OceanFirst Financial (OCFC) 8-K Continuation of Quarterly Dividend

Exhibit 99.1

Contact:	Company:
The Foristall Company, Inc.	Michael J. Fitzpatrick
Thomas F. Curtin	Chief Financial Officer
Tel: (610)398-3022	OceanFirst Financial Corp.
Fax: (610)530-7781	Tel: (732)240-4500, ext. 7506
email:foristal@aol.com	Fax: (732)349-5070
	email:Mfitzpatrick@oceanfirst.com

FOR IMMEDIATE RELEASE

OceanFirst Financial Corp.

ANNOUNCES 17.6% INCREASE IN QUARTERLY EARNINGS AND

CONTINUATION OF QUARTERLY DIVIDEND

TOMS RIVER, NEW JERSEY, January 20, 2005…OceanFirst Financial Corp. (NASDAQ:OCFC), the holding company for OceanFirst Bank, today announced that diluted earnings per share for the quarter ended December 31, 2004 increased 17.6% to $.40 from $.34 for the corresponding prior year period. For the year ended December 31, 2004 diluted earnings per share were $1.42, as compared to $1.53 per share for the prior year. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $.20 per share—covering the three month period ended December 31, 2004—to be paid on February 11, 2005, to shareholders of record on January 28, 2005.

In making today’s announcement, John R. Garbarino, Chairman, President and Chief Executive Officer said, “On behalf of the Board of Directors, I am pleased to report exceptionally strong earnings performance for the fourth quarter. The diluted earnings per share of $.40 also represents a continued significant increase over the $.32 and $.35, respectively, reported for the second and third quarters. The earnings growth is reflective of our efforts in early 2004 to bolster our senior management team and expand our loan production platform. I am also pleased to announce our thirty-second consecutive quarterly cash dividend reflecting an attractive 3.5% yield on our common stock.”

Mr. Garbarino continued, “Strong deposit growth continued for the third consecutive quarter. During the fourth quarter, deposits increased $37.3 million, a 12.1% annualized rate. For the full year, deposits increased by 11.0% or $126.3 million and loans receivable increased 6.0%, or $83.7 million.”

Results of Operations

Net interest income for the quarter ended December 31, 2004 increased to $14.5 million, as compared to $13.6 million in the same prior year period. For the year ended December 31, 2004, net interest income decreased to $56.0 million, as compared to $57.6 million for the same prior year period. For the quarter and year ended December 31, 2004, average interest earning assets increased while the net interest margin declined as compared to the same prior year periods. The net interest margin decreased to 3.23% for the quarter and year ended December 31, 2004, from 3.30% and 3.48%, respectively, in the same prior year periods. The yield on interest-earning assets decreased to 5.26% and 5.25%, respectively, for the quarter and year ended December 31, 2004, as compared to 5.37% and 5.71%, respectively, for the same prior year periods. High loan prepayment levels over the past year resulted in a significant decrease in the rate earned on mortgage-related assets. The cost of interest-bearing liabilities decreased to 2.23% and 2.22%, respectively, for the quarter and year ended December 31, 2004, as compared to 2.29% and 2.47%, respectively, in the same prior year periods.

Other income increased to $6.6 million and $20.7 million, respectively, for the quarter and year ended December 31, 2004, from $5.6 million and $18.7 million in the same prior year periods. For the quarter and year ended December 31, 2004, the Company recorded gains of $4.1 million and $10.8 million, respectively, on the sale of loans and securities, as compared to

gains of $3.1 million and $11.8 million, respectively, in the same prior year periods. For the year ended December 31, 2004 the gain on sales of loans and securities includes a gain of $186,000, on the sale of equity securities. For the quarter and year ended December 31, 2003, the gain on sales of loans and securities includes a gain of $396,000 and $719,000, respectively, on the sale of equity securities. Loan servicing income increased by $3.0 million for the year ended December 31, 2004, as compared to the same prior year period due to the recognition of an impairment to the loan servicing asset of $2.2 million for the year ended December 31, 2003.

Operating expenses amounted to $13.4 million and $48.8 million, respectively, for the quarter and year ended December 31, 2004, as compared to $12.4 million and $44.9 million, respectively, for the corresponding prior year periods. For the quarter and year-to-date, compensation expense increased due to costs related to the third quarter 2004 acquisition of a consumer direct lending operation by Columbia Home Loans, LLC, the Company’s mortgage banking subsidiary. The increase for the full year was also due to the significant reduction in mortgage loan closings as refinance activity declined from year ago levels. Higher loan closings in the earlier periods increased deferred loan expenses which were reflected as a reduction to compensation expense.

