Parent-Only Financial Information

The following condensed statements of financial condition at December 31, 2018 and 2017 and condensed statements of operations and cash flows for the years ended December 31, 2018, 2017 and 2016 for OceanFirst Financial Corp. (parent company only) reflects the Company’s investment in its wholly-owned subsidiaries, the Bank and OceanFirst Risk Management, Inc., using the equity method of accounting.

Condensed Statement of Financial Condition

(in thousands)



	December 31,
	2018		2017
Assets:
Cash and due from banks	$	3,930	$	16
Advances to subsidiary Bank	14,026		33,749
Investment securities	1,000		1,000
ESOP loan receivable	10,431		3,051
Investment in subsidiaries	1,107,539		619,253
Other assets	234		1,956
Total assets	$	1,137,160	$	659,025
Liabilities and Stockholders’ Equity:
Borrowings	$	94,134	$	56,519
Other liabilities	3,668		565
Stockholders’ equity	1,039,358		601,941
Total liabilities and stockholders’ equity	$	1,137,160	$	659,025

Condensed Statements of Operations

(in thousands)



	For the Year Ended December 31,
	2018		2017		2016
Dividend income – subsidiary Bank	$	32,000	$	32,000	$	4,000
Interest and dividend income – investment securities	63		63		62
Interest income – advances to subsidiary Bank	525		280		118
Interest income – ESOP loan receivable	321		321		322
Other income	15		—		—
Total income	32,924		32,664		4,502
Interest expense – borrowings	4,997		2,592		1,049
Operating expenses	2,397		1,788		1,697
Income before income taxes and undistributed earnings of subsidiary Bank	25,530		28,284		1,756
Benefit for income taxes	846		973		780
Income before undistributed earnings of subsidiary Bank	26,376		29,257		2,536
Undistributed earnings of subsidiary Bank	45,556		13,213		20,510
Net Income	$	71,932	$	42,470	$	23,046

Condensed Statements of Cash Flows

(in thousands)



	For the Year Ended December 31,
	2018			2017			2016
Cash flows from operating activities:
Net income	$	71,932		$	42,470		$	23,046
Decrease (increase) in advances to subsidiary Bank	15,262			(23,371		)	3,838
Undistributed earnings of subsidiary Bank	(45,556		)	(13,213		)	(20,510		)
Amortization of deferred costs on borrowings	262			121			—
Net accretion of purchase accounting adjustments	395			—			—
Change in other assets and other liabilities	4,076			607			(1,619		)
Net cash provided by operating activities	46,371			6,614			4,755
Cash flows from investing activities:
Increase in ESOP loan receivable	(8,400		)	—			—
Repayments on ESOP loan receivable	1,020			234			218
Cash consideration for acquisition, net of cash received	—			—			(19,274		)
Net cash (used in) provided by investing activities	(7,380		)	234			(19,056		)
Cash flows from financing activities:
Net proceeds from issuance of subordinated notes	—			—			33,899
Dividends paid	(29,564		)	(19,286		)	(12,616		)
Purchase of treasury stock	(10,837		)	—			(1,878		)
Exercise of stock options	5,324			3,354			3,989
Net cash (used in) provided by financing activities	(35,077		)	(15,932		)	23,394
Net (decrease) increase in cash and due from banks	3,914			(9,084		)	9,093
Cash and due from banks at beginning of year	16			9,100			7
Cash and due from banks at end of year	$	3,930		$	16		$	9,100