OceanFirst Financial Corp. Annual Report 2018

← All annual reports

FY2018 Annual Report · OceanFirst Financial Corp.

Loading PDF…

C
V
1

1
0
2
2
7
8
1
o
c

1022781oc

CV1

OCEANFIRST FINANCIAL CORP.
2018 ANNUAL REPORT

CV1

1022781oc

1022781oc.indd 1

c
o
1
8
7
2
2
0
1

1
V
C

4/15/19 8:26 PM

299

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1022781oc

CV2

C
V
2

1
0
2
2
7
8
1
o
c

AT-A-GLANCE

New York

Hunterdon

Somerset

Middlesex

Bucks

Mercer

Monmouth

P hila d elp hia
P hila d elp hia

Ocean

Burlington

Gloucester

Camden

Salem

Atlantic

Cumberland

Cape May

OceanFirst Financial Corp.’s subsidiary,

OceanFirst Bank N.A., founded in 1902,

is a regional bank operating throughout

New Jersey, metropolitan Philadelphia and

metropolitan New York City. OceanFirst

Bank delivers commercial and residential

financing solutions, trust and asset

management and deposit services and is

one of the largest and oldest community-

based financial institutions headquartered

in New Jersey.

c
o
1
8
7
2
2
0
1

2
V
C

4/15/19 8:26 PM

CV2

1022781oc

1022781oc.indd 2

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1
0
2
2
7
8
1
o
c

1022781oc

$7.52

$5.42

$5.17

$2.36

$2.59

2014

2015

2016

2017

2018

TOTAL ASSETS
(in Billions)

55 %

45 %

LOAN PORTFOLIO
■ Commercial ■ Consumer

2018

$7.52

TOTAL ASSETS
(in Billions)

$5.42

2017

2018

(1)

$94.15

CORE NET INCOME
(in Millions)

$56.02

2017

2018

(1)

$1.98

CORE EPS

$1.70

2017

BRANCHES*

SERVING

NJ COUNTIES*

967

EMPLOYEES*

(1) Refer to footnote on page 2
* as of 2/1/2019, includes Capital Bank of New Jersey acquisition

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 1

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1022781oc

1022781oc.indd 1

299

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1022781oc

1
0
2
2
7
8
1
o
c

FINANCIAL SUMMARY

(dollars in thousands, except per share amounts)

At or for the year ended December 31,

2018

2017

2016

2015

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)

$7,516,154

$5,416,006

$5,166,917

$2,593,068

5,579,222

3,965,773

3,803,443

1,970,703

5,814,569

4,342,798

4,187,750

1,916,678

1,039,358

601,941

571,903

238,446

240,502

169,218

120,262

76,829

34,827

27,072

20,412

16,426

186,337

126,520

102,852

60,775

71,932

42,470

23,046

20,322

Diluted earnings per share (1)

1.51

1.28

0.98

1.21

SELECTED FINANCIAL RATIOS AND OTHER DATA (1)

Tangible stockholders’ equity per common share at end of period

Cash dividends per common share

14.26

0.62

13.58

0.60

12.94

0.54

13.67

0.52

Tangible stockholders’ equity to tangible assets

9.55%

8.42%

8.30%

9.12%

Return on average assets (1)

Return on average tangible stockholders’ equity (1)

Net interest rate spread

Net interest margin

Operating expenses to average assets (1)

Efficiency ratio (1)

Non-performing loans as a percent of total loans receivable

0.98

11.16

3.53

3.68

2.53

67.68

0.31

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

(1) Amounts and performance ratios for 2018 include merger related expenses, branch consolidation expenses, and a tax benefit related to the Tax

Cuts and Jobs Act (“Tax Reform”) totaling $28.2 million with an after tax cost of $22.2, or $0.47 per diluted share. Amounts and performance ratios
for 2017 include merger related expenses, branch consolidation expenses, and additional income tax expense related to Tax Reform of $18.1 million
with an after tax cost of $13.5 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.