Financial Condition

Loans receivable net, increased by $83.7 million at December 31, 2004 as compared to December 31, 2003. Commercial loans outstanding increased $46.3 million, or 17.9%.

Deposits increased $126.3 million to $1,270.5 million at December 31, 2004 from $1,144.2 million at December 31, 2003. Core deposits grew $41.0 million while time deposits increased $85.3 million.

Stockholders’ equity increased by $3.3 million to $138.0 million at December 31, 2004 as compared to $134.7 million at December 31, 2003. For the year ended December 31, 2004, 674,339 common shares were repurchased at a total cost of $16.2 million. Under the 10% repurchase program authorized by the Board of Directors in October 2003, 750,055 shares remain to be purchased as of December 31, 2004. The cost of share repurchases was offset by net income and proceeds from stock option exercises and related tax benefit.

Asset Quality

The Company’s non-performing assets totaled $3.8 million at December 31, 2004 as compared to $2.4 million at December 31, 2003 with most of the increase relating to one non-performing commercial loan with an outstanding balance of $1.1 million which the Company had previously classified as substandard at December 31, 2003. For year ended December 31, 2004 the Company realized net loan charge-offs of $414,000.

OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered stock savings bank with $1.9 billion in assets and seventeen branches located in Ocean, Monmouth and Middlesex counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.’s press releases are available at no charge by visiting us on the worldwide web at http://www.oceanfirst.com.

Forward-Looking Statements

This news release contains certain forward-looking statements 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,” or similar expressions. 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 the subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles and guidelines. These risks and uncertainties 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, except per share amounts)

	December 31, 2004			December 31, 2003
ASSETS
Cash and due from banks	$	74,021		$	36,172
Investment securities available for sale		83,960			80,458
Federal Home Loan Bank of New York stock, at cost		21,250			19,220
Mortgage-backed securities available for sale		124,478			86,938
Loans receivable, net		1,472,907			1,389,220
Mortgage loans held for sale		63,961			33,207
Interest and dividends receivable		6,033			5,477
Real estate owned, net		288			252
Premises and equipment, net		16,037			16,473
Servicing asset		8,790			7,473
Bank Owned Life Insurance		34,990			33,948
Other assets		7,560			8,571
Total assets	$	1,914,275		$	1,717,409
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	1,270,535		$	1,144,205
Securities sold under agreements to repurchase with retail customers		45,072			36,723
Securities sold under agreements to repurchase with the Federal Home Loan Bank		106,000			70,000
Federal Home Loan Bank advances		312,000			314,400
Advances by borrowers for taxes and insurance		6,289			6,152
Other liabilities		36,423			11,267
Total liabilities		1,776,319			1,582,747
Stockholders’ equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized, no shares issued		—			—
Common stock, $.01 par value, 55,000,000 shares authorized, 27,177,372 shares issued and 13,024,204 and 13,350,999 shares outstanding at December 31, 2004 and December 31, 2003, respectively		272			272
Additional paid-in capital		193,723			189,615
Retained earnings		157,575			150,804
Accumulated other comprehensive loss		(667	)		(3,400	)
Less: Unallocated common stock held by Employee Stock Ownership Plan		(8,652	)		(9,911	)
Treasury stock, 14,153,168 and 13,826,373 shares at December 31, 2004 and December 31, 2003, respectively		(204,295	)		(192,718	)
Total stockholders’ equity		137,956			134,662
Total liabilities and stockholders’ equity	$	1,914,275		$	1,717,409

