OceanFirst Financial Corp. Announces Third Quarter Financial Results
RED BANK, N.J., Oct. 17, 2024 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:OCFC) (the "Company"), the holding company for OceanFirst Bank N.A. (the "Bank"), announced net income available to common stockholders of $24.1 million, or $0.42 per diluted share, for the three months ended September 30, 2024, an increase from $19.7 million, or $0.33 per diluted share, for the corresponding prior year period, and $23.4 million, or $0.40 per diluted share, for the prior linked quarter. For the nine months ended September 30, 2024, the Company reported net income available to common stockholders of $75.1 million, or $1.29 per diluted share, an increase from $73.3 million, or $1.24 per diluted share, for the corresponding prior year period. Selected performance metrics are as follows (refer to "Selected Quarterly Financial Data" for additional information):
For the Three Months Ended,
For the Nine Months Ended,
Performance Ratios (Annualized):
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Return on average assets
0.71
%
0.70
%
0.57
%
0.74
%
0.73
%
Return on average stockholders' equity
5.68
5.61
4.75
5.98
6.03
Return on average tangible stockholders' equity (a)
8.16
8.10
6.93
8.62
8.85
Return on average tangible common equity (a)
8.57
8.51
7.29
9.05
9.31
Efficiency ratio
65.77
62.86
63.37
62.71
62.15
Net interest margin
2.67
2.71
2.91
2.73
3.09
(a) Return on average tangible stockholders' equity and return on average tangible common equity ("ROTCE") are non-GAAP ("generally accepted accounting principles") financial measures and exclude the impact of intangible assets and goodwill from both assets and stockholders' equity. ROTCE also excludes preferred stock from stockholders' equity. Refer to "Explanation of Non-GAAP Financial Measures," "Selected Quarterly Financial Data" and "Non-GAAP Reconciliation" tables for additional information regarding non-GAAP financial measures.
Core earnings1 for the three and nine months ended September 30, 2024 were $23.2 million and $71.5 million, respectively, or $0.39 and $1.22 per diluted share, an increase from $18.6 million or $0.32 per diluted share and a decrease from $78.4 million or $1.33 per diluted share, for the corresponding prior year periods, and an increase from $22.7 million, or $0.39 per diluted share, for the prior linked quarter.
Core earnings PTPP1 for the three and nine months ended September 30, 2024 was $30.9 million and $99.8 million, respectively, or $0.53 and $1.71 per diluted share, as compared to $35.0 million and $118.7 million, or $0.59 and $2.01 per diluted share, for the corresponding prior year periods, and $32.7 million, or $0.56 per diluted share, for the prior linked quarter. Selected performance metrics are as follows:
For the Three Months Ended,
For the Nine Months Ended,
September 30,
June 30,
September 30,
September 30,
September 30,
Core Ratios1 (Annualized):
2024
2024
2023
2024
2023
Return on average assets
0.69
%
0.68
%
0.54
%
0.71
%
0.78
%
Return on average tangible stockholders' equity
7.85
7.86
6.54
8.20
9.46
Return on average tangible common equity
8.24
8.26
6.88
8.61
9.96
Efficiency ratio
66.00
63.47
64.29
63.49
60.79
Core diluted earnings per share
$
0.39
$
0.39
$
0.32
$
1.22
$
1.33
Core PTPP diluted earnings per share
0.53
0.56
0.59
1.71
2.01
Key developments for the recent quarter are described below:
Net Interest Income Stabilization: Net interest income of $82.2 million for the quarter as compared to $82.3 million in the prior linked quarter.
Deposits: Total deposits increased by $122.2 million to $10.1 billion from $10.0 billion and the loan-to-deposit ratio was 99% at September 30, 2024.
Strategic Investments: The results include $3.3 million of expenses, of which $1.7 million related to merger and acquisition costs, for the talent acquisition of Garden State Home Loans, Inc. and acquisition of Spring Garden Capital Group, LLC.2 These are expected to improve future operating performance by expanding fee revenue and specialty finance offerings.