2 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 2

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1
0
2
2
7
8
1
o
c

1022781oc

Christopher D. Maher (right)

Chairman of the Board

President and Chief Executive Officer

Joseph J. Lebel III (left)

Executive Vice President and

Chief Operating Officer

DEAR FELLOW
SHAREHOLDERS,

By any measure, 2018 was a year of significant performance and progress
for OceanFirst. Our Company delivered record core net income and strong
financial metrics, while continuing to focus on providing exceptional customer
service. We invested in the talent, technology and solutions to meet the
needs of our customers in a dynamic financial services marketplace. We
demonstrated our proficiency in executing value-added acquisitions that have
expanded our market presence, growth prospects and earnings potential.

DELIVERING RECORD EARNINGS
Reported net income for 2018 was $71.9 million, or $1.51 per diluted share, a
significant increase from $42.5 million, or $1.28 per diluted share, for 2017. Core
earnings for 2018, excluding merger related expenses, branch consolidation
expenses and the impact of Tax Reform, rose 68% from a year ago to a
record $94.1 million, or $1.98 per diluted share. Our performance reflected
the Company’s increased earnings power, due in part to the Sun Bancorp
acquisition, as our income benefitted from growth in earning assets, while we
achieved cost savings from merger synergies and branch consolidation.

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 3

1022781oc

1022781oc.indd 3

299

8.500 in x 11.000 in

OceanFirst Bank

04.16.2019 17:07PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4/16/19 5:02 PM

1022781oc

1
0
2
2
7
8
1
o
c

QUARTERLY
EARNINGS PER SHARE
& EFFICIENCY RATIO(1)

■ Core Efficiency Ratio
■ Core Diluted Earning Per Share

63.58%

$0.30

$0.54

(1) For 2015, 2016, 2017 and 2018, excludes

merger related expenses. For 2016, also

excludes Federal Home Loan Bank prepay-

ment fee and loss on sale of investment

securities. For 2017 and 2018, also excludes

53.54%

the effect of branch consolidation expense

and the additional income tax expense

Q4 ’14

Q2 ’15

Q4 ’15

Q2 ’16

Q4 ’16

Q2 ’17

Q4 ’17

Q2 ’18

Q4 ’18

(benefit) related to Tax Reform.

53.5%

EFFICIENCY RATIO
Q4 2018

Our key performance metrics showed positive momentum.
Core return on average assets for 2018 was 1.28% and core
return on average tangible stockholders’ equity was 14.61%,
significantly better than 2017. These measures strengthened
further in the 2018 fourth quarter, with core return on
average assets of 1.38% and core return on average tangible
stockholders equity of 15.19%. Net interest margin rose to
3.68%, from 3.50% a year ago. Reflecting our sharp focus on
expense control, the core efficiency ratio was 53.54% for the
2018 fourth quarter, and should improve further as we reap the
cost synergies of recent mergers and office consolidations.

At year-end 2018, OceanFirst had over $7.5 billion in total
assets, $5.8 billion in total deposits, and $5.6 billion in loans
receivable. We ended the year with a strong capital position
to support future growth, as well as strong asset quality. Our
performance stands in contrast to the challenging environment
the Company faced throughout 2018. During the year the
Federal Reserve Bank increased short-term interest rates
four times. As a result, the yield curve flattened, testing the
strategies of many of our peers. Careful positioning of the
balance sheet over the past five years has allowed the Bank to
prosper as many peers faced sharply elevated deposit costs,
compressed net interest margins, and decreases in profitability.
Our performance throughout 2018 was recently recognized by
S&P Global, which named OceanFirst to its U.S. top 50 regional
bank performance list.

4 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 4

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1
0
2
2
7
8
1
o
c

1022781oc

INVESTING IN THE FUTURE
All businesses today operate in a digital era in which technology
is drastically reshaping the demands of customers, and the
capacity of organizations to make decisions driven by data and
analytics. We have responded by investing in digital capabilities,
products and services. Our technology-driven solutions now
include a partnership with a capital investment in Nest Egg.
Nest Egg is a digital investment platform, a “hybrid robo-
advisor,” that empowers customers to invest in a way that is
simple, personal, and convenient. We also launched AmiGo, our
“digital banking on the go” product, which enables customers to
bank whenever, wherever and however they want. In addition
to Nest Egg and AmiGo, our portfolio of direct banking services
includes online account opening, mobile banking, P2P transfers,
and access to digital wallet services like Apple Pay and Android
Pay. To ensure that customers get the most out of our digital
solutions, over 500 customer-facing employees have been
certified under our seven-week, proprietary Digital Banker
certification program.