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	For the quarter ended December 31,				For the year ended December 31,
	2004		2003		2004		2003
	(Unaudited)
Interest income:
Loans	$	21,645	$	20,823	$	83,594	$	86,881
Mortgage-backed securities		1,143		799		4,363		4,440
Investment securities and other		801		475		2,995		3,216
Total interest income		23,589		22,097		90,952		94,537
Interest expense:
Deposits		4,270		3,686		15,194		17,243
Borrowed funds		4,837		4,851		19,737		19,651
Total interest expense		9,107		8,537		34,931		36,894
Net interest income		14,482		13,560		56,021		57,643
Provision for loan losses		150		15		300		688
Net interest income after provision for loan losses		14,332		13,545		55,721		56,955
Other income:
Loan servicing income (loss)		57		105		328		(2,654	)
Fees and service charges		2,118		2,005		8,289		7,860
Net gain on sales of loans and securities available for sale		4,060		3,105		10,832		11,842
Net income from other real estate operations		10		7		7		113
Income from Bank Owned Life Insurance		351		375		1,256		1,550
Other		11		12		28		38
Total other income		6,607		5,609		20,740		18,749
Operating expenses:
Compensation and employee benefits		7,446		6,421		27,242		22,240
Occupancy		1,083		929		3,840		3,592
Equipment		598		625		2,341		2,434
Marketing		772		855		2,020		2,193
Federal deposit insurance		120		119		478		478
Data processing		736		759		2,959		2,994
General and administrative		2,619		2,663		9,879		10,926
Total operating expenses		13,374		12,371		48,759		44,857
Income before provision for income taxes		7,565		6,783		27,702		30,847
Provision for income taxes		2,572		2,436		9,757		10,974
Net income	$	4,993	$	4,347	$	17,945	$	19,873
Basic earnings per share	$	0.42	$	0.36	$	1.48	$	1.62
Diluted earnings per share	$	0.40	$	0.34	$	1.42	$	1.53
Average basic shares outstanding		12,016		12,015		12,108		12,291
Average diluted shares outstanding		12,610		12,832		12,666		13,017
Cash earnings (1)	$	5,957	$	5,460	$	21,294	$	23,459
Diluted cash earnings per share	$	0.47	$	0.43	$	1.68	$	1.80

(1) Cash earnings are determined by adding (net of taxes) to reported earnings the non-cash expenses stemming from the amortization and appreciation of allocated shares in the company’s stock-related benefit plans and the amortization of intangible assets.

OceanFirst Financial Corp.

SELECTED CONSOLIDATED FINANCIAL DATA

(in thousands, except per share amounts)

	At December 31, 2004			At December 31, 2003
STOCKHOLDERS’ EQUITY
Stockholders’ equity to total assets		7.21	%		7.84	%
Common shares outstanding (in thousands)		13,024			13,351
Stockholders’ equity per common share	$	10.59		$	10.09
Tangible stockholders’ equity per common share		10.49			9.98
ASSET QUALITY
Allowance for loan losses	$	10,688		$	10,802
Nonperforming loans		3,488			2,162
Nonperforming assets		3,776			2,414
Allowance for loan losses as a percent of total loans receivable		0.69	%		0.75	%
Allowance for loan losses as a percent of nonperforming loans		306.42			499.63
Nonperforming loans as a percent of total loans receivable		0.23			0.15
Nonperforming assets as a percent of total assets		0.20			0.14

	For the quarter ended December 31				For the year ended December 31
	2004		2003		2004		2003
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets	1.05	%	1.00	%	0.98	%	1.14	%
Return on average stockholders’ equity	14.73		13.15		13.34		14.84
Interest rate spread	3.03		3.08		3.03		3.24
Interest rate margin	3.23		3.30		3.23		3.48
Operating expenses to average assets	2.82		2.84		2.67		2.57
Efficiency ratio	63.42		64.54		63.52		58.72

CASH EARNINGS

Although reported earnings and return on stockholders’ equity are traditional measures of performance, the Company believes that the change in stockholders’ equity or “cash earnings,” and related return measures are also a significant measure of a company’s performance. Cash earnings exclude the effects of various non-cash expenses, such as the employee stock plans amortization expense and related tax benefit, as well as the amortization of intangible assets. The following table reconciles the Company’s net income with cash earnings. The table is a pro forma calculation which is not in accordance with GAAP.

	For the quarter ended December 31						For the year ended December 31
	2004			2003			2004			2003
Net income	$	4,993		$	4,347		$	17,945		$	19,873
Add: Employee stock plans amortization expense		1,128			1,301			3,793			4,075
Amortization of intangible assets		26			26			103			103
Less: Tax benefit(1)		(190	)		(214	)		(547	)		(592	)
Cash earnings	$	5,957		$	5,460		$	21,294		$	23,459
Basic cash earnings per share	$	.50		$	0.45		$	1.76		$	1.91
Diluted cash earnings per share	$	.47		$	0.43		$	1.68		$	1.80

⁽¹⁾ The Company does not receive any tax benefit for that portion of employee stock plan amortization expense relating to the ESOP fair market value adjustment.