Asset Quality: Asset quality metrics remain strong as non-performing loans and loans 30 to 89 days past due as a percentage of total loans receivable were 0.28% and 0.15%, respectively. Non-performing loans decreased by $5.3 million, to $28.1 million, and the Company recorded net loan recoveries of $88,000 for the quarter.
Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company's results, "We are pleased to present our current quarter results, which builds on the existing strength of our balance sheet, including robust capital and asset quality, coupled with stabilization of net interest income and margin. The quarter includes additional investments in mortgage banking activities, which will expand our digital channels and fee revenue and, in October, we completed an acquisition of a specialty finance company expanding our product offerings." Mr. Maher added, "Additionally, the Company hosted its third annual CommUNITYFirst Day. Thank you to our incredible employees and community partners for a successful event involving over 700 employees and nearly 3,000 hours across our communities."
The Company's Board of Directors declared its 111th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on November 15, 2024 to common stockholders of record on November 4, 2024. The Company's Board of Directors also declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing 1/40th interest in the Series A Preferred Stock. This dividend will be paid on November 15, 2024 to preferred stockholders of record on October 31, 2024.
1 Core earnings and core earnings before income taxes and provision for credit losses ("PTPP" or "Pre-Tax-Pre-Provision"), and ratios derived therefrom, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net branch consolidation expense, net (gain) loss on equity investments, net loss on sale of investments, net gain on sale of trust business, the Federal Deposit Insurance Corporation ("FDIC") special assessment, and the income tax effect of these items, (collectively referred to as "non-core" operations). PTPP excludes the aforementioned pre-tax "non-core" items along with income tax expense (benefit) and provision for credit losses. Refer to "Explanation of Non-GAAP Financial Measures," "Selected Quarterly Financial Data" and the "Non-GAAP Reconciliation" tables for additional information regarding non-GAAP financial measures.
2 The talent acquisition of Garden State Home Loans, Inc. was effective August 3, 2024. Additionally, the acquisition of Spring Garden Capital Group, LLC was effective October 1, 2024.
Results of OperationsThe current quarter was impacted by a continued mix-shift and repricing of funding costs. Further, the results were impacted by the following non-recurring events: $1.7 million of merger related expenses, a $1.4 million gain on sale of a portion of the Company's trust business, a $855,000 gain on sale of assets held for sale, and the resolution, via sale of collateral, of a single commercial real estate relationship of $7.2 million that was moved to non-accrual and partially charged-off in prior periods.
Net Interest Income and Margin
Three months ended September 30, 2024 vs. September 30, 2023
Net interest income decreased to $82.2 million, from $91.0 million, primarily reflecting the net impact of the higher interest rate environment.
Net interest margin decreased to 2.67%, from 2.91%, which included the impact of purchase accounting accretion of 0.02% and 0.06%, respectively. Net interest margin decreased primarily due to the increase in cost of funds outpacing the increase in yield on average interest-earning assets.
Average interest-earning assets decreased by $152.1 million due to balance sheet contraction while the average yield for interest-earning assets increased to 5.26%, from 5.08%.
The cost of average interest-bearing liabilities increased to 3.20%, from 2.71%, primarily due to higher cost of deposits. The total cost of deposits (including non-interest bearing deposits) increased to 2.44%, from 1.99%. Average interest-bearing liabilities decreased by $5.8 million, primarily due to a decrease in total deposits, largely offset by an increase in total borrowings.
Nine months ended September 30, 2024 vs. September 30, 2023
Net interest income decreased to $250.7 million, from $281.9 million, reflecting the net impact of the higher interest rate environment. Net interest margin decreased to 2.73%, from 3.09%, which included the impact of purchase accounting accretion and prepayment fees of 0.04% and 0.05% for the respective periods.
