OceanFirst Financial
Annual Report 2017

Plain-text annual report

✪ Headquarters New York Hunterdon Somerset P hila d elp hia Philadelp hia OceanFirst Financial Corp. operates as the holding company for OceanFirst Bank, a community-oriented financial institution offering a wide variety of financial services to meet the needs of the communities it serves throughout the region. The Bank provides commercial and residential financing solutions, wealth management, and deposit services. OceanFirst Bank is the fourth largest New Jersey-based banking institution by deposit market share. FIN A NCIAL SU M M ARY (dollars in thousands, except per share amounts) At or for the year ended December 31, 2017 2016 2015 2014 Selected Financial Condition Data: Total assets Loans receivable, net Deposits Stockholders’ equity Selected Operating Data: Net interest income Other income Operating expenses(1) Net income(1) Diluted earnings per share(1) Selected Financial Ratios: Tangible stockholders’ equity per share Cash dividend per share $5,416,006 $5,166,917 $2,593,068 $2,356,714 3,965,773 3,803,443 1,970,703 1,688,846 4,342,798 4,187,750 1,916,678 1,720,135 601,941 571,903 238,446 218,259 169,218 120,262 27,072 20,412 126,520 102,852 42,470 1.28 13.58 0.60 23,046 0.98 12.94 0.54 76,829 16,426 60,775 20,322 1.21 13.67 0.52 72,348 18,577 57,764 19,920 1.19 12.91 0.49 Tangible stockholders’ equity to total tangible assets 8.42% 8.30% 9.12% 9.26% Return on average assets(1) Return on average tangible stockholders’ equity(1) Net interest rate spread Net interest rate margin Operating expenses to average assets(1) Efficiency ratio(1) Non-performing loans as a percent of total loans receivable 0.80 9.82 3.41 3.50 2.39 64.46 0.52 0.62 7.13 3.38 3.47 2.76 73.11 0.35 0.82 8.96 3.18 3.28 2.47 65.17 0.91 0.86 9.18 3.23 3.31 2.50 63.53 1.06 (1) Amounts and performance ratios for 2017 include merger related expenses, branch consolidation expenses, acceleration of stock award expense due to the retirement of a director, and additional income tax expense related to the recently enacted Tax Reform of $18.4 million with an after tax cost of $13.7 million, or $0.42 per diluted share. Amounts and performance ratios for 2016 include merger related expenses and a Federal Home Loan Bank advance prepayment fee totaling $16.7 million with an after tax cost of $11.9 million, or $0.51 per diluted share. Amounts and performance ratios for 2015 include merger related expenses of $1.9 million with an after tax cost of $1.3 million, or $0.08 per diluted share. OCE A N FIRST FIN A NCI A L COR P. N A SDAQ: OCFC 1 LETTER TO SHAREHOLDERS Dear Fellow Shareholders, 2017 represented another year of strong performance A relentless focus on growing low-cost and durable for our Company, illustrated by excellent operating deposits, combined with high-quality loans, has been results in the fourth quarter, which included after-tax the hallmark of OceanFirst for many years. The addition core(1) net income of $14.9 million, yielding a return on of growth via acquisition has provided an important average assets of 1.09%, a return on average tangible supplement; however, acquisitions are not a substitute common equity of 13.3% and an efficiency ratio of for organic growth, nor will they improve a business 53.7%. These figures demonstrate the value of focus- if its fundamental business strategy or execution is ing on organic growth, increasing operating scale flawed. While our success with recent acquisitions through our recent acquisitions, and keeping a sharp gives us the confidence to evaluate additional oppor- eye on risk management and regulatory compliance. tunities, acquisitions are not a stand-alone strategy Operating Trends & Strategies Total deposits grew by $155 million while our average cost of deposits increased just four basis points over the prior year. We accomplished this despite reducing our branch locations by 15 branches, or 25% of our network. Loan production of $828 million resulted in net growth of $160 million as we took the opportunity to improve the credit risk profile of our loan portfolio, an important discipline. Over the past five years our ability to drive organic growth and improve operating scale with several acquisitions has resulted in core EPS growth of 40%. and take a lower strategic priority than core operat- ing discipline and organic growth initiatives. We have established several strategic priorities for the remainder of 2018 and the next few years, including Loan Portfolio Growth, Net Interest Margin Manage- ment, Deposit Growth and enhancing our Direct Banking Capabilities. Loan Portfolio Growth will continue to be driven on a relationship basis. Recruiting top tier commercial loan talent remains a priority and we were