We have invested in a number of other areas, as well. For
example, Commercial Banking received a significant investment
in the areas of Treasury Services and Interest Rate Swap solu-
tions. We also are in the process of adding deeply experienced
commercial bankers to expand into both the Philadelphia and
New York City metropolitan areas.

Our commitment to outstanding service has been recognized
by our customers as well as independent surveys. Customer
satisfaction, as measured by the Net Promoter Score of 63
as of March 31, 2019 indicates our customers’ willingness to
recommend our products or services to others based on their
most recent transactions. We are also honored that OceanFirst
Bank was ranked as one of the country’s Best In-State Banks
and Credit Unions—and #1 in New Jersey—in a first-of-its-
kind nationwide customer survey conducted by Forbes. These
external measurements evidence our committment to building
a quality business.

FOCUS:
DIGITAL BANKING

“OceanFirst will continue

to invest in online and

mobile solutions that

make banking as conve-

nient, personalized and

efficient as possible.”

David Howard

President, Digital Strategy

& Innovation

At a time when customers demand best-in-

class technology from their financial services

providers, digital innovation is critical. We

have placed a sharp focus on this effort, to

ensure that all our digital tools, products,

and customer interfaces are on par with the

best solutions in the market. That means

delivering a fully responsive online banking

experience, with access to the most popular

digital wallets—and even video tellers.

Our mobile app not only allows customers to

manage their OceanFirst accounts, but can

also link to a wide range of investing, lending

and credit card accounts. One of our newest

products, AmiGo by OceanFirst, offers

the “Best Account Ever” and is breaking

new ground in digital marketing to attract

customers that are not drawn to our branch

network. We also offer Nest Egg, the first

“hybrid robo-advisor” offered to banking

customers to help reach their financial goals

through an easy-to-use, low-cost investment

solution, either digitally or with the assistance

of their trusted OceanFirst banker.

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 5

c
o
1
8
7
2
2
0
1

4/16/19 5:02 PM

1022781oc

1022781oc.indd 5

299

8.500 in x 11.000 in

OceanFirst Bank

04.16.2019 17:07PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1
0
2
2
7
8
1
o
c

1022781oc

FOCUS:
BOARD ENGAGEMENT

“It’s important to have leaders with

the skills and experience to guide

OceanFirst forward as we become a

larger and more complex organization.”

Christopher D. Maher

Chairman, President and

Chief Executive Officer

Breadth of experience and diversity of thought
are essential to good governance. At OceanFirst,
we have focused on ensuring that our Board
of Directors reflects the range of skills and
perspectives needed for the effective oversight
of the Company and the successful execution of
our business. To that end, we made several key
additions to the Board in 2018 and early 2019,
including Kimberly Guadagno, the former
Lieutenant Governor of New Jersey; Nicos
Katsoulis, a senior banking executive with
extensive experience in commercial lending; and
Grace Vallacchi, OceanFirst’s EVP and Chief
Risk Officer, who brings deep expertise in risk
management and regulatory oversight.

We also want to take this opportunity to thank
Diane Rhine and Mark Solow, who are retiring
from the Board, for their wise counsel and
commitment to the success of OceanFirst.

