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 11.1% INCREASE IN
QUARTERLY EARNINGS PER SHARE,
AND 11.1% INCREASE TO THE
QUARTERLY DIVIDEND
TOMS RIVER, NEW JERSEY, April 24, 2003...OceanFirst Financial Corp.
(NASDAQ:OCFC), the holding company for OceanFirst Bank, today announced diluted
earnings per share for the quarter ended March 31, 2003 of $.40, an 11.1%
increase over the $.36 per diluted share for the same prior year quarter. The
Company also announced that its Board of Directors approved an increase in the
regular quarterly cash dividend to $.20 per share--covering the three month
period ended March 31, 2003--to be paid on May 16, 2003, to shareholders of
record on May 2, 2003. The Company had previously paid an $.18 per share
quarterly cash dividend.
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 announce the second increase to our cash dividend over the past year
and the ninth increase since the
Company's initial dividend in 1997. Since that time, the cash dividend has been
increased by 200%."
Results of Operations
Net interest income for the three months ended March 31, 2003 amounted
to $15.4 million as compared to $15.7 million in the same prior year period,
reflecting lower levels of interest-earning assets and a slightly lower net
interest margin. Interest-earning assets decreased as cash flow was utilized to
reduce outstanding wholesale borrowings and repurchase common stock. The net
interest margin decreased to 3.73% for the three months ended March 31, 2003
from 3.75% in the same prior year period. The yield on interest-earning assets
decreased to 6.17% as compared to 6.81% for the same prior year period. Despite
this decline, which was reflective of the general interest rate environment, the
asset yield still benefited from the Bank's loan growth which was partly funded
by reductions in the lower-yielding mortgage-backed securities available for
sale portfolio. For the three months ended March 31, 2003 loans receivable
represented 85.8% of average interest-earning assets as compared to 80.6% for
the same prior year period. The asset yield for the quarter benefited from
$407,000 of income reflecting realized appreciation in an equity investment. The
comparable benefit for the prior year period was $600,000. The cost of
interest-bearing liabilities decreased to 2.69% for the three months ended March
31, 2003, as compared to 3.36% in the same prior year period. Funding costs
benefited from the Company's focus on lower cost core deposit growth. Core
deposits (including non-interest-bearing deposits) represented 60.7% of average
deposits for the three months ended March 31, 2003 as compared to 52.6% for the
same prior year period.
Other income increased to $3.7 million for the three months ended March
31, 2003 from $2.4 million in the same prior year period. Fees and service
charges increased by 26.9%, or $387,000, for the three months ended March 31,
2003 as compared to the same prior year period due to the growth in commercial
account services, retail core account balances and trust fees. For the three
months ended March 31, 2003 the Company recorded a gain of $2.5 million on the
sale of loans and securities, as compared to a gain of $394,000 in the same
prior year period. For the three months ended March 31, 2003, the gain on sales
of loans and securities includes a gain of $323,000 on the sale of equity
securities. Loan servicing income decreased by $1.2 million for the three months
ended March 31, 2003, as compared to the same prior year period due to the
current period recognition of an impairment to the loan servicing asset for $1.0
million.
Operating expenses amounted to $10.6 million for the three
months ended March 31, 2003, as compared to $9.9 million for the corresponding
prior year period. The increase was principally due to the costs associated with
the opening of the Bank's seventeenth branch office in May 2002, as well as
higher loan related expenses. Additionally, ESOP expense increased by $113,000
due to the higher average market price for OCFC shares during the first quarter
of 2003 as compared to the same prior year quarter.
Financial Condition
Loans receivable net, increased by $798,000 at March 31, 2003 as
compared to December 31, 2002. Commercial loans outstanding increased $7.1
million, or 13.1% on an annualized basis, while 1-4 family mortgage loans
declined during the period due to sale activity.
Deposits decreased to $1,151.9 million at March 31, 2003 from $1,184.8
million at December 31, 2002. Core deposits, however, the Company's primary
focus, grew $6.1 million (net of the $11.6 million transfer mentioned below)
while certificate balances declined. During the quarter a large commercial
deposit relationship transferred $11.6 million to the securities sold under
agreements to repurchase account.
Stockholders' equity increased by $67,000 to $135.4 million at March
31, 2003 as compared to $135.3 million at December 31, 2002. For the quarter,
310,800 common shares were repurchased at a total cost of $6.8 million. Under
the 10% repurchase program authorized
by the Board of Directors in August 2002, 639,035 shares remain to be purchased
as of March 31, 2003. The cost of share repurchases was partly offset by the
proceeds from stock option exercises and the related tax benefit.
Asset Quality
The Company's non-performing assets totaled $3.7 million at March 31,
2003 as compared to $2.8 million at December 31, 2002 with the entire increase
relating to 1-4 family and consumer loans. There were no loan charge-offs for
the quarter ended March 31, 2003.
OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded in
1902, is a federally-chartered stock savings bank with $1.7 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)
March 31, December 31, March 31,
2003 2002 2002
----------- ----------- ---------
(Unaudited) (Unaudited)
ASSETS
Cash and due from banks $ 35,104 $ 17,192 $ 19,167
Investment securities available for sale 77,823 91,978 78,330
Federal Home Loan Bank of New York
stock, at cost 19,850 18,700 23,885
Mortgage-backed securities available for sale 142,587 138,657 199,531
Loans receivable, net 1,336,696 1,335,898 1,253,340
Mortgage loans held for sale 57,211 66,626 73,473
Interest and dividends receivable 6,572 6,378 8,066
Real estate owned, net - 141 181
Premises and equipment, net 17,320 17,708 17,616
Servicing asset 7,328 7,907 8,477
Bank Owned Life Insurance 32,818 32,398 31,048
Other assets 11,628 10,115 9,385
---------- ----------- ----------
Total assets $1,744,937 $1,743,698 $1,722,499
========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $1,151,882 $ 1,184,836 $1,114,030
Securities sold under agreements to repurchase
with retail customers 52,870 44,584 36,127
Securities sold under agreements to repurchase
with the Federal Home Loan Bank 115,000 140,000 155,000
Federal Home Loan Bank advances 269,500 214,000 258,200
Advances by borrowers for taxes and insurance 6,789 5,952 6,504
Other liabilities 13,524 19,021 9,343
---------- ----------- ----------
Total liabilities 1,609,565 1,608,393 1,579,204
---------- ----------- ----------
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 13,777,942, 13,757,880
and 14,503,472 shares outstanding at March 31, 2003,
December 31, 2002 and March 31, 2002, respectively 272 272 272
Additional paid-in capital 186,740 184,934 182,642
Retained earnings 144,067 142,224 134,615
Accumulated other comprehensive loss (4,429) (3,201) (3,011)
Less: Unallocated common stock held by
Employee Stock Ownership Plan (10,913) (11,248) (12,309)
Treasury stock, 13,399,430, 13,419,492 and
12,673,900 shares at March 31, 2003,
December 31, 2002 and March 31, 2002, respectively (180,365) (177,676) (158,914)
---------- ----------- ----------
Total stockholders' equity 135,372 135,305 143,295
---------- ----------- ----------
Total liabilities and stockholders' equity $1,744,937 $ 1,743,698 $1,722,499
========== =========== ==========
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the three months
ended March 31,
2003 2002
---- ----
(Unaudited)
Interest income:
Loans $22,746 $23,856
Mortgage-backed securities 1,436 3,098
Investment securities and other 1,246 1,460
------- -------
Total interest income 25,428 28,414
------- -------
Interest expense:
Deposits 5,233 7,385
Borrowed funds 4,808 5,361
------- -------
Total interest expense 10,041 12,746
------- -------
Net interest income 15,387 15,668
Provision for loan losses 375 500
------- -------
Net interest income after provision
for loan losses 15,012 15,168
------- -------
Other income:
Loan servicing (loss) income (1,190) 41
Fees and service charges 1,824 1,437
Net gain on sales of loans and securities available for sale 2,505 394
Net income from other real estate operations 110 19
Income on Bank Owned Life Insurance 420 524
Other 11 10
------- -------
Total other income 3,680 2,425
------- -------
Operating expenses:
Compensation and employee benefits 5,093 5,262
Occupancy 937 792
Equipment 591 543
Marketing 421 424
Federal deposit insurance 93 126
Data processing 715 588
General and administrative 2,766 2,143
------- -------
Total operating expense 10,616 9,878
------- -------
Income before provision for income taxes 8,076 7,715
Provision for income taxes 2,827 2,666
------- -------
Net income $ 5,249 $ 5,049
======= =======
Basic earnings per share $ 0.42 $ 0.38
======= =======
Diluted earnings per share $ 0.40 $ 0.36
======= =======
Average basic shares outstanding 12,442 13,182
======= =======
Average diluted shares outstanding 13,210 13,895
======= =======
Cash earnings (1) $ 6,010 $ 5,795
====== =======
Diluted cash earnings per share $ 0.45 $ 0.42
======= =======
(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 March 31, 2003 At December 31, 2002 At March 31, 2002
----------------- -------------------- -----------------
STOCKHOLDERS' EQUITY
Stockholders' equity to total assets 7.76% 7.76% 8.32%
Common shares outstanding (in thousands) 13,778 13,758 14,503
Stockholders' equity per common share $9.83 $9.83 $9.88
Tangible stockholders' equity per common share 9.71 9.72 9.77
ASSET QUALITY