pleased to announce the opening of a new commercial loan production office in Doylestown, Pennsylvania that Quarterly Earnings Per Share and Efficiency Ratio Core Efficiency Ratio Core Diluted Earnings Per Share 61.49% $0.26 $0.45 53.67% Q2 ’13 Q4 ’13 Q2 ’14 Q4 ’14 Q2 ’15 Q4 ’15 Q2 ’16 Q4 ’16 Q2 ’17 Q4 ’17 Q3 ’13 Q1 ’13 (1) Core net income excludes merger related expenses, branch consolidation expenses, acceleration of stock award expense due to the retirement of a director, and additional income tax expense related to the recently enacted Tax Reform totaling $18.4 million with an after tax cost of $13.7 million. Q1 ’15 Q3 ’15 Q1 ’16 Q3 ’16 Q1 ’17 Q3 ’17 Q1 ’14 Q3 ’14 0.5 0.4 0.3 0.2 80 70 60 50 2 will serve the broader Bucks County area. In addition, certificate balances rapidly and seemingly without regard the Sun acquisition has afforded us the opportunity for interest rate risk positions. This reliance on price sen- to expand via commercial loan production offices in sitive deposits is apparent as many of our competitors Edison, New Jersey, and Manhattan, New York. Our are experiencing high and rapidly rising deposit funding professional lenders typically possess decades of costs. Our relationship driven approach, which is signifi- experience and customer contacts while defining the cantly more time consuming and managerially intensive, OceanFirst brand. Similarly, our residential lending provides a durable competitive advantage. Long-term business continues to grow by adding seasoned talent investments in corporate cash management, the focus throughout central New Jersey and in the greater on commercial lending, and our disciplined approach to Philadelphia metropolitan market. Whether commercial pricing have been successful as demonstrated by strong or residential, our lending strategy focuses on securing and stable net interest margins. the best possible talent and providing them with the resources to be responsive and highly competitive. Loan Balances (in Billions) $3.97 $3.80 $1.97 $1.69 $1.54 2013 2014 2015 2016 2017 Loans Acquired via Acquisition OceanFirst Legacy Net Interest Margin Management will be critical as the interest rate cycle turns. Our pricing discipline for both loan and deposit products, coupled with an expanding expertise in Corporate Cash Manage ment, have allowed us to maintain a relatively neutral interest rate risk position. Within the last decade, interest rate Deposit Growth may be modest in 2018 as our focus on quality deposits will restrain overall growth. Incre- mental investments in leadership talent in Corporate Cash Management will provide increasing value to the Bank and to our customers. In addition, our retention of deposits at acquired banks exceeds 94% and the retention of deposits at the 15 branches 4000000 consolidated in 2017 remains above 97%. As con- 3500000 sumer preferences change, it is critical that we shift 3000000 our investments to provide convenience according to 2500000 our customer’s definition. Con venience is increasingly 2000000 1500000 1000000 500000 0 Deposit Balances (in Billions) $4.34 $4.19 $1.75 $1.72 $1.92 discipline has made little difference to community banks. 2013 2014 2015 2016 2017 Many banks have adopted less rigorous deposit gather- Deposits Acquired via Acquisition ing strategies, growing rate sensitive money market and OceanFirst Legacy 5000000 4000000 3000000 2000000 1000000 0 3 OCEANFIRST FINANCIAL CORP. NASDAQ: OCFCdefined by mobile, online, telephone, text, email, and past few years recruiting top tier talent, retaining the video conferencing rather than by our physical branch best talent from acquired banks, and investing in our locations and the hours of our drive-up facilities. legacy workforce. We are pleased to include a number Direct Banking Capabilities will be the foundation of our customer interactions in the coming years. I was recently asked how we might compete with the likes of Google, Facebook, Twitter, SnapChat, Uber, or of our staff in this year’s report. They represent the incredible team of over 1,000 employees that come to work each day, focused on building a premier community bank. AirBNB. My answer is simple: social media does a External recruiting has led to the addition of quality phenomenal job connecting us with each other but employees throughout the Company in disciplines as spends little time or effort trying to establish relation- diverse as commercial lending, information security, ships with their users. These social media behemoths customer experience, business intelligence, and risk know what you purchase, where you are located, what management. Our focus has been clear, whether we you like to photograph, and even who your friends are recruiting a seasoned commercial banker with