Average interest-earning assets increased by $45.8 million, primarily driven by an increase in securities growth of $153.9 million, which was funded through the decrease of $135.4 million of interest-earning deposits and short-term investments. The average yield increased to 5.25%, from 4.90%.
The total cost of average interest-bearing liabilities increased to 3.12%, from 2.29%. The total cost of deposits (including non-interest bearing deposits) increased to 2.37%, from 1.48%. Average interest-bearing liabilities increased by $258.0 million, primarily due to an increase in total deposits, partly offset by a decrease in total borrowings.
Three months ended September 30, 2024 vs. June 30, 2024
Net interest income decreased by $44,000, as the increase in cost of deposits slightly outpaced the decrease in Federal Home Loan Bank ("FHLB") advance costs and the yield of average interest earning assets. Net interest margin decreased to 2.67%, from 2.71%, which included the impact of purchase accounting accretion of 0.02% and 0.04% for the respective periods.
Average interest-earning assets increased by $28.9 million, primarily due to an increase in interest-earning deposits and short-term investments, partly offset by a decrease in loans. The yield on average interest-earning assets increased to 5.26%, from 5.25%.
The total cost of average interest-bearing liabilities increased to 3.20%, from 3.14%, primarily due to higher cost of deposits. Total cost of deposits (including non-interest bearing deposits) increased to 2.44%, from 2.37%. Average interest-bearing liabilities increased by $1.8 million, primarily due to an increase in FHLB advances, partly offset by a decrease in deposits and other borrowings.
Provision for Credit LossesProvision for credit losses for the three and nine months ended September 30, 2024 was $517,000 and $4.2 million, respectively, as compared to $10.3 million and $14.5 million for the corresponding prior year periods, and $3.1 million in the prior linked quarter. The lower provision for the current quarter was a result of flat loan growth, net loan recoveries, and the net effect of shifts in the Company's loan portfolio and external macro economic forecasts.
Net loan recoveries were $88,000 and net loan charge-offs were $1.7 million for the three and nine months ended September 30, 2024, respectively, as compared to net loan charge-offs of $8.3 million for both the three and nine months ended September 30, 2023. Net loan charge-offs were $1.5 million in the prior linked quarter. The prior year periods and prior linked quarter included partial charge-offs of $8.4 million and $1.6 million, respectively, for the single commercial real estate relationship disclosed previously. Refer to "Results of Operations" section for further discussion.
Non-interest Income
Three months ended September 30, 2024 vs. September 30, 2023
Other income increased to $14.7 million, as compared to $10.8 million. Other income was favorably impacted by non-core operations related to net gains on equity investments of $1.4 million and $1.5 million, for the respective quarters, and a $1.4 million gain on sale of a portion of the Company's trust business in the current quarter.
Excluding non-core operations, other income increased by $2.5 million, primarily driven by increases in fees and service charges of $918,000 related to treasury management fees, a non-recurring gain on sale of assets held for sale of $855,000, and net gain on sale of loans of $439,000.
Nine months ended September 30, 2024 vs. September 30, 2023
Other income increased to $38.0 million, as compared to $21.8 million. The current period was favorably impacted by non-core operations related to net gains on equity investments of $4.2 million and a $2.6 million gain on sale of a portion of the Company's trust business. The prior year was adversely impacted by non-core operations of $6.6 million, primarily related to losses on sale of investments.
Excluding non-core operations, other income increased by $2.8 million, primarily driven by increases in the cash surrender value of bank owned life insurance of $1.5 million, which included one-time death benefits in the current period, net gain on sale of loans of $1.2 million, and gain on sale of assets held for sale of $855,000. This was partially offset by a decrease in trust and asset management revenue of $590,000, related to the sale of a portion of the Company's trust business.
Three months ended September 30, 2024 vs. June 30, 2024
Other income in the prior linked quarter was $11.0 million and was favorably impacted by non-core operations of $887,000 related to net gains on equity investments. Excluding non-core operations, other income increased by $1.7 million, primarily due increases in fees and service charges of $1.1 million related to treasury management fees, and the gain on sale of assets held for sale of $855,000, as noted above.