Public Company
Governance

Business/Market
Knowledge

Financial Services
Industry

Finance,
Audit & Tax

Large Complex
Organization

C-Suite
Experience

Mergers &
Acquistions

Human
Capital

Risk
Management

Non-Financial
Regulated
Experience

Capital
Markets

Government
Relations

Technology &
Cybersecurity

GROWING THROUGH STRATEGIC ACQUISITIONS
OceanFirst continued its strategic growth trajectory, completing
the acquisition of Sun Bancorp on January 31, 2018. At the time
of closing, Sun had assets of $2.1 billion. With its focus on
community banking, commitment to exceptional customer
service, strong core deposit franchise, and talented team
members, Sun is an excellent complement to OceanFirst.
Together, we have greater critical mass in the attractive New
York and Philadelphia metro areas, enhancing our growth
opportunities. Combining two organizations with overlapping
franchises also provides meaningful potential for increasing
efficiency. We completed the conversion of OceanFirst Bank
to a national commercial bank charter in connection with the
Sun merger, becoming the second largest commercial bank
headquartered in New Jersey.

In the fourth quarter of 2018, OceanFirst agreed to acquire
Capital Bank of New Jersey, with about $499 million in
assets. Capital Bank deepens our penetration of the greater
Philadelphia metro market, adds to our capacity to serve small
and medium-sized businesses, provides strong core funding,
and affords the opportunity to leverage our broader product
offering across Capital Bank’s client base. We were pleased to
close the acquisition of Capital Bank on January 31, 2019, just
98 days following the announcement of the merger agreement.

Since launching our M&A strategy in 2015, OceanFirst’s assets
have increased from $2.4 billion at the end of 2014 to more
than $8.0 billion (including Capital Bank). In a consolidating
industry, where greater scale is required to meet changing
customer needs and invest in innovation, we have built a
solid reputation as an adept and preferred acquirer. Full
integration of Sun’s customer accounts, systems and services
was completed in June 2018, and over 90% of Sun customers
have been retained as of December 31, 2018. Similarly, the
legal closing for Capital Bank was completed in a timely and
professional manner. Full integration of Capital Bank customer
accounts, systems and services is planned for June 2019.

6 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 6

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1
0
2
2
7
8
1
o
c

1022781oc

“We completed the
conversion of OceanFirst
Bank to a national
commercial bank charter
in connection with the
Sun merger, becoming the
second largest commercial
bank headquartered in
New Jersey.”

We also have positioned OceanFirst for future growth by
making our operations more efficient. In 2018, we relocated our
Administrative Offices to a modern facility in Red Bank, New
Jersey, which we refer to as “HQ2.” This enabled us to centralize
and streamline functions that had been spread out across 19
locations. HQ2 is also key to our ability to attract and retain
talent, as it provides a state-of-the-art work environment,
amenities such as a fitness center, and access to a commuter
rail station that connects us with the entire metropolitan area.
We recently announced plans for the possible future expansion
of our Headquarters and Operations Center in Toms River, New
Jersey, or HQ1, securing local approval to add a 79,000 square-
foot addition to our existing operations campus.

CAPITAL MANAGEMENT AND GOVERNANCE
With profitability rising strongly, the internal generation of
capital has accelerated, allowing for a wide range of capital
management strategies. Our first priority has been to build
our capital base, as reflected in the 5% growth in tangible book
value per share in 2018 and the 113 basis point increase in
tangible stockholders’ equity to tangible assets. Strong earnings
also enabled the Board of Directors to increase the cash
dividend in the 2018 third quarter by 13% to $0.17 per share.
Our commitment to shareholder value was further reflected
in the repurchase of 459,251 shares during 2018; at year-end
there were 1.3 million shares remaining under the repurchase
program. Our first priority will be to deploy capital in accretive
organic growth opportunities, followed by value creating
acquisitions, share repurchases, and dividends.

The Board of Directors has continued its commitment to
building a strong corporate governance foundation. This
has included a focus on Board renewal, including updating
committee structures and modernizing policies, as well as
a declassification of the Board. In addition, we have added
directors with the skills and experience to guide the Company
forward as we become a larger and more complex organization.

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 7

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1022781oc

1022781oc.indd 7

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1
0
2
2
7
8
1
o
c

1022781oc

“To live up to our values,
we must support the
communities where we
live and work, while also
providing outstanding
service to our customers, a
rewarding work experience
for our team members,
and excellent results for
our shareholders.”