are. However, their business models are different and decades of experience or a recent graduate with do not include a focus on direct relationships nor computer engineering skills. We focus on attracting have they demonstrated a focus on protecting their bright, competitive, and team-focused employees clients’ data. Have you ever tried to call, visit, or text that will drive the Bank’s performance. Our acquisi- any of these entities for help, or attempt to commu- tions have provided a wonderful opportunity to identify nicate with a human being? Automation is very valu- talent at every level. Among the senior officer group, able but robots will not the Bank has added Executive Vice President and replace trusted advisors Senior Vice President talent in Commercial Lending, anytime soon. Residential Lending, Corporate Cash Management, That said, consumers are demanding technology excellence. Processes must be easy to use and response times lightning fast. We have invested in technology for years, Investment Services, Human Resources, Information Security and Bank Secrecy Act/Anti-Money Laundering. As it relates to the broader pool of employees, over 74% of employees joining on the first day of an acqui- sition have been matched to long-term positions at OceanFirst. Compensation plays a critical role and the competitive pioneered online banking, pressure in this area cannot be ignored. To ensure OceanFirst Bank offers mobile banking for customers’ convenience. bill payment, remote deposit, mobile banking, card we attract and retain the best talent in an increasingly management, Apple Pay, Android Pay, and we expect complex industry, the Company implemented a $15 to launch Zelle payments this year. One challenge minimum wage policy in January 2018. To afford as we grow is ensuring that our employees quickly long-term compensation opportunities, the Company embrace technology to ensure our unique blend of is in the process of expanding our Employee Stock high-tech and high-touch banking provides a seamless Ownership Plan (ESOP) by purchasing approximately customer experience. Our investment in Direct Bank 300,000 additional shares of OCFC common stock leadership, along with the appropriate training, which will be added to the Plan in 2018. This commit- compensation, and technology will allow us to meet ment will increase the annual ESOP allocation for that challenge. every employee and thus support their retirement planning while aligning them with our shareholder Human Capital Management value objectives. Human Capital can provide a sustainable competitive advantage for OceanFirst. The Bank has spent the 4 Investing in employees is more than just a compen- the New York City ferry, the location enhances sation discussion. We have expanded external train- efforts to grow our client base into New York and ing opportunities for our employees with the Risk northern New Jersey, as well as increases our Management Association (RMA), the Stonier Graduate access to a diverse and highly qualified labor pool. School of Banking at the Wharton School of the There has been a talent war in our industry for years University of Pennsylvania, and a unique partnership and it is growing more intense. Our approach to with Monmouth University’s Graduate School. In compensation, investing in staff development, and addition to external opportunities, the Bank has created providing exceptional work environments is strategi- a nine-week Certified Digital Banker curriculum which cally focused on winning the talent war. enables our customer facing employees to be best positioned to help clients as their service needs evolve. All customer facing retail employees will have com- pleted this curriculum by the end of 2018. In addition to compensation and training, the physical work environment is becoming an increasingly important factor in recruiting top-tier talent. The Bank is dedicating substantial resources to consolidate over 300 employees from 19 disparate back office locations into two scalable, convenient, and attractive campuses that address current employee needs and position us to accommodate future growth. Our nine- acre operations campus in Toms River is undergoing a multi-phase renovation that will provide an extraor- dinary environment, including a new, state-of-the-art customer contact center to support the dramatic growth of our Direct Banking activities. Complementing the operations campus is a new administrative building, which is fea- tured on the cover of this report. This new building, located in Red Bank, New Jersey, will provide access to a wide and talented labor pool and Renovation of the operations center is currently underway. will attract specialists in finance, credit administration, risk management, information