TOMS RIVER, N.J., July 27, 2017 (GLOBE NEWSWIRE) — OceanFirst Financial Corp. (NASDAQ:OCFC), (the “Company”), the holding company for OceanFirst Bank (the “Bank”), today announced that diluted earnings per share were $0.23 for the three months ended June 30, 2017, as compared to $0.16 for the corresponding prior year period. For the six months ended June 30, 2017, diluted earnings per share were $0.59, as compared to $0.39 for the prior corresponding year period.
The results of operations for the three and six months ended June 30, 2017 include merger related expenses and branch consolidation expenses and for the six months ended June 30, 2017 also include the acceleration of stock award expense from a director retirement. These items decreased net income, net of tax benefit, for the three and six months ended June 30, 2017, by $5.6 million and $6.7 million, respectively. Excluding these items, core earnings for the three and six months ended June 30, 2017 were $13.3 million, or $0.40 per diluted share, and $26.4 million, or $0.80 per diluted share, respectively. (Please refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of merger related expenses, branch consolidation expenses, certain other incurred expenses and quantification of core earnings).
Highlights for the quarter are described below:
- Total loans grew $47.5 million, including $26.6 million in consumer loan growth and $20.9 million in commercial loan growth, while asset quality improved as non-performing loans decreased $5.4 million, or 25.0%, to $16.3 million, and non-performing loans as a percentage of total loans decreased to 0.42%, as compared to 0.56% in the prior linked quarter.
- The Company maintained a loan to deposit ratio of 92.6% while cost of deposits increased one basis point from the prior linked quarter to 0.28%.
- The Company successfully completed the consolidation of 15 branches throughout central and southern New Jersey, with total expected annualized cost savings of $6.1 million.
Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “We are pleased with the accelerated loan growth achieved this quarter and to have completed the full integration of Ocean City Home Bank which will result in material expense reductions in the coming quarters. The systems integration of Ocean City Home Bank in May and the additional branch rationalization completed in July resulted in the consolidation of 15 branches.” Mr. Maher added, “On June 30, 2017, we announced our plans to acquire Sun Bancorp, Inc. (“Sun”). The Sun transaction provides a wonderful opportunity to enhance the OceanFirst franchise and continue our strategic growth plans. It is subject to regulatory and stockholder approvals which are not expected until the first quarter of 2018. As part of the transaction we are considering making application to convert to a bank holding company which would operate OceanFirst as a national bank.”
The Company also announced that the Company’s Board of Directors declared its eighty-second consecutive quarterly cash dividend on common stock. The dividend for the quarter ended June 30, 2017 of $0.15 per share will be paid on August 18, 2017 to stockholders of record on August 7, 2017.
The Company continues to focus on actively managing expense levels. Expense reductions associated with the successful systems integration of Ocean Shore Holding Company (“Ocean Shore”) in the second quarter of 2017 will be fully realized in the third quarter of 2017. The Company also expects to realize significant cost savings from branch consolidations, which is expected to provide a total of $6.1 million in annual cost savings. The Company intends to deploy a portion of the savings by further investing in commercial banking and electronic delivery channels while meeting the efficiency targets established in connection with the recent acquisitions. The Company expects to recognize additional branch consolidation expense of $2.1 million in the third quarter of 2017 relating to branch closures in early July.
Results of Operations
On May 2, 2016, the Company completed its acquisition of Cape and its results of operations are included in the consolidated results for the three and six months ended June 30, 2017, but are excluded from the results of operations for the period from January 1, 2016 to May 1, 2016.
On November 30, 2016, the Company completed its acquisition of Ocean Shore and its results of operations are included in the consolidated results for the three and six months ended June 30, 2017, but are excluded from the results of operations for the three and six months ended June 30, 2016.