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(in thousands)

	At December 31, 2004			At December 31, 2003
LOANS RECEIVABLE
Real estate:
One- to four-family	$	1,126,585		$	1,081,902
Commercial real estate, multi- family and land		243,299			205,066
Construction		19,189			11,274
Consumer		99,279			81,455
Commercial		61,290			53,230
Total loans		1,549,642			1,432,927
Loans in process		(5,970	)		(3,829	)
Deferred origination costs, net		3,888			4,136
Unearned discount		(4	)		(5	)
Allowance for loan losses		(10,688	)		(10,802	)
Total loans, net		1,536,868			1,422,427
Less: mortgage loans held for sale		63,961			33,207
Loans receivable, net	$	1,472,907		$	1,389,220
Mortgage loans serviced for others	$	805,375		$	723,303
Loan pipeline		250,657			194,124

	For the quarter ended December 31					For the year ended December 31
	2004		2003			2004		2003
Loan originations	$	305,996	$	227,510		$	1,022,735	$	1,183,688
Loans sold		183,773		142,756			499,232		622,245
Net charge-offs (recovery)		337		(4	)		414		(40	)

	At December 31, 2004		At December 31, 2003
DEPOSITS
Type of Account
Non-interest bearing	$	106,492	$	108,668
NOW		297,919		249,254
Money market deposit		142,893		138,812
Savings		250,032		259,629
Time deposits		473,199		387,842
	$	1,270,535	$	1,144,205

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

	FOR THE QUARTERS ENDED DECEMBER 31,
	2004						2003
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST		AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and short term investments	$	20,934	$	102	1.95	%	$	8,765	$	20	0.91	%
Investment securities		84,809		570	2.69			86,775		455	2.10
FHLB stock		21,859		129	2.36			20,095		—	—
Mortgage-backed securities		131,774		1,143	3.47			94,636		799	3.38
Loans receivable, net (1)		1,534,254		21,645	5.64			1,435,698		20,823	5.80
Total interest-earning assets		1,793,630		23,589	5.26			1,645,969		22,097	5.37
Non-interest earning assets		100,292						98,757
Total assets	$	1,893,922					$	1,744,726
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	703,353		1,250	0.71		$	659,544		969	0.59
Time deposits		454,599		3,020	2.66			394,340		2,717	2.76
Total		1,157,952		4,270	1.48			1,053,884		3,686	1.40
Borrowed funds		475,158		4,837	4.07			435,747		4,851	4.45
Total interest-bearing liabilities		1,633,110		9,107	2.23			1,489,631		8,537	2.29
Non-interest-bearing deposits		111,988						108,689
Non-interest bearing liabilities		13,262						14,176
Total liabilities		1,758,360						1,612,496
Stockholders’ equity		135,562						132,230
Total liabilities and stockholders’ equity	$	1,893,922					$	1,744,726
Net interest income			$	14,482					$	13,560
Net interest rate spread (2)					3.03	%					3.08	%
Net interest margin (3)					3.23	%					3.30	%

	FOR THE YEARS ENDED DECEMBER 31,
	2004						2003
	AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST		AVERAGE BALANCE		INTEREST		AVERAGE YIELD/ COST
	(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and short term investments	$	14,527	$	190	1.31	%	$	12,115	$	127	1.05	%
Investment securities		85,258		2,400	2.81			88,966		2,339	2.63
FHLB stock		22,357		405	1.81			19,518		750	3.84
Mortgage-backed securities		130,749		4,363	3.34			116,633		4,440	3.81
Loans receivable, net (1)		1,479,504		83,594	5.65			1,419,477		86,881	6.12
Total interest-earning assets		1,732,395		90,952	5.25			1,656,709		94,537	5.71
Non-interest earning assets		97,072						90,698
Total assets	$	1,829,467					$	1,747,407
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Transaction deposits	$	678,273		4,216	0.62		$	648,970		4,794	0.74
Time deposits		414,393		10,978	2.65			421,157		12,449	2.96
Total		1,092,666		15,194	1.39			1,070,127		17,243	1.61
Borrowed funds		478,740		19,737	4.12			424,829		19,651	4.63
Total interest-bearing liabilities		1,571,406		34,931	2.22			1,494,956		36,894	2.47
Non-interest-bearing deposits		111,135						102,294
Non-interest bearing liabilities		12,378						16,226
Total liabilities		1,694,919						1,613,476
Stockholders’ equity		134,548						133,931
Total liabilities and stockholders’ equity	$	1,829,467					$	1,747,407
Net interest income			$	56,021					$	57,643
Net interest rate spread (2)					3.03	%					3.24	%
Net interest margin (3)					3.23	%					3.48	%

(1) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.

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

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