technology, and cyber- security. Located in a vibrant urban environment within walking distance of New Jersey Transit rail service to New York City and a short drive from “ The Bank is dedicating substantial resources to consolidate over 300 employees from 19 disparate back office locations into two scalable, convenient and attractive campuses that address current employee needs and position us to accommodate future growth.” Economic Issues and Opportunities Community banks reflect the economic opportunity of the markets they serve. As our economy is reaching a relatively high level of employment and inflation appears to be stabilizing, the Federal Reserve is sig- naling that several increases to short-term interest rates are on the agenda for 2018. While caution is appropriate, increases to interest rates are a positive sign that the economy is demonstrating strength that has not been evident in more than ten years. Tax reform should stimulate the economy further, adding fuel which may lengthen the duration of the expansion. However, expansions do not last forever, which is a reason to be even more vigilant regarding the timing and nature of the next recession or nega- tive credit cycle. Forecasting credit cycles is a difficult business in any environment, but today’s outlook is even more challenging. On the one hand, the pros- pect of broad global economic growth, tax reform in the U.S., and the possibility of a simulative infrastruc- ture spending plan all point to the potential for years of additional growth ahead. On the other hand, the prospect that interest rate increases might substan- tially dampen loan demand and the possible negative economic effects of a tariff induced trade war suggest that the current expansion may be on borrowed time. The situation reminds us of the joke about wanting a one-handed economist. 5 OCEANFIRST FINANCIAL CORP. NASDAQ: OCFCAs a community bank it is our responsibility to plan dividend. In the event that our earnings allow us to for a wide range of outcomes and to pursue a path of accumulate a significant amount of excess capital, careful growth while adhering to strict risk management the Company has several tools with which capital disciplines. This approach may result in a lower growth levels can be optimized, including acquisitions, share rate than other banks, but preserving margins will repurchases and the consideration of special divi- allow the Bank to deliver steady earnings growth dends. We will certainly keep you apprised of our while strategically positioning us to take advantage strategic approach to capital management as the of the next cycle. Capital Management year progresses. Governance As earnings have advanced we have taken the oppor- As the Company grows it is imperative that the Board tunity to increase the quarterly cash dividend to of Directors also adapt to meet the changing gover- $0.15 per share, a 25% increase over the past five nance requirements of a larger, more complex, and years. At this level the dividend is on the low end of more geographically diverse business. Our Board has our historical payout ratio, allowing for an opportunity embraced this challenge and has committed to an to re-evaluate capital management strategies. Most ongoing process of Board Renewal. This process important to the capital discussion is determining includes reviewing the Board’s policies and proce- the amount of capital the Bank might require to dures, the structure of committees, mechanisms for support growth initiatives or to weather a period of policy oversight, and the composition of talent in economic uncertainty. the Boardroom. Given the competitive pressure currently evident in our markets, it is unlikely that internally generated capital will be effectively deployed solely through organic growth. Prudent acquisitions, which have “ Our Board has embraced this challenge and has committed to an ongoing process of Board Renewal.” fueled earnings growth in recent years, are a second As part of this process, the Board has adjusted poli- option to deploy capital. As our industry consolidates cies, including the relaxation of residence require- and as our track record demonstrates, there is a rea- ments and the elimination of age restrictions, both sonable chance to effectively deploy capital through targeted to ensure a wider pool of Director candi- acquisitions. Of course, capital that does not have dates. The Board has also separated the finance the prospect of being useful to the Company in the functions of the Risk Committee into a new Finance long term should be returned to our shareholders. Committee. Routine policy and procedure matters The external environment adds complexity to the evaluation as the lack of clarity around medium