In June 2018, Kim Guadagno, the former Lieutenant Governor
of New Jersey, was named to the Board. Ms. Guadagno, who
has held a number of elected offices and has been an attorney
for three decades, is highly regarded for her efforts to attract,
retain and support the growth of businesses throughout
New Jersey. Nicos Katsoulis was appointed to the Board,
effective January 1, 2019. Mr. Katsoulis retired as an EVP of
OceanFirst Bank in November 2018, having served as Chief
Lending Officer of Sun at the time of its acquisition. He has
extensive experience in commercial lending, including deep
expertise in the New York metropolitan area, and also served
on the Board of State Bank of Long Island. In recognition of the
vital importance of risk management to our enterprise, Grace
Vallacchi, OceanFirst’s EVP and Chief Risk Officer, was named
to the Board in January 2019. Ms. Vallacchi is an experienced
risk management professional with more than 25 years of
experience in commercial banking and regulatory oversight,
and served in a senior capacity at the Office of the Comptroller
of the Currency prior to joining OceanFirst.

DEVELOPING A TALENTED TEAM
We have continued to invest in attracting, retaining and
developing the talented individuals who are vital to our ability to
serve customers and grow prudently and profitably in a rapidly
changing business landscape. For example, our learning and
development initiatives include a Leadership Development
program that gives employees at various levels throughout the
organization an opportunity to enhance their skills.

Early in 2019, we strengthened our management structure by
appointing several members of our senior leadership team
to new positions. To help manage our growing organization,
EVP Joseph Lebel was named Chief Operating Officer. Given
the increasing importance of technology to our business,
EVP Joseph Iantosca was appointed Chief Information Officer.
Michele Estep was promoted to EVP and Chief Administrative
Officer, expanding on her prior responsibility for Human
Resources. In addition, our information security and regulatory
compliance areas now report to Grace Vallacchi, EVP and
Chief Risk Officer.

8 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 8

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1
0
2
2
7
8
1
o
c

1022781oc

We recognize that diversity and inclusion are essential, not
only to our Company, but also to society as a whole. For that
reason, we joined the more than 500 corporate executives in
signing the “I Act On” pledge created by the organization CEO
Action for Diversity & Inclusion™ to signify our commitment to
advance diversity and inclusion within the workplace. Our
commitment was the first made by any bank headquatered
in the State of New Jersey.

LIVING OUR VALUES
OceanFirst is a company whose roots date back 117 years—
and whose values have been shaped by our role as a
community financial institution. We understand that our long-
term success as a growing business is inseparable from our
role as a good neighbor and responsible corporate citizen.
To live up to our values, we must support the communities
where we live and work, while also providing outstanding
service to our customers, a rewarding work experience for our
team members, and excellent results for our shareholders.

In 2018, we helped first time homebuyers with low to
moderate incomes with more than $3.5 million in mortgage
financing solutions. In addition, as of December 31, 2018, more
than $5.8 million of the Bank’s loan portfolio was financing
organizations supporting community redevelopment.
OceanFirst Foundation awarded more than $2.4 million in
grants to local organizations in such areas as health and
wellness, housing, youth development and education, the arts,
and the overall quality of life in our communities. OceanFirst
employees volunteered their time and energy through
initiatives such as our WaveMakers program, where they lend
their skills to assist nonprofit organizations.

THE BUSINESS ENVIRONMENT
As we compile this update for our shareholders, the current
business environment deserves special note. The last
decade has been defined by one of the longest periods of
economic expansion in our country’s history. While lengthy
as measured in years, the absolute level of growth has been

FOCUS:
CORE VALUES

“Any organization is only

as good as its people—

and the values by which

they live and work.”

Michele Estep

Executive Vice President &

Chief Administrative Officer

As a company that has completed five bank

acquisitions since 2015 and merged the

employees of those five banks with the legacy

OceanFirst team, we recognize the importance

of fostering a shared culture and consistent

values. We have spent considerable time

talking with team members about our mission

and values, which guide us as we serve our

customers, deliver results for shareholders,

engage with our communities, and create a

supportive workplace.