Non-interest Expense
Three months ended September 30, 2024 vs. September 30, 2023
Operating expenses decreased to $63.7 million, as compared to $64.5 million. Operating expenses were adversely impacted by non-core operations related to merger related expenses of $1.7 million in the current quarter.
Excluding non-core operations, operating expenses decreased by $2.4 million. The primary driver was a decrease in professional fees of $3.3 million as the Company realized benefits from the performance improvement initiatives and investments made in the prior periods. This was partially offset by an increase in other operating expense of $1.1 million, which was partly due to additional loan servicing expenses.
Nine months ended September 30, 2024 vs. September 30, 2023
Operating expenses decreased to $181.0 million, as compared to $188.7 million. Operating expenses were adversely impacted by $2.1 million in the current year of non-core operations related to merger related expenses and a FDIC special assessment, and by $92,000 in the prior year for merger related and net branch consolidation expenses.
Excluding non-core operations, operating expenses decreased by $9.7 million. The primary drivers were decreases in professional fees of $8.6 million and compensation and employee benefits expenses of $1.9 million, which were due to the same initiatives discussed in the three-month periods above. This was partially offset by an increase in other operating expenses of $1.3 million, which was partly due to additional loan servicing expenses.
Three months ended September 30, 2024 vs. June 30, 2024
Excluding non-core operations, operating expenses increased by $3.4 million. The primary drivers were increases in compensation and benefits of $2.7 million, related to additional personnel in connection with the expansion of fee revenue noted above, and other operating expense of $854,000, which was partly due to additional loan servicing expenses.
Income Tax ExpenseThe provision for income taxes was $7.5 million and $25.2 million for the three and nine months ended September 30, 2024, respectively, as compared to $6.5 million and $24.1 million for the same prior year periods, and $7.1 million for the prior linked quarter. The effective tax rate was 22.9% and 24.4% for the three and nine months ended September 30, 2024, respectively, as compared to 23.9% and 24.0% for the same prior year periods, and 22.5% for the prior linked quarter. The Company's current quarter effective tax rate was positively impacted by geographic mix as compared to the same prior year period and the nine months ended September 30, 2024 was adversely impacted by the non-recurring write-off of a deferred tax asset of $1.2 million net of other state effects. The prior linked quarter's effective tax rate was positively impacted by the net effect of state law changes.
Financial Condition
September 30, 2024 vs. December 31, 2023
Total assets decreased by $49.8 million to $13.49 billion, from $13.54 billion, primarily due to decreases in loans, partly offset by net increase in total debt securities. Total loans decreased by $172.4 million to $10.02 billion, from $10.19 billion, primarily due to a decrease in the total commercial portfolio of $188.4 million driven by loan payoffs. The loan pipeline increased by $168.6 million to $351.6 million, from $183.0 million. Held-to-maturity debt securities decreased by $84.6 million to $1.08 billion, from $1.16 billion, primarily due to principal repayments. Debt securities available-for-sale increased $157.9 million to $911.8 million, from $753.9 million, primarily due to new purchases. Other assets decreased by $20.3 million to $159.3 million, from $179.7 million, primarily due to a decrease in market values associated with customer interest rate swap programs.
Total liabilities decreased by $82.3 million to $11.79 billion, from $11.88 billion primarily related to lower deposits and a funding mix shift. Deposits decreased by $318.8 million to $10.12 billion, from $10.43 billion, primarily due to decreases in high-yield savings accounts of $326.9 million and time deposits of $224.6 million, offset by increases in money market accounts of $266.8 million. Time deposits decreased to $2.22 billion, from $2.45 billion, representing 22.0% and 23.4% of total deposits, respectively, which was primarily related to planned runoff of brokered time deposits, which decreased by $430.4 million, offset by increases in retail time deposits of $221.4 million. The loan-to-deposit ratio was 99.1%, as compared to 97.7%. FHLB advances increased by $43.2 million to $891.9 million, from $848.6 million and other borrowings increased by $223.5 million to $419.9 million, from $196.5 million, as a result of lower cost funding availability.