term economic conditions presents a challenge. Interest rate movements, the possibility of negative economic developments, and the opposite prospect of positive economic developments, are causing potential out- comes to be widely diverse. Given our ability to deploy capital and the uncertainty of the external economic environment, we have deferred consideration of an increase to the regular have been delegated to the committee level in order to ensure the full Board focuses on the strategic direction of the Company. In addition, the Leadership Committee has developed a matrix of Director skills and experiences to ensure the talent composition of the Board reflects the strategic challenges facing the Company. Finally, in this year’s proxy statement we are asking our shareholders to approve a declassified election process for the Board, which will allow our shareholders to vote on every Director’s term each year. Annual Director elections allow the Company the 6 maximum opportunity to guide the composition of Directors Anthony Coscia, Grace Torres, and John the Board on an ongoing basis. These changes posi- Lloyd were appointed to the Board in early 2018. tion the Board to provide the appropriate governance Their insights, ideas, skills, and varied experiences for a fast growing and complex Company. over a broad industry spectrum make them valuable “ Annual Director elections allow the Company the maximum opportunity to guide the com- position of the Board on an ongoing basis.” Directors Dorothy McCrosson and Donald McLaughlin have announced their intention to retire from Board service effective at the Annual Shareholder meeting in May. Ms. McCrosson joined the Company through the Ocean City Home Bank acquisition, having served that Bank since 2011. She has played an important role during the integration of Ocean City Home Bank, and has served with distinction on our Leadership Committee. We are looking forward to continuing to work with her as she focuses on her private law practice. additions to the Board. Finally, on behalf of the Board of Directors, the Officers and Staff, and our customers, we thank you for the investment you have made in OceanFirst Financial Corp. and your support and confidence in our ability to continue to deliver shareholder value. Christopher D. Maher Chairman of the Board President and Chief Executive Officer Mr. McLaughlin deserves special recognition. He joined the Board of Ocean Federal Savings in 1985, April 11, 2018 serving our Company and its predecessor for 33 years. Don helped guide the Board through the demutualiza- tion process in 1996 and has served as a Director of the OceanFirst Foundation since its inception. Among Don’s many significant contributions has been his chairmanship of the Risk Committee, which he has lead since its creation. He also played a pivotal role in creating a governance structure that has served the Bank extremely well. Don’s unflappable demeanor and thoughtful leadership created a strong risk man- agement foundation that will serve the Bank well for years to come. His presence will be greatly missed in the Boardroom. 7 OCEANFIRST FINANCIAL CORP. NASDAQ: OCFCOUR TEAM MAKES THE DIFFERENCE “ The dedication of my colleagues—their integrity and their daily commitment to excellence—is what makes OceanFirst an extraordinary bank.” SHARON DANIELSON, SVP Deposit Operations Manager Anthony GIORDANO III SVP Senior Operations Manager Sharon DANIELSON SVP Deposit Operations Manager Keshia JONES AVP Branch Manager Jennifer INGENITO VP Human Resources Manager 8 OceanFirst employees take pride in ensuring we deliver exceptional products and services for our customers. Whether they are responsible for originating loans, managing the digital banking platform, or maintaining our cybersecurity, the strength of OceanFirst employees differentiates our bank. Our team is now more than 1,000 strong, with employees from our legacy OceanFirst organization working side-by-side with those from the banks we have acquired. The employees featured on these few pages represent the commitment of our talented and united team of professionals. Javier HURTADO VP Branch Manager Issan ACOSTA AVP Branch Manager Amanda TILLEY VP Project Management Officer Nina ANUARIO SVP Senior Business Development Officer OceanFirst Bank Colonial American Bank Cape Bank Ocean City Home Bank Sun National Bank OCE A N FIRST FIN A NCI A L COR P. N A SDAQ: OCFC 9 RELATIONSHIPS ARE OCEANFIRST’S STRENGTH Whether collaborating with colleagues, connecting with customers, or helping our neighbors in the communities we serve, our employees appreciate every relationship. “ Banking is all about personal and professional relationships. We view our digital platform as a way of reinforcing those