Based on input from our team members, we

adopted a set of strong core values: Leadership,

Teamwork, Performance, Commitment,

Integrity, and Customer Focus. We also

enhanced our mission statement: To build

relationships and financial solutions that empower clients

to achieve their goals. To reinforce the importance

of living our values, an online program enables

our team members to give real-time recognition

to colleagues who exhibit these qualities.

OceanFirst also offers a range of initiatives

to cultivate the talent and interests of our

employees, from leadership development

opportunities to our WaveMakers community

involvement program. In early 2019, we also

were the first New Jersey-based bank to endorse

the I Act On diversity and inclusion pledge.

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 9

c
o
1
8
7
2
2
0
1

4/15/19 8:26 PM

1022781oc

1022781oc.indd 9

299

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

1
0

1
0
2
2
7
8
1
o
c

1022781oc

FOCUS:
TREASURY MANAGEMENT

“With a dedicated service

team and advanced

technology, we’re

committed to helping

Treasury Management

customers bank securely

from their workplace—

or anyplace.”

Jeana Piscatelli

Senior Vice President,

Treasury Management

Major commercial customers and government

entities rely on OceanFirst’s Treasury Manage-

ment services to conduct banking in a safe, secure

and efficient manner. This has been a specialized

strength of the Bank for over 20 years and

customer account balances exceed $2 billion.

As with all of OceanFirst’s products and

services, our Treasury Management solutions

are distinguished by a focus on innovation.

Customers can manage the receipt and

disbursement of funds electronically, with

real-time visibility into cash flows. This reduces

reliance on paper checks, helping to protect

against fraud and enhancing efficiency. Services

like Positive Pay give customers the ability to

control the way payments are verified. And a

dedicated Treasury Client Services team gives

customers access to knowledgeable personnel.

In 2019, we are making additional investments in

technology—to give Treasury Management cus-

tomers access to their accounts via mobile devices

and tablets, as well as their desktops—with the

same user experience and secure environment.

quite modest for the majority of the expansion, suggesting
that the economy is far from overheated. The vast majority
of measurements indicate a healthy economy with ultra-low
unemployment, consumer debt to income levels far lower than
preceding the last downturn, stable FICO scores, and very low
levels of delinquency among bank loans. These indicators,
coupled with benign inflation and continued strong levels of
consumer and business confidence, all point toward continued
economic growth in the quarters ahead.

However, the continued expansion is at risk of encountering a
series of events that could change the direction of the economy
over the coming years. These risks include contagion from a
slowing China and weakened outlook for the European economy,
which could be amplified by a Brexit-triggered series of events.
Beyond the routine business cycle in these economies are the
risks associated with unresolved issues related to tariff levels and
overall trade policy. In addition to global economic risks, the full
range of geo-political considerations, including cybersecurity, is
too extensive to mention.

Closer to home, the northeast U.S. economy is still adapting
to the tax reform act of 2017, which limits the tax deductibility
of state and local taxes. This makes our core markets of
New Jersey, Pennsylvania, and New York more expensive for
individuals and businesses. Local economic and tax policies
have muted economic progress and restricted the growth of
real estate values for the past few years. Regardless of these
policies, our markets continue to be home to approximately
10% of the U.S. population—a population that is one of the
most educated in the country and at the epicenter of the
logistics economy.

Acknowledging risks allows us to plan for a variety of outcomes.
We do not expect to experience a recession in the short
term. However, it is prudent to prepare our business and
our balance sheet for a less accommodating economy. That
means adhering to our risk management program, making

10 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 10

299

8.500 in x 11.000 in

OceanFirst Bank

04.16.2019 15:23PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

0
1

4/16/19 3:09 PM

1
1

1
0
2
2
7
8
1
o
c

1022781oc

“...our markets
continue to be home to
approximately 10% of
the U.S. population–a
population that is one
of the most educated
in the country and at
the epicenter of the
logistics economy.”

prudent loans to strong consumers and quality businesses, and
proactively managing the quality of our balance sheet. These
efforts may result in more conservative organic growth than in
earlier points of the economic expansion, but we continue to
see the opportunity to prudently create shareholder value in
the quarters ahead.