Net income for the quarter ended June 30, 2017, was $7.7 million, or $0.23 per diluted share, as compared to $3.7 million, or $0.16 per diluted share, for the corresponding prior year period. Net income for the six months ended June 30, 2017 was $19.7 million, or $0.59 per diluted share, as compared to net income of $7.9 million, or $0.39 per diluted share, for the corresponding prior year period. Net income for the three and six months ended June 30, 2017, includes merger related and branch consolidation expenses and for the six months ended June 30, 2017, also includes the acceleration of stock award expense from a director retirement. These items decreased net income, net of tax benefit, for the three and six months ended June 30, 2017, by $5.6 million and $6.7 million, respectively. Net income for the three and six months ended June 30, 2016 includes merger related expenses of $7.2 million and $8.6 million, respectively, a Federal Home Loan Bank prepayment fee of $136,000 and a loss on the sale of investment securities available-for-sale of $12,000. Excluding these items, net income for the three and six months ended June 30, 2017 increased over the prior year periods primarily due to the acquisitions of Cape and Ocean Shore (“Acquisition Transactions”). In addition, in the first quarter of 2017 the Company adopted Accounting Standards Update (“ASU”) 2016-09 “Compensation – Stock Compensation” which resulted in decreases in income tax expense for the three and six months ended June 30, 2017, of $172,000 and $1.5 million, respectively.
Net interest income for the three and six months ended June 30, 2017 increased to $42.2 million and $83.7 million, respectively, as compared to $30.0 million and $50.6 million, respectively, for the same prior year periods, reflecting an increase in interest-earning assets. Average interest-earning assets increased $1.357 billion and $1.805 billion, respectively, for the three and six months ended June 30, 2017, as compared to the same prior year periods. The averages for the three and six months ended June 30, 2017, were favorably impacted by the interest-earning assets acquired in the Acquisition Transactions. The net interest margin remained stable at 3.57% for both the three months ended June 30, 2017 and 2016, and increased to 3.56% for the six months ended June 30, 2017, from 3.47% for the same prior year period. The yields on average interest-earning assets increased to 3.97% and 3.96%, respectively, for the three and six months ended June 30, 2017, from 3.94% and 3.86%, respectively, for the same prior year periods. The yields on average interest-earning assets for the three and six months ended June 30, 2017 benefited from an increase in the accretion of purchase accounting adjustments of $632,000 and $2.6 million, respectively, and the generally higher interest rate environment. For both the three and six months ended June 30, 2017, the cost of average interest-bearing liabilities increased to 0.49%, from 0.47% and 0.48%, respectively, in the corresponding prior year periods. The total cost of deposits (including non-interest bearing deposits) was 0.28% and 0.27%, respectively, for the three and six months ended June 30, 2017, as compared to 0.25% for both the three and six months ending June 30, 2016.
Net interest income for the three months ended June 30, 2017 increased $691,000, as compared to the prior linked quarter, as average interest-earning assets increased $12.9 million and the yield on average interest-earning assets increased to 3.97% for the three months ended June 30, 2017, from 3.95% for the prior linked quarter. The net interest margin increased to 3.57% for the three months ended June 30, 2017, from 3.56% for the prior linked quarter. The cost of average interest-bearing liabilities increased to 0.49% for the three months ended June 30, 2017 from 0.48% for the prior linked quarter.
For the three and six months ended June 30, 2017, the provision for loan losses was $1.2 million and $1.9 million, respectively, as compared to $662,000 and $1.2 million, respectively, for the corresponding prior year periods and $700,000 in the prior linked quarter. Net loan charge-offs were $759,000 and $491,000, respectively, for the three and six months ended June 30, 2017, as compared to net loan charge-offs of $198,000 and $1.3 million, respectively, in the corresponding prior year periods, and a $268,000 net loan recovery in the prior linked quarter. Non-performing loans totaled $16.3 million at June 30, 2017, as compared to $21.7 million at March 31, 2017, and $15.3 million at June 30, 2016. The decrease in non-performing loans from the prior quarter was primarily due to the sale of non-performing residential loans totaling $3.9 million and the payoff of two non-performing commercial loans totaling $1.7 million.
