OceanFirst Financial (OCFC) 8-K/A Financial Statements and Exhibits

EXHIBIT 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2016 REFLECTING THE INTEGRATED MERGERS

The following unaudited pro forma condensed combined statement of financial condition gives effect to the acquisition by OceanFirst Financial Corp. (“OceanFirst”) of Ocean Shore Holding Co. (“Ocean Shore”) using the acquisition method of accounting assuming the acquisition was consummated on September 30, 2016. Ocean Shore was acquired by OceanFirst on November 30, 2016.

	OceanFirst Financial Corp. (As Reported)			Ocean Shore Holding Co. (As Reported)			Adjustments to Reflect Acquisition of Ocean Shore Holding Co.			OceanFirst Financial Corp. (Pro-forma)
(Dollars in thousands)
Assets
Cash, due from banks and interest-bearing bank balances and interest-bearing time deposits	$	311,583		$	145,469		$	(41,714	)(a)	$	415,338
Securities and Federal Home Loan Bank Stock		491,428			107,063			24	(b)		598,515
Loans receivable, net		3,028,696			792,945			(16,350	)(c)		3,805,291
Mortgage loans held for sale		21,679			—			—			21,679
Other assets		187,981			42,169			3,372	(d)		233,522
Deferred tax asset		39,391			4,234			2,210	(e)		45,835
Core deposit intangible		3,722			365			7,141	(f)		11,228
Goodwill		66,537			4,630			79,257	(g)		150,424
Total assets	$	4,151,017		$	1,096,875		$	33,940		$	5,281,832
Liabilities And Stockholders’ Equity
Deposits	$	3,324,681		$	857,150		$	772	(h)	$	4,182,603
Federal Home Loan Bank advances and other borrowings		376,623			105,000			—			481,623
Other liabilities		32,469			16,484			(891	)(i)		48,062
Total liabilities		3,733,773			978,634			(119	)		4,712,288
Stockholders’ equity
Common stock		336			73			(73	)(j)		336
Additional paid-in capital		308,979			66,591		$	85,709	(j)		461,279
Retained earnings		236,472			66,583			(66,583	)(j)		236,472
Accumulated other comprehensive loss		(5,611	)		(891	)		891	(j)		(5,611	)
Less: Unallocated common stock held by											—
Employee Stock Ownership Plan		(2,832	)		(2,041	)		2,041	(j)		(2,832	)
Treasury stock		(120,100	)		(11,154	)		11,154	(j)		(120,100	)
Deferred compensation plans trust		—			(920	)		920	(j)		—
Total stockholders’ equity		417,244			118,241			34,059			569,544
Total liabilities and stockholders’ equity	$	4,151,017		$	1,096,875		$	33,940		$	5,281,832

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2015 REFLECTING THE INTEGRATED MERGERS

The following unaudited pro forma condensed combined statement of income for the year ended December 31, 2015 gives effect to OceanFirst’s acquisition of Ocean Shore using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2015. Ocean Shore was acquired by OceanFirst on November 30, 2016.

