⁾

	December 31,			September 30,			June 30,			March 31,			December 31,
		2023			2023			2023			2023			2022
Tangible Equity:
Total stockholders' equity	$	1,661,945		$	1,637,604		$	1,626,283		$	1,610,371		$	1,585,464
Less:
Goodwill		506,146			506,146			506,146			506,146			506,146
Core deposit intangible		9,513			10,489			11,476			12,470			13,497
Tangible stockholders' equity		1,146,286			1,120,969			1,108,661			1,091,755			1,065,821
Less:
Preferred stock		55,527			55,527			55,527			55,527			55,527
Tangible common equity	$	1,090,759		$	1,065,442		$	1,053,134		$	1,036,228		$	1,010,294

Tangible Assets:
Total assets	$	13,538,253		$	13,498,183		$	13,538,903		$	13,555,175		$	13,103,896
Less:
Goodwill		506,146			506,146			506,146			506,146			506,146
Core deposit intangible		9,513			10,489			11,476			12,470			13,497
Tangible assets	$	13,022,594		$	12,981,548		$	13,021,281		$	13,036,559		$	12,584,253

Tangible stockholders' equity to tangible assets		8.80	%		8.64	%		8.51	%		8.37	%		8.47	%
Tangible common equity to tangible assets		8.38	%		8.21	%		8.09	%		7.95	%		8.03	%

Company Contact:

Patrick S. Barrett

Chief Financial Officer

OceanFirst Financial Corp.

Tel: (732) 240-4500, ext. 27507

Email: pbarrett@oceanfirst.com

OceanFirst Financial Corp. Announces Quarterly and Annual Earnings and Financial Results