LOOKING AHEAD
At OceanFirst, we have diligently pursued a strategy to build
a banking institution with the competitive scale, breadth
of solutions and innovative spirit to serve the needs of
customers in a changing financial services marketplace. In
doing so, we have also enhanced the Company’s ability to
deliver performance and value for our shareholders and to
support our communities. A key focus for our future will be
on delivering consistent loan growth, and to that end, we
are building meaningful commercial lending businesses in
the Philadelphia and New York metropolitan areas. We will
continue to invest in the talent and technology to provide best-
in-class services and solutions, while striving for exceptional
efficiency, operating excellence and financial performance.

We thank our customers and shareholders for their confidence
in us, our Board of Directors for their sound guidance, and all
of our team members who are devoted to making OceanFirst
a success. Going forward, we remain committed to realizing
OceanFirst’s growth potential, delivering extraordinary customer
service, and building shareholder value.

Christopher D. Maher

Chairman of the Board

Joseph J. Lebel III

Executive Vice President and

President and Chief Executive Officer

Chief Operating Officer

OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report | 11

1022781oc

1022781oc.indd 11

299

8.500 in x 11.000 in

OceanFirst Bank

04.16.2019 16:43PM

1022781oc

brobson (sa1)

1022781oc

ReB

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

1
1

4/16/19 4:39 PM

1
2

1
0
2
2
7
8
1
o
c

1022781oc

OCEANFIRST FINANCIAL CORP.
OCEANFIRST BANK

BOARD OF DIRECTORS
STEVEN E. BRADY
Retired
Ocean Shore Holding Co.

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
Retired
Verizon Communications, Inc.

KIMBERLY M. GUADAGNO, ESQ.
Partner
Connell Foley, LLP

NICOS KATSOULIS
Retired
Sun National Bank

JOHN K. LLOYD
Retired
Hackensack Meridian Health

CHRISTOPHER D. MAHER
Chairman of the Board
President and Chief Executive Officer

DIANE F. RHINE
Childer Sotheby’s
International Realty

MARK G. SOLOW
Retired
GarMark Advisors, LLC

GRACE C. TORRES
Trustee
Prudential Retail Mutual Funds

GRACE M. VALLACCHI
Executive Vice President
Chief Risk Officer

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

DONALD E. MCLAUGHLIN

JAMES T. SNYDER

OCEANFIRST
FINANCIAL CORP.

CORPORATE 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

EXECUTIVE OFFICERS
CHRISTOPHER D. MAHER
Chairman of the Board
President and Chief Executive Officer