For the three and six months ended June 30, 2017, other income increased to $7.0 million and $13.0 million, respectively, as compared to $4.9 million and $8.3 million, respectively, in the same prior year periods. The increases were primarily due to the impact of the Acquisition Transactions, which added $1.7 million and $3.8 million, respectively, to other income for the three and six months ended June 30, 2017, as compared to the same prior year periods. Excluding the Acquisition Transactions, the remaining increase in other income was primarily related to higher deposit related fees of $389,000 and $902,000, respectively, for the three and six months ended June 30, 2017, as compared to the same prior year periods.
For the three months ended June 30, 2017, other income increased $978,000, as compared to the prior linked quarter. The increase in other income over the prior linked quarter was primarily due to the net gain from OREO operations for the quarter ended June 30, 2017 of $105,000, as compared to a net loss from OREO operations in the prior linked quarter of $733,000.
Operating expenses increased to $37.1 million and $68.1 million, respectively, for the three and six months ended June 30, 2017, as compared to $28.6 million and $45.4 million, respectively, in the same prior year periods. Operating expenses for the three and six months ended June 30, 2017 included $8.6 million and $10.1 million, respectively, of merger related and branch consolidation expenses, as compared to $7.2 million and $8.6 million, respectively, in the prior year periods. Excluding the impact of merger and branch consolidation expenses, the increase in operating expenses over the prior year was primarily due to the operations of the Cape and Ocean Shore, which added $5.9 million and $17.3 million for the three and six months ended June 30, 2017, respectively. For the three months ended June 30, 2017, excluding the Acquisition Transaction expenses, there were increases in salary compensation, equipment expense and professional fees. For the six months ended June 30, 2017, excluding the Acquisition Transaction expenses, there were increases in salary compensation, stock plan expense, equipment expense and professional fees.
For the three months ended June 30, 2017, operating expenses, excluding merger and branch consolidation expenses, decreased $1.0 million, as compared to the prior linked quarter, primarily due to reduced compensation and employee benefits expense.
The provision for income taxes was $3.2 million and $7.0 million, respectively, for the three and six months ended June 30, 2017, as compared to $1.9 million and $4.4 million, respectively, for the same prior year periods. The effective tax rate was 29.2% and 26.1%, respectively, for the three and six months ended June 30, 2017, as compared to 34.5% and 35.8%, respectively, for the same prior year periods. The lower effective tax rate for the three and six months ended June 30, 2017 resulted from the adoption of ASU 2016-09 “Compensation – Stock Compensation,” which decreased income tax expense by $172,000 and $1.5 million, respectively. Excluding the impact of ASU 2016-09, the effective tax rate would have been 30.8% and 31.9% for the three and six months ended June 30, 2017, respectively. Under the ASU, the tax benefits of exercised stock options and vested stock awards are recognized as a benefit to income tax expense in the reporting period in which they occur. The tax benefit relating to the Company’s stock plans was $62,000 for the year ended December 31, 2016, which was recorded directly into stockholders equity. The elevated tax benefit for the three and six months ended June 30, 2017 was related to the exercise of options assumed in the acquisitions of Cape and Ocean Shore and the increase in the Company’s stock price.
Financial Condition
Total assets increased by $35.1 million to $5.202 billion at June 30, 2017, from $5.167 billion at December 31, 2016. Cash and due from banks decreased by $193.7 million, to $107.7 million at June 30, 2017, from $301.4 million at December 31, 2016, as these funds were deployed into higher-yielding securities which increased $171.8 million. Loans receivable, net, increased by $65.4 million, to $3.869 billion at June 30, 2017 from $3.803 billion at December 31, 2016. Premises and equipment decreased $11.9 million at June 30, 2017, as compared to December 31, 2016, due to the consolidation of 15 branches, of which 5 were closed in early July. The premises and equipment at these locations were written down to their net realizable value and the remaining balance of $5.8 million was reclassified to assets held for sale.
Deposits decreased by $10.8 million, to $4.177 billion at June 30, 2017, from $4.188 billion at December 31, 2016. The loan-to-deposit ratio at June 30, 2017 was 92.6%, as compared to 90.8% at December 31, 2016.