connections.” TRICIA CILIBERTO, VP Direct Bank Volha KISLAYA AVP Branch Manager Joseph LaDUCA SVP Controller Tricia CILIBERTO VP Direct Bank 10 Collaborating with Colleagues OceanFirst employees are distinguished by their ability to build relationships across the organization. By combining diverse perspectives and complementary skills, they spur innovation, improve outcomes, and facilitate teamwork. These relationships strengthen our bank, delivering enhanced value for customers and shareholders. Connecting with Customers At OceanFirst, we work closely with customers, helping them achieve their financial aspirations at every stage of their lives. Whether it is owning a home, sending children to college or preparing for retirement, OceanFirst is ready to lend a hand. Thomas ANDO SVP Commercial Lender Janet BOSSI SVP Loan Originations Manager Christine DePHILLIPS Senior Commercial Loan Assistant Shannan BOYD VP Loan Operations Manager OceanFirst Bank Colonial American Bank Cape Bank Ocean City Home Bank Sun National Bank OCE A N FIRST FIN A NCI A L COR P. N A SDAQ: OCFC 11 OceanFirst Foundation OceanFirst Bank has established a reputation as a good neighbor and responsible corporate citizen since its founding in 1902. When the Board of Directors and management of OceanFirst were planning the conversion from a mutual, depositor- owned organization to a publicly owned company, they realized the transaction provided a unique opportunity to help their neighbors in a new way. With the approval of depositors, OceanFirst became the first bank in the United States to establish a pri- vate foundation in conjunction with an IPO. In 1996, OceanFirst Foundation was created with a one-time endowment of $13.4 million in the newly issued OceanFirst Financial Corp. (OCFC) common stock. OceanFirst Foundation concentrates on four priorities: health and wellness initiatives, housing programs, improving the quality of life, and youth development and education. The return on that initial investment has been remarkable. At the end of 2017, total grants from OceanFirst Founda tion were over $34 million. Measured in lives transformed, the benefits are incalculable. The impact of OceanFirst’s decision to create an independent foundation in conjunction with their IPO extends far beyond central and southern New Jersey. Since OceanFirst established the Foundation, it is estimated that no less than 100 mutual conversions have followed OceanFirst’s lead, mobilizing hundreds of millions of dollars for nonprofit organizations across the country. In addition to traditional grants, OceanFirst Foundation intro- • OceanFirst Foundation partners with the Lakewood duced several significant initiatives, including: BlueClaws and Townsquare Media for the OceanFirst • Through the OceanFirst Charity Challenge, established four years ago, over 100 non-profit organizations have raised over $1.5 million. In addition, OceanFirst Foundation presented over $90,000 in grants and prizes to the partici- pating charities. • Since the OceanFirst Foundation Scholarship Program was created in 2010, $1.8 million has been awarded to local colleges and universities in our footprint, helping 1,260 high school graduates from central and southern New Jersey pursue their dream of higher education. Foun da tion Home Runs for Heroes program, which supports charities that help veterans and local service men and women. Since the program began in 2009, $260,000 has been provided to 14 organizations helping hundreds of our military and their families who have sacrificed so much for our country. • To help parents afford rewarding summer experiences for their children, OceanFirst Foundation introduced a Summer Camp Grants program in 2017. Already $90,000 has been awarded to 22 local organizations with hundreds of children benefitting. 12 Scott McLaughlin Special Assets Group Michael C.K. Moorhead Commercial Credit Administration Edward K. Moran Commercial Lending Veronica Morey Retail Banking Marc A. Mosco Human Resources Rachel M. O’Keefe Wealth Operations & Administration Steven L. Pellegrinelli Commercial Lending Louis Petrini Commercial Lending Charles L. Pinto Retail Banking Michele A. Powelczyk Commercial Credit Administration Michael C. Reda Chief Information Officer Brian E. Schaeffer Chief Information Security Officer James M. Smith Commercial Lending Noel M. Spear Real Estate Operations Mark A. Tasy Retail Banking William G. Toner Information Technology Suzanne L. Wegryn Commercial Credit Administration David A. Williams Information Technology Wendy L. Wright Commercial Credit Administration OceanFirst Financial Corp. OceanFirst Bank BOARD OF DIRECTORS Steven E. Brady Retired Ocean Shore Holding Co. Joseph J. Burke, CPA Retired KPMG LLP Angelo Catania Retired Homestar