	OceanFirst Financial Corp. (As Reported)			Cape (As Reported)			Adjustments to Reflect OceanFirst’s Acquisition of Cape			OceanFirst (Pro- forma) with Cape			Ocean Shore Holding Co. (As Reported)		Adjustments to Reflect Acquisition of Ocean Shore Holding Co.			OceanFirst Financial Corp. (Pro- forma)
(Dollars in thousands, except per share data)
INTEREST INCOME
Loans	$	77,694		$	46,372		$	4,945	(k)	$	129,011		$	32,715	$	3,360	(k)	$	165,086
Investment securities and other		8,169			4,703			(225	)(l)		12,647			2,435		—			15,082
Total interest income		85,863			51,075			4,720			141,658			35,150		3,360			180,168
INTEREST EXPENSE
Deposits		4,301			3,675			(565	)(m)		7,411			2,537		(519	)(m)		9,429
Borrowed funds		4,733			2,348			—			7,081			4,159		—			11,240
Total interest expense		9,034			6,023			(565	)		14,492			6,696		(519	)		20,669
Net interest income		76,829			45,052			5,285			127,166			28,454		3,879			159,499
Provision for loan losses		1,275			2,675			—			3,950			689		—			4,639
Net interest income after provision for loan losses		75,554			42,377			5,285			123,216			27,765		3,879			154,860
NON-INTEREST INCOME
Fees and service charges		14,116			4,099			—			18,215			1,986		—			20,201
Net gain on sale of loan servicing		111			—			—			111			—		—			111
Net gain on sale of loans available for sale		822			68			—			890			—		—			890
Net gain on sale of investment securities available for sale, net		—			150			—			150			3		—			153
Net loss from other real estate operations		(149	)		(297	)		—			(446	)		—		—			(446	)
Income from Bank Owned Life Insurance		1,501			1,211			—			2,712			629		—			3,341
Bargain purchase gain		—			6,479			—			6,479			—		—			6,479
Other		25			766			—			791			1,772		—			2,563
Total non-interest income		16,426			12,476			—			28,902			4,390		—			33,292
NON-INTEREST EXPENSE
Compensation and employee benefits		31,946			19,103			—			51,049			12,864		—			63,913
Occupancy and equipment		9,447			4,000			(78	)(n)		13,369			5,001		83	(n)		18,453
Other operating expense		17,483			13,507			—			30,990			3,927		—			34,917
Amortization of core deposit intangible		21			144			517	(o)		682			96		1,269	(o)		2,047
Merger related expense		1,878			2,305			—			4,183			—		—			4,183
Total non-interest expense		60,775			39,059			439			100,273			21,888		1,352			123,513
Income before provision for income taxes		31,205			15,794			4,846			51,845			10,267		2,527			64,639
Provision for income taxes		10,883			3,639			1,696	(q)		16,218			3,399		884	(q)		20,501
Net income	$	20,322		$	12,155		$	3,150		$	35,627		$	6,868	$	1,643		$	44,138
Net income per common share
Basic	$	1.22		$	0.97		$	—		$	1.45		$	1.14		—			1.45
Diluted	$	1.21		$	0.96		$	—		$	1.43		$	1.12		—			1.43
Weighted average common shares
Basic		16,600			12,548			(4,549	)(r)		24,599			6,015		(200	)(r)		30,414
Diluted		16,811			12,718			(4,610	)(r)		24,919			6,124		(204	)(r)		30,839

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 REFLECTING THE INTEGRATED MERGERS

The following unaudited pro forma condensed combined statement of income for the nine months ended September 30, 2016 gives effect to OceanFirst’s acquisition of Ocean Shore using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2016. Ocean Shore was acquired by OceanFirst on November 30, 2016.

	OceanFirst Financial Corp. (As Reported)			Cape January 1, 2016 to May 1, 2016			Adjustments to Reflect OceanFirst’s Acquisition of Cape			OceanFirst (Pro- forma) with Cape			Ocean Shore Holding Co. (As Reported)		Adjustments to Reflect Acquisition of Ocean Shore Holding Co.			OceanFirst Financial Corp. (Pro- forma)
(Dollars in thousands, except per share data)
INTEREST INCOME
Loans	$	86,163		$	18,207		$	1,777	(k)	$	106,147		$	24,370	$	2,646	(k)	$	133,163
Investment securities and other		7,358			1,778			(78	)(l)		9,058			2,044		—			11,102
Total interest income		93,521			19,985			1,699			115,205			26,414		2,646			144,265
INTEREST EXPENSE
Deposits		5,125			1,349			(220	)(m)		6,254			1,988		(443	)(m)		7,799
Borrowed funds		3,888			3,108			—			6,996			2,517		—			9,513
Total interest expense		9,013			4,457			(220	)		13,250			4,505		(443	)		17,312
Net interest income		84,508			15,528			1,919			101,955			21,909		3,089			126,953
Provision for loan losses		2,113			1,216			—			3,329			463		—			3,792
Net interest income after provision for loan losses		82,395			14,312			1,919			98,626			21,446		3,089			123,161
NON-INTEREST INCOME
Fees and service charges		12,600			1,376			—			13,976			1,350		—			15,326
Net gain on sale of loans available for sale		696			93			—			789			—		—			789
Net gain (loss) on sale of investment securities available for sale, net		(12	)		61			—			49			37		—			86
Net loss (gain) from other real estate operations		(782	)		101			—			(681	)		—		—			(681	)
Income from Bank Owned Life Insurance		1,520			436			—			1,956			469		—			2,425
Other		133			163			—			296			1,281		—			1,577
Total non-interest income		14,155			2,230			—			16,385			3,137		—			19,522
NON-INTEREST EXPENSE
Compensation and employee benefits		33,456			7,496			—			40,952			9,994		—			50,946
Occupancy and equipment		9,557			1,615			(26	)(n)		11,146			3,573		62	(n)		14,781
Other operating expense		17,017			4,379			—			21,396			3,117		—			24,513
Amortization of core deposit intangible		319			62			163	(o)		544			75		949	(o)		1,568
Expense from prepayment of borrowings		136			749			—			885			—		—			885
Merger related expense		9,902			4,237			(13,486	)(p)		653			—		—			653
Total non-interest expense		70,387			18,538			(13,349	)		75,576			16,759		1,011			93,346
Income before provision for income taxes		26,163			(1,996	)		15,268			39,435			7,824		2,078			49,337
Provision for income taxes		9,169			984			4,781	(q)		14,934			2,591		727	(q)		18,252
Net income	$	16,994		$	(2,980	)	$	10,487		$	24,501		$	5,233	$	1,351		$	31,085
Net income per common share
Basic	$	0.79		$	(0.23	)	$	—		$	0.82		$	0.85		—			0.87
Diluted	$	0.77		$	(0.23	)	$	—		$	0.81		$	0.84		—			0.85
Weighted average common shares
Basic		21,624			12,815			(4,645	)(r)		29,794			6,159		(205	)(r)		35,748
Diluted		21,990			13,107			(4,751	)(r)		30,346			6,248		(208	)(r)		36,386