Stockholders’ equity increased to $587.3 million at June 30, 2017, as compared to $572.0 million at December 31, 2016. At June 30, 2017, there were 1.8 million shares available for repurchase under the Company’s stock repurchase programs. In the six months ended June 30, 2017, the Company did not repurchase any shares under these repurchase programs. Tangible stockholders’ equity per common share increased to $13.19 at June 30, 2017, as compared to $12.95 at December 31, 2016.
Asset Quality
The Company’s non-performing loans increased to $16.3 million at June 30, 2017, as compared to $13.6 million at December 31, 2016. The increase was primarily due to a single commercial real estate relationship with a balance of $4.2 million, which was partly offset by the payoff of two non-performing loans totaling $1.7 million. An increase in non-performing residential mortgage loans in the first quarter of 2017 was largely offset by the bulk sale of non-performing residential loans in the second quarter of 2017. Non-performing loans do not include $5.0 million of purchased credit-impaired (“PCI”) loans acquired in the Acquisition Transactions. The Company’s OREO totaled $8.9 million at June 30, 2017, as compared to $9.8 million at December 31, 2016. At June 30, 2017, the Company’s allowance for loan losses was 0.42% of total loans, an increase from 0.40% at December 31, 2016. These ratios exclude existing fair value credit marks of $21.8 million at June 30, 2017 on the Ocean Shore, Cape and Colonial American Bank loans. These loans were acquired at fair value with no related allowance for loan losses. The allowance for loan losses as a percent of total non-performing loans was 101.82% at June 30, 2017 as compared to 111.92% at December 31, 2016.
Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding merger related expenses, branch consolidation expenses, accelerated stock award expense relating to a director retirement, loss on sale of investment securities available for sale and FHLB prepayment fee, 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. Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.
Conference Call
As previously announced, the Company will host an earnings conference call on Friday, July 28, 2017 at 11 a.m. Eastern time. The direct dial number for the call is (888) 338-7143. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10109403 from one hour after the end of the call until October 28, 2017. 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, founded in 1902, is a $5.2 billion community bank with branches located throughout central and southern New Jersey. OceanFirst Bank delivers commercial and residential financing solutions, wealth management and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey.
OceanFirst Financial Corp.’s press releases are available by visiting us at 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, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters and increases to flood insurance premiums, 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, competition, demand for financial services in the Company’s market area, accounting principles and guidelines 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, 2016 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, except per share amounts) |
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| June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
June 30, 2016 |
|||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks | $ | 107,660 | $ | 175,252 | $ | 301,373 | $ | 66,222 | ||||||||
| Securities available-for-sale, at estimated fair value | 62,154 | 47,104 | 12,224 | 12,509 | ||||||||||||