Other liabilities decreased by $43.1 million to $257.6 million, from $300.7 million, primarily due to a decrease in the market values of derivatives associated with customer interest rate swaps and related collateral received from counterparties.
Capital levels remain strong and in excess of "well-capitalized" regulatory levels at September 30, 2024, including the Company's estimated common equity tier one capital ratio which increased to 11.3%, up approximately 40 basis points from December 31, 2023.
Total stockholders' equity increased to $1.69 billion, as compared to $1.66 billion, primarily reflecting net income, partially offset by capital returns comprising of dividends and share repurchases. For the nine months ended September 30, 2024, the Company repurchased 1,383,238 shares totaling $21.5 million representing a weighted average cost of $15.38. The Company had 1,551,200 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $8.7 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.
The Company completed its annual goodwill impairment test as of August 31, 2024. Based on a quantitative assessment, the Company concluded that goodwill was not impaired. However, the Company continues to monitor its goodwill as further and continued negative industry and economic trends and decline in the Company's stock price may result in a re-evaluation before the next required annual test.
The Company's tangible common equity3 increased by $35.0 million to $1.13 billion. The Company's stockholders' equity to assets ratio was 12.56% at September 30, 2024, and tangible common equity to tangible assets ratio increased by 30 basis points during the quarter to 8.68%, primarily due to the drivers described above.
Book value per common share increased to $29.02, as compared to $27.96. Tangible book value per common share3 increased to $19.28, as compared to $18.35.
3 Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures and exclude the impact of intangible assets, goodwill, and preferred equity from both stockholders' equity and total assets. Refer to "Explanation of Non-GAAP Financial Measures" and the "Non-GAAP Reconciliation" tables for additional information regarding non-GAAP financial measures.
Asset Quality
September 30, 2024 vs. December 31, 2023
Overall asset quality metrics remained stable. The Company's non-performing loans decreased to $28.1 million from $29.5 million and represented 0.28% and 0.29% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 245.45%, as compared to 227.21%. The level of 30 to 89 days delinquent loans decreased to $15.5 million, from $19.2 million. Criticized and classified assets increased to $189.1 million, from $146.9 million. The Company's allowance for loan credit losses was 0.69% of total loans, as compared to 0.66%. Refer to "Provision for Credit Losses" section for further discussion.
The Company's asset quality, excluding purchased with credit deterioration ("PCD") loans, was as follows. Non-performing loans decreased to $25.3 million, from $26.4 million. The allowance for loan credit losses as a percentage of total non-performing loans was 273.51%, as compared to 254.64%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, decreased to $14.2 million, from $17.7 million. The allowance for loan credit losses plus the unamortized credit and PCD marks amounted to $74.8 million, or 0.75% of total loans, as compared to $74.7 million, or 0.73% of total loans.
Explanation of Non-GAAP Financial MeasuresReported amounts are presented in accordance with GAAP. The Company's management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations and in some instances excluding income taxes and provision for credit losses, and reporting equity and asset amounts excluding intangible assets, goodwill or preferred stock, all of which can vary from period to period, provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.
Conference CallAs previously announced, the Company will host an earnings conference call on Friday, October 18, 2024 at 11:00 a.m. Eastern Time. The direct dial number for the call is (833) 470-1428, using the access code 257920. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (866) 813-9403, access code 120573, from one hour after the end of the call until November 15, 2024. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.
OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $13.5 billion regional bank providing financial services throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com.
