UPDATE 1-OceanFirst to buy Central Jersey Bancorp for $68.4 mln

* OceanFirst to buy Central Jersey in all-stock deal

* Deal valued at $7.12/shr

* Deal at 40 pct premium to Central Jersey's Tuesday close

May 27 (Reuters) - OceanFirst Financial Corp (OCFC.O), the New Jersey-based savings and loan, said it would buy smaller rival Central Jersey Bancorp (CJBK.O) in an all-stock deal valued at about $68.4 million to expand its operations.

Under the deal, Central Jersey stockholders will get 0.50 shares of OceanFirst common stock for each Central Jersey common stock.

Based on OceanFirst's closing price on Tuesday, the offer price would be $7.12 per share, representing a premium of about 40 percent to Central Jersey's Tuesday close.

OceanFirst, which expects to record a restructuring charge of about $3.9 million, said it sees the deal adding to its 2010 operating earnings per share.

OceanFirst said the combined entity would have about $2.5 billion in assets and about $1.7 billion in deposits.

John Garbarino, president and chief executive officer of OceanFirst, will continue in that capacity for the combined company, OceanFirst said.

The deal is expected to close by year end.

Central Jersey shares were up almost 23 percent at $6.27 before the bell. They closed at $5.10 Tuesday on Nasdaq, while OceanFirst shares had closed at $14.23. (Reporting by Santosh Nadgir in Bangalore; Editing by Himani Sarkar)