| Securities held-to-maturity, net (estimated fair value of $724,250 at June 30, 2017, $695,564 at March 31, 2017, $598,119 at December 31, 2016, and $520,971 at June 30, 2016) |
720,511 | 695,918 | 598,691 | 513,721 | ||||||||||||
| Federal Home Loan Bank of New York stock, at cost | 20,358 | 19,253 | 19,313 | 21,128 | ||||||||||||
| Loans receivable, net | 3,868,805 | 3,825,600 | 3,803,443 | 3,130,046 | ||||||||||||
| Loans held-for-sale | 168 | 283 | 1,551 | 5,310 | ||||||||||||
| Interest and dividends receivable | 13,036 | 12,258 | 11,989 | 10,143 | ||||||||||||
| Other real estate owned | 8,898 | 8,774 | 9,803 | 9,791 | ||||||||||||
| Premises and equipment, net | 59,509 | 70,806 | 71,385 | 49,392 | ||||||||||||
| Servicing asset | 181 | 203 | 228 | 664 | ||||||||||||
| Bank Owned Life Insurance | 133,572 | 132,789 | 132,172 | 105,929 | ||||||||||||
| Deferred tax asset | 29,804 | 33,652 | 38,787 | 37,052 | ||||||||||||
| Assets held for sale | 6,114 | 360 | 360 | 669 | ||||||||||||
| Other assets | 13,110 | 15,873 | 9,745 | 13,912 | ||||||||||||
| Core deposit intangible | 9,887 | 10,400 | 10,924 | 3,903 | ||||||||||||
| Goodwill | 148,433 | 147,815 | 145,064 | 67,102 | ||||||||||||
| Total assets | $ | 5,202,200 | $ | 5,196,340 | $ | 5,167,052 | $ | 4,047,493 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||
| Deposits | $ | 4,176,909 | $ | 4,198,663 | $ | 4,187,750 | $ | 3,206,262 | ||||||||
| Securities sold under agreements to repurchase with retail customers | 75,050 | 77,207 | 69,935 | 67,673 | ||||||||||||
| Federal Home Loan Bank advances | 277,541 | 250,021 | 250,498 | 312,603 | ||||||||||||
| Other borrowings | 56,623 | 56,591 | 56,559 | 22,500 | ||||||||||||
| Advances by borrowers for taxes and insurance | 15,036 | 14,876 | 14,030 | 9,828 | ||||||||||||
| Other liabilities | 13,738 | 16,302 | 16,242 | 19,369 | ||||||||||||
| Total liabilities | 4,614,897 | 4,613,660 | 4,595,014 | 3,638,235 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||||
| Preferred stock, $.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, no shares issued |
— | — | — | — | ||||||||||||
| Common stock, $.01 par value, 55,000,000 shares authorized, 33,566,772 shares issued and 32,528,658, 32,465,413, 32,136,892, and 25,748,898 shares outstanding at June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016, respectively |
336 | 336 | 336 | 336 | ||||||||||||
| Additional paid-in capital | 353,296 | 352,316 | 364,433 | 308,460 | ||||||||||||
| Retained earnings | 258,470 | 256,045 | 238,192 | 230,895 | ||||||||||||
| Accumulated other comprehensive loss | (5,198 | ) | (5,382 | ) | (5,614 | ) | (5,798 | ) | ||||||||
| Less: Unallocated common stock held by Employee Stock Ownership Plan | (2,620 | ) | (2,690 | ) | (2,761 | ) | (2,903 | ) | ||||||||
| Treasury stock, 1,038,114, 1,101,359, 1,429,880, and 7,817,874 shares at June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016, respectively |
(16,981 | ) | (17,945 | ) | (22,548 | ) | (121,732 | ) | ||||||||
| Common stock acquired by Deferred Compensation Plan | (176 | ) | (316 | ) | (313 | ) | (308 | ) | ||||||||
| Deferred Compensation Plan Liability | 176 | 316 | 313 | 308 | ||||||||||||
| Total stockholders’ equity | 587,303 | 582,680 | 572,038 | 409,258 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,202,200 | $ | 5,196,340 | $ | 5,167,052 | $ | 4,047,493 | ||||||||
| OceanFirst Financial Corp. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) |
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| For the Three Months Ended, | For the Six Months Ended | |||||||||||||||||||
| June 30, 2017 |
March 31, 2017 |
June 30, 2016 |
June 30, 2017 |