Forward-Looking Statements In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, 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", "will", "should", "may", "view", "opportunity", "potential", or similar expressions or expressions of confidence. 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 its subsidiaries include, but are not limited to: changes in interest rates, inflation, general economic conditions, potential recessionary conditions, levels of unemployment in the Company's lending area, real estate market values in the Company's lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company's deposit portfolio, and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company's market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company's operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the effect of the Company's rating under the Community Reinvestment Act, the impact of pandemics on our operations and financial results and those of our customers and the Bank's ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and 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)
September 30,
June 30,
December 31,
September 30,
2024
2024
2023
2023
(Unaudited)
(Unaudited)
(Unaudited)
Assets
Cash and due from banks
$
214,171
$
181,198
$
153,718
$
408,882
Debt securities available-for-sale, at estimated fair value
911,753
721,484
753,892
453,208
Debt securities held-to-maturity, net of allowance for securities credit losses of $902 at September 30, 2024, $958 at June 30, 2024, $1,133 at December 31, 2023 and $932 at September 30, 2023 (estimated fair value of $1,007,781 at September 30, 2024, $1,003,850 at June 30, 2024, $1,068,438 at December 31, 2023 and $1,047,342 at September 30, 2023)
1,075,131
1,105,843
1,159,735
1,189,339
Equity investments
95,688
104,132
100,163
97,908
Restricted equity investments, at cost
98,545
92,679
93,766
82,484
Loans receivable, net of allowance for loan credit losses of $69,066 at September 30, 2024, $68,839 at June 30, 2024, $67,137 at December 31, 2023 and $63,877 at September 30, 2023
9,963,598
9,961,117
10,136,721
10,068,156
Loans held-for-sale
23,036
2,062
5,166
—
Interest and dividends receivable
48,821
50,976
51,874
50,030
Premises and equipment, net
116,087
117,392
121,372
122,646
Bank owned life insurance
269,138
267,867
266,498
265,071
Assets held for sale
—
28
28
3,004
Goodwill
506,146
506,146
506,146
506,146
Core deposit intangible
7,056
7,859
9,513
10,489
Other assets
159,313
202,972
179,661
240,820
Total assets
$
13,488,483
$
13,321,755
$
13,538,253
$
13,498,183
Liabilities and Stockholders' Equity
Deposits
$
10,116,167
$
9,994,017
$
10,434,949
$
10,533,929
Federal Home Loan Bank advances
891,860
789,337
848,636
606,056
Securities sold under agreements to repurchase with customers
81,163
80,000
73,148
82,981
Other borrowings
419,927
424,490
196,456
196,183
Advances by borrowers for taxes and insurance
27,282
25,168
22,407
29,696
Other liabilities
257,576
332,074
300,712
411,734
Total liabilities
11,793,975
11,645,086
11,876,308
11,860,579
Stockholders' equity:
OceanFirst Financial Corp. stockholders' equity
1,693,654
1,675,885
1,661,163
1,636,891
Non-controlling interest
854
784
782
713
Total stockholders' equity
1,694,508
1,676,669
1,661,945
1,637,604
Total liabilities and stockholders' equity
$
13,488,483
$
13,321,755
$
13,538,253
$
13,498,183
OceanFirst Financial Corp.CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts)
For the Three Months Ended,
For the Nine Months Ended,
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
|---------------------- (Unaudited) ----------------------|
|---------- (Unaudited) -----------|
Interest income:
Loans
$
136,635
$
136,049
$
133,931
$
409,805
$
384,755
Debt securities
19,449
19,039