Allowance for loan losses $10,453 $10,074 $8,476
Nonperforming loans 3,685 2,688 3,778
Nonperforming assets 3,685 2,829 3,959
Allowance for loan losses as a percent of total
loans receivable 0.74% 0.71% 0.63%
Allowance for loan losses as a percent of
nonperforming loans 283.66 374.78 224.35
Nonperforming loans as a percent of
total loans receivable 0.26 0.19 0.28
Nonperforming assets as a percent of total assets 0.21 0.16 0.23
For the three months ended
March 31
------------------------------
2003 2002
---- ----
PERFORMANCE RATIOS (ANNUALIZED)
Return on average assets 1.21% 1.15%
Return on average stockholders' equity 15.61 13.93
Interest rate spread 3.48 3.45
Interest rate margin 3.73 3.75
Operating expenses to average assets 2.45 2.26
Efficiency ratio 55.68 54.60
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 three months ended
March 31
--------------------------------
2003 2002
---- ----
Net income $5,249 $ 5,049
Add: Employee stock plans amortization expense 861 909
Amortization of intangible assets 26 26
Less: Tax benefit (1) (126) (189)
------ -------
Cash earnings $6,010 $ 5,795
====== =======
Basic cash earnings per share $ .48 $ .44
====== =======
Diluted cash earnings per share $ .45 $ .42
====== =======
(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)
LOANS RECEIVABLE
At March 31, 2003 At December 31, 2002
----------------- --------------------
Real estate:
One- to four-family $1,086,785 $1,104,976
Commercial real estate, multi-
family and land 146,715 139,654
Construction 12,333 11,079
Consumer 81,664 80,218
Commercial 78,022 77,968
---------- ----------
Total loans 1,405,519 1,413,895
Loans in process (3,981) (3,531)
Deferred origination costs, net 2,827 2,239
Unearned discount (5) (5)
Allowance for loan losses (10,453) (10,074)
----------- ----------
Total loans, net 1,393,907 1,402,524
Less: mortgage loans held for sale 57,211 66,626
---------- ----------
Loans receivable, net $1,336,696 $1,335,898
========== ==========
Loans serviced for others $710,608 $ 680,165
Loan pipeline 333,304 307,662
For the three months ended
March 31
------------------------------------------
2003 2002
---- ----
Loan originations $276,862 $216,768
Loans sold 149,974 112,166
DEPOSITS
At March 31, 2003 At December 31, 2002
----------------- --------------------
Type of Account
Non-interest bearing $ 92,279 $ 86,290
NOW 247,529 260,762
Money market deposit 127,280 123,960
Savings 245,029 234,995
Time deposits 439,765 478,829
---------- ----------
$1,151,882 $1,184,836
========== ==========
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE QUARTERS ENDED MARCH 31,
------------------------------------------------------------------------------------
2003 2002
------------------------------------------ -----------------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
------------ -------------- -------------- --------------- ------------ ------------
(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits
and short term investments $ 13,876 $ 40 1.15% $ 2,618 $ 6 .92%
Investment securities 89,010 951 4.27 80,563 1,197 5.94
FHLB stock 19,110 255 5.34 23,721 257 4.33
Mortgage-backed securities 123,880 1,436 4.64 216,822 3,098 5.72
Loans receivable, net (1) 1,402,070 22,746 6.49 1,345,568 23,856 7.09
---------- ------- ---- ---------- ------- -----
Total interest-earning assets 1,647,946 25,428 6.17 1,669,292 28,414 6.81
---------- ------- ---- ---------- ------- -----
Non-interest earning assets 84,861 82,462
---------- ----------
Total assets $1,732,807 $1,751,754
========== ==========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 630,277 1,570 1.00 509,850 2,017 1.58
Time deposits 459,912 3,663 3.19 524,683 5,368 4.09
---------- ------- ---- ---------- ------- -----
Total 1,090,189 5,233 1.92 1,034,533 7,385 2.86
Borrowed funds 400,729 4,808 4.80 485,047 5,361 4.42
---------- ------- ---- ---------- ------- -----
Total interest-bearing liabilities 1,490,918 10,041 2.69 1,519,580 12,746 3.36
---------- ------- ---- ---------- ------- -----
Non-interest-bearing deposits 88,147 72,635
Non-interest bearing liabilities 19,208 14,566
---------- ----------
Total liabilities 1,598,273 1,606,781
Stockholders' equity 134,534 144,973
---------- ----------
Total liabilities and
stockholders' equity $1,732,807 $1,751,754
========== ==========
Net interest income $15,387 $15,668
======= =======
Net interest rate spread (2) 3.48% 3.45%
==== ====
Net interest margin (3) 3.73% 3.75%
==== ====
(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.