MICHELE B. ESTEP
Executive Vice President
Chief Administrative Officer

MICHAEL J. FITZPATRICK
Executive Vice President
Chief Financial Officer

JOSEPH R. IANTOSCA
Executive Vice President
Chief Information Officer

JOSEPH J. LEBEL III
Executive Vice President
Chief Operating Officer

STEVEN J. TSIMBINOS
Executive Vice President
General Counsel

GRACE M. VALLACCHI
Executive Vice President
Chief Risk Officer

REGIONAL PRESIDENTS
VINCENT M. D’ALESSANDRO
President, Southern Region

GEORGE DESTAFNEY
President, Central Region

DANIEL J. HARRIS
President, New York Region

DAVID R. HOWARD
President, Digital Strategy & Innovation

12 | OceanFirst Financial Corp. (NASDAQ: OCFC) 2018 Annual Report

1022781oc

1022781oc.indd 12

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

2
1

4/15/19 8:26 PM

1
3

1
0
2
2
7
8
1
o
c

1022781oc

SENIOR VICE PRESIDENTS
CARLO ALIBRANDI
Commercial Lending

THOMAS ANDO
Commercial Lending

NINA ANUARIO
Business Development

MICHELLE BERRY
Residential Lending

JANET BOSSI
Residential Lending

MICHAEL BOYD
BSA

SHANNAN BOYD
Loan Servicing

MICHAEL COLEMAN
Commercial Lending

SHARON DANIELSON
Deposit Operations

SAMUEL DAVIS
Commercial Credit Administration

CRAIG DEGENOVA
Commerical Lending

MICHAEL DELLABARCA
Commerical Credit Administration

JOHN FINLEY
Commercial Lending

BRADLEY FOUSS
Commercial Lending

EDWARD GELETKA
Retail Sales

ANTHONY GIORDANO
Senior Operations Officer

MARK HARHIGH
Commercial Credit Administration

MICHELE HART
Associate General Counsel

JILL APITO HEWITT
Investor Relations &
Corporate Communications

ANGELA HO
Principal Accounting Officer

SEAN KAUFFMAN
Commercial Lending

KENNETH KELLER
Commercial Lending

JAMES KRUZINSKI
Commercial Lending

JOSEPH LADUCA
Controller

PATRICIA LAIRD
Project Management

CARA LARNED
Marketing

ROBERT LASKOWSKI
Treasurer

RAYMOND LEAHY
Commercial Lending

STACY MATTIA
Commercial Lending

NANCY MAZZA
Financial Services Sales

SCOTT MCLAUGHLIN
Special Assets Group

MICHAEL MESSINA
Commercial Lending

NEENA MILLER
Chief Credit Officer

MICHAEL MOORHEAD
Commercial Credit Administration

EDWARD MORAN
Commercial Lending

VERONICA MOREY
Retail Banking

PATRICIA NELSON
Human Resources

RACHEL O’KEEFE
Wealth Operations & Administration

STEVEN PELLEGRINELLI
Commercial Lending

CHARLES PINTO
Financial Services Sales

JEANA PISCATELLI
Treasury Management

MICHELE POWELCZYK
Commercial Credit Administration

BRIAN SCHAEFFER
Chief Information Security Officer

PAUL SEIDENWAR
Syndications/ABL

NOEL SPEAR
Real Estate Operations

FRANK SUTTON
Commercial Lending

MARK TASY
Retail Banking

WILLIAM TONER
Chief Technology Officer

SUZANNE WEGRYN
Commercial Credit Administration

WENDY WRIGHT
Commercial Credit Administration

1022781oc

1022781oc.indd 13

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

3
1

4/15/19 8:26 PM

1022781oc

1
4

1
0
2
2
7
8
1
o
c

www.oceanfirst.com

NASDAQ: OCFC

888.623.2633

HEADQUARTERS (HQ2)
ADMINISTRATIVE OFFICES
110 West Front Street

INVESTOR RELATIONS
Copies of the Company’s earnings

releases and financial publications,

STOCK TRANSFER AND
REGISTRAR
Shareholders wishing to change the

Red Bank, NJ 07701

including the annual report on Form 10-K

name, address or ownership of stock,

HEADQUARTERS (HQ1)
OPERATIONS CENTER
975 Hooper Avenue

Toms River, NJ 08754-2009

ANNUAL MEETING OF
SHAREHOLDERS
The Annual Meeting of Shareholders will

be held on May 29, 2019 at 6:00 p.m.

at the OceanFirst Bank Administrative

Offices at 110 West Front Street,

Red Bank, New Jersey 07701

(without exhibits) filed with the Securities

to report lost certificates or to consoli-

and Exchange Commission are available

date accounts are asked to contact the

without charge by contacting:

Company’s stock registrar and transfer

Jill Apito Hewitt, Senior Vice President,

agent directly:

Extension 7516 or

American Stock Transfer and Trust Co.

investorrelations@oceanfirst.com

Shareholder Relations Department

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
KPMG LLP

51 John F. Kennedy Parkway

Short Hills, NJ 07078

59 Maiden Lane

New York, NY 10038

(877) 724-6454

1022781oc

1022781oc.indd 14

299

ReB

8.500 in x 11.000 in

OceanFirst Bank

04.15.2019 20:29PM

1022781oc

brobson (sa1)

1022781oc

amoore

file://sanjfs5.sa1.com/Sandy/1022781oc

c
o
1
8
7
2
2
0
1

4
1

4/15/19 8:26 PM