Services, LLC Anthony R. Coscia, Esq. Partner Windels Marx Lane & Mittendorf, LLP Michael D. Devlin Retired Cape Bancorp., Inc. Jack M. Farris Vice President and Deputy General Counsel InfoSec & Cybersecurity for Verizon Communications, Inc. John K. Lloyd Co-CEO Hackensack Meridian Health Christopher D. Maher Chairman of the Board President and Chief Executive Officer Dorothy F. McCrosson, Esq. Managing Partner McCrosson & Stanton, P.C. Donald E. McLaughlin, CPA Retired Diane F. Rhine Broker Sales Representative Childers Sotheby’s International Realty Mark G. Solow Retired GarMark Advisors, LLC Grace C. Torres Trustee Prudential Retail Mutual Funds John E. Walsh Senior Vice President T and M Associates, Inc. Samuel R. Young President and CEO Tilton Fitness Management DIRECTORS EMERITUS John W. Chadwick John R. Garbarino Robert E. Knemoller James T. Snyder OceanFirst Financial Corp. CORPOR ATE OFFICERS Christopher D. Maher Chairman of the Board President and Chief Executive Officer Michael J. Fitzpatrick Executive Vice President Chief Financial Officer Steven J. Tsimbinos Executive Vice President General Counsel Corporate Secretary Grace M. Vallacchi Executive Vice President Chief Risk Officer Jill Apito Hewitt Senior Vice President Investor Relations Officer Robert A. Laskowski Senior Vice President Treasurer Linda L. Blakaitis Vice President Assistant Corporate Secretary OceanFirst Bank E XECUTIVE OFFICERS Christopher D. Maher Chairman of the Board President and Chief Executive Officer Michael J. Fitzpatrick Executive Vice President Chief Financial Officer Gary S. Hett Executive Vice President Chief Human Resources Officer Joseph R. Iantosca Executive Vice President Chief Administrative Officer Nicos Katsoulis Executive Vice President Corporate Banking Joseph J. Lebel III Executive Vice President Chief Banking Officer Steven J. Tsimbinos Executive Vice President General Counsel and Corporate Secretary Grace M. Vallacchi Executive Vice President Chief Risk Officer FIRST SENIOR VICE PRESIDENTS Vincent M. D’Alessandro President, Southern Region George Destafney President, Central Region David R. Howard President, Direct Banking SENIOR VICE PRESIDENTS Carlo Alibrandi Commercial Lending Thomas A. Ando Commercial Lending Nina Anuario Business Development Michelle J. Berry Residential Lending Janet M. Bossi Residential Lending Michael A. Boyd BSA Paul H. Ciancimino Commercial Lending Michael Coleman Commercial Lending William R. Cornelius Commercial Lending Anthony D’Imperio Chief Credit Officer Sharon L. Danielson Deposit Operations Craig Degenova Commercial Lending Michael DellaBarca Commercial Credit Administration Michele B. Estep Human Resources Bradley J. Fouss Commercial Lending Edward J. Geletka Retail Sales Anthony Giordano III Senior Operations Manager Mark A. Harhigh Commercial Credit Administration Michele E. Hart Associate General Counsel Jill Apito Hewitt Investor Relations & Corporate Communications Angela K. Ho Principal Accounting Officer Gayle S. Hoffman Chief Enterprise Risk Officer Sean D. Kauffman Commercial Lending Kenneth L. Keller Commercial Lending Joseph A. LaDuca Controller Cara M. Larned Marketing Cynthia Lash Commercial Lending Robert A. Laskowski Treasurer Raymond C. Leahy Commercial Lending Stacy S. Mattia Commercial Lending Nancy L. Mazza Retail Banking On March 12, 2018 OceanFirst representatives gathered to ring the closing bell at Nasdaq.* Shareholder Information ADMINISTR ATIVE OFFICES 110 West Front Street Red Bank, NJ 07701 OPER ATIONS CENTER 975 Hooper Avenue Toms River, NJ 08754-2009 ANNUAL MEETING OF SHAREHOLDERS The Annual Meeting of Shareholders will be held on May 31, 2018 at 6:00 pm at the OceanFirst Bank Administrative Offices at 110 West Front Street, Red Bank, New Jersey 07701. INVESTOR REL ATIONS Copies of the Company’s earnings releases and financial publications, including the annual report on Form 10-K (without exhibits) filed with the Securities and Exchange Commission are available without charge by contacting: Jill Apito Hewitt, Senior Vice President, Extension 7516 or investorrelations@oceanfirst.com STOCK TR ANSFER AND REGISTR AR Shareholders wishing to change the name, address or ownership of stock, to report lost certificates or to con- solidate accounts are asked to contact the Company’s stock registrar and transfer agent directly: American Stock Transfer and Trust Co. Shareholder Relations Department 59 Maiden Lane, New York, NY 10038 (800) 937-5449 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP 51 John F. Kennedy Parkway Short Hills, NJ 07078 *Photography by Nasdaq, Inc. www.oceanfirst.com NASDAQ: OCFC (732) 240-4500 Member FDIC Equal Housing Lender Equal Opportunity Lender 

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