15,223
58,349
43,829
Equity investments and other
5,441
4,338
9,256
14,399
18,956
Total interest income
161,525
159,426
158,410
482,553
447,540
Interest expense:
Deposits
62,318
60,071
53,287
182,244
112,551
Borrowed funds
16,988
17,092
14,127
49,603
53,082
Total interest expense
79,306
77,163
67,414
231,847
165,633
Net interest income
82,219
82,263
90,996
250,706
281,907
Provision for credit losses
517
3,114
10,283
4,222
14,525
Net interest income after provision for credit losses
81,702
79,149
80,713
246,484
267,382
Other income:
Bankcard services revenue
1,615
1,571
1,507
4,602
4,381
Trust and asset management revenue
384
419
662
1,329
1,919
Fees and service charges
6,096
5,015
5,178
15,584
15,939
Net gain on sales of loans
505
420
66
1,282
119
Net gain (loss) on equity investments
1,420
887
1,452
4,230
(5,908
)
Income from bank owned life insurance
1,779
1,726
1,390
5,367
3,853
Commercial loan swap income
414
241
11
793
712
Other
2,471
706
496
4,768
748
Total other income
14,684
10,985
10,762
37,955
21,763
Operating expenses:
Compensation and employee benefits
35,844
33,136
35,534
101,739
103,676
Occupancy
5,157
5,175
5,466
15,531
15,970
Equipment
1,026
1,068
1,172
3,224
3,478
Marketing
1,385
1,175
1,183
3,550
3,126
Federal deposit insurance and regulatory assessments
2,618
2,685
2,557
8,438
6,771
Data processing
5,940
6,018
6,086
17,914
18,405
Check card processing
1,153
1,075
1,154
3,278
3,649
Professional fees
1,970
2,161
5,258
6,863
15,439
Amortization of core deposit intangible
803
810
987
2,457
3,008
Branch consolidation expense, net
—
—
—
—
70
Merger related expenses
1,669
—
—
1,669
22
Other operating expense
6,171
5,317
5,087
16,365
15,109
Total operating expenses
63,736
58,620
64,484
181,028
188,723
Income before provision for income taxes
32,650
31,514
26,991
103,411
100,422
Provision for income taxes
7,464
7,082
6,459
25,183
24,109
Net income
25,186
24,432
20,532
78,228
76,313
Net income (loss) attributable to non-controlling interest
70
59
(135
)
72
(34
)
Net income attributable to OceanFirst Financial Corp.
25,116
24,373
20,667
78,156
76,347
Dividends on preferred shares
1,004
1,004
1,004
3,012
3,012
Net income available to common stockholders
$
24,112
$
23,369
$
19,663
$
75,144
$
73,335
Basic earnings per share
$
0.42
$
0.40
$
0.33
$
1.29
$
1.24
Diluted earnings per share
$
0.42
$
0.40
$
0.33
$
1.29
$
1.24
Average basic shares outstanding
58,065
58,356
59,104
58,405
59,037
Average diluted shares outstanding
58,068
58,357
59,111
58,407
59,068
OceanFirst Financial Corp.SELECTED LOAN AND DEPOSIT DATA(dollars in thousands)
LOANS RECEIVABLE
At
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
Commercial:
Commercial real estate - investor
$
5,273,159
$
5,324,994
$
5,322,755
$
5,353,974
$
5,334,279
Commercial real estate - owner-occupied
841,930
857,710
914,582
943,891
957,216
Commercial and industrial
660,879
616,400
677,176
666,532
652,119
Total commercial
6,775,968
6,799,104
6,914,513
6,964,397
6,943,614
Consumer:
Residential real estate
3,003,213
2,977,698
2,965,276
2,979,534
2,928,259
Home equity loans and lines and other consumer ("other consumer")
242,975
242,526
245,859
250,664
251,698
Total consumer
3,246,188
3,220,224
3,211,135
3,230,198
3,179,957
Total loans
10,022,156
10,019,328
10,125,648
10,194,595
10,123,571
Deferred origination costs (fees), net
10,508
10,628
9,734
9,263
8,462
Allowance for loan credit losses
(69,066
)
(68,839
)
(67,173
)
(67,137
)
(63,877
)
Loans receivable, net
$
9,963,598
$
9,961,117
$
10,068,209
$
10,136,721
$
10,068,156
Mortgage loans serviced for others
$
142,394
$
104,136
$
89,555
$
68,217
$
52,796
At September 30, 2024 Average Yield
Loan pipeline (1):
Commercial
8.28
%
$
199,818
$
166,206
$
66,167
$
124,707
$
50,756
Residential real estate
6.09
137,978