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(a) Adjustment reflects payment of transaction expenses of $13.2 million (which includes certain cash payments made to Ocean Shore executive officers pursuant to the terms of their change in control agreements) and payment of cash consideration of $28.4 million to Ocean Shore stockholders, representing $4.35 for each share of Ocean Shore common stock held by Ocean Shore stockholders.

(b) Adjustment reflects the fair value premium on investment securities held to maturity.

(c) Adjustment reflects elimination of Ocean Shore’s historical allowance for loan losses, a fair value discount due to interest rates, net of deferred fees, and a fair value discount due to credit.

(d) Adjustment reflects the fair value premium on land and buildings.

(e) Adjustment reflects the tax impact of pro forma accounting fair value adjustments.

(f) Adjustment reflects the fair value of acquired core deposit intangible of $7.5 million, net of Ocean Shore’s existing core deposit intangible of $365,000. The core deposit intangible is calculated as the present value of the difference between a market participant’s cost of obtaining alternative funds and the cost to maintain the acquired deposit base. Deposit accounts that are evaluated as part of the core deposit intangible include demand deposit, money market and savings accounts.

(g) Adjustment reflects the excess of the purchase price over the fair value of net assets acquired, net of Ocean Shore’s existing goodwill balance. The stock portion of the purchase price is based upon $23.72 per share, the closing price of OceanFirst common stock on November 30, 2016.

(h) Adjustment reflects the fair value premium on time deposits which was calculated by discounting future contractual payments at a current market interest rate.

(i) Adjustment reflects the effect on current taxes payable of the fair value adjustments.

(j) Adjustment reflects elimination of Ocean Shore’s historical stockholders’ equity and the issuance of common stock by OceanFirst as a portion of the merger consideration.

(k) Interest income on loans was adjusted to reflect the difference between the contractual interest rate earned on loans and estimated discount accretion over the remaining life of the acquired loans based on current market yields for similar loans.

(l) Interest income on securities was adjusted to reflect the difference between the contractual interest rate earned on securities and estimated premium amortization over the remaining life of the securities based on current market yields for similar securities.

(m) Interest expense on deposits was adjusted to reflect the amortization of the time deposit fair value premium over the remaining life of the deposits.

(n) Occupancy expense was adjusted to reflect the (accretion) amortization of the fair value (discount) premium on buildings over their estimated useful life.

(o) Adjustment reflects the amortization of core deposit intangible over an estimated ten year useful life and calculated on a sum of the years digits basis.

(p) Adjustment to remove the merger related expenses related to the Cape acquisition.

(q) Adjustment reflects the tax impact of the pro forma purchase accounting adjustments.

(r) Adjustment reflects the conversion of weighted average shares (basic and diluted) into equivalent shares of OceanFirst common stock based on the applicable exchange ratio.