June 30, 2016 |
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| |——————– (unaudited) ——————–| | |————- (unaudited) ————-| | |||||||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 42,608 | $ | 41,742 | $ | 30,521 | $ | 84,350 | $ | 51,556 | ||||||||||
| Mortgage-backed securities | 2,791 | 2,660 | 1,708 | 5,451 | 3,123 | |||||||||||||||
| Investment securities and other | 1,480 | 1,612 | 912 | 3,092 | 1,535 | |||||||||||||||
| Total interest income | 46,879 | 46,014 | 33,141 | 92,893 | 56,214 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 2,914 | 2,781 | 1,771 | 5,695 | 3,042 | |||||||||||||||
| Borrowed funds | 1,791 | 1,750 | 1,356 | 3,541 | 2,599 | |||||||||||||||
| Total interest expense | 4,705 | 4,531 | 3,127 | 9,236 | 5,641 | |||||||||||||||
| Net interest income | 42,174 | 41,483 | 30,014 | 83,657 | 50,573 | |||||||||||||||
| Provision for loan losses | 1,165 | 700 | 662 | 1,865 | 1,225 | |||||||||||||||
| Net interest income after provision for loan losses | 41,009 | 40,783 | 29,352 | 81,792 | 49,348 | |||||||||||||||
| Other income: | ||||||||||||||||||||
| Bankcard services revenue | 1,837 | 1,579 | 1,211 | 3,416 | 2,062 | |||||||||||||||
| Wealth management revenue | 565 | 516 | 621 | 1,081 | 1,171 | |||||||||||||||
| Fees and service charges | 3,658 | 3,807 | 2,597 | 7,465 | 4,470 | |||||||||||||||
| Net loss on sale of investment securities available-for-sale | — | — | (12 | ) | — | (12 | ) | |||||||||||||
| Net gain on sales of loans available-for-sale | 15 | 42 | 170 | 57 | 349 | |||||||||||||||
| Net gain (loss) from other real estate operations | 105 | (733 | ) | (313 | ) | (628 | ) | (719 | ) | |||||||||||
| Income from Bank Owned Life Insurance | 783 | 772 | 542 | 1,555 | 861 | |||||||||||||||
| Other | 10 | 12 | 67 | 23 | 77 | |||||||||||||||
| Total other income | 6,973 | 5,995 | 4,883 | 12,969 | 8,259 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Compensation and employee benefits | 15,328 | 16,138 | 11,432 | 31,466 | 19,898 | |||||||||||||||
| Occupancy | 2,641 | 2,767 | 2,011 | 5,409 | 3,637 | |||||||||||||||
| Equipment | 1,703 | 1,698 | 1,184 | 3,400 | 2,153 | |||||||||||||||
| Marketing | 730 | 740 | 543 | 1,470 | 794 | |||||||||||||||
| Federal deposit insurance | 705 | 661 | 723 | 1,366 | 1,252 | |||||||||||||||
| Data processing | 2,046 | 2,396 | 1,881 | 4,442 | 3,146 | |||||||||||||||
| Check card processing | 815 | 953 | 505 | 1,768 | 925 | |||||||||||||||
| Professional fees | 1,095 | 960 | 700 | 2,055 | 1,198 | |||||||||||||||
| Other operating expense | 2,951 | 2,644 | 2,217 | 5,595 | 3,493 | |||||||||||||||
| Federal Home Loan Bank prepayment fee | — | — | 136 | — | 136 | |||||||||||||||
| Amortization of core deposit intangible | 513 | 524 | 125 | 1,037 | 138 | |||||||||||||||
| Branch consolidation expenses | 5,451 | 33 | — | 5,484 | — | |||||||||||||||
| Merger related expenses | 3,155 | 1,447 | 7,189 | 4,602 | 8,591 | |||||||||||||||
| Total operating expenses | 37,133 | 30,961 | 28,646 | 68,094 | 45,361 | |||||||||||||||
| Income before provision for income taxes | 10,849 | 15,817 | 5,589 | 26,667 | 12,246 | |||||||||||||||
| Provision for income taxes | 3,170 | 3,799 | 1,928 | 6,969 | 4,380 | |||||||||||||||
| Net income | $ | 7,679 | $ | 12,018 | $ | 3,661 | $ | 19,698 | $ | 7,866 | ||||||||||
| Basic earnings per share | $ | 0.24 | $ | 0.38 | $ | 0.16 | $ | 0.62 | $ | 0.40 | ||||||||||
| Diluted earnings per share | $ | 0.23 | $ | 0.36 | $ | 0.16 | $ | 0.59 | $ | 0.39 | ||||||||||
| Average basic shares outstanding | 32,122 | 31,901 | 22,478 | 32,014 | 19,694 | |||||||||||||||
| Average diluted shares outstanding | 33,138 | 33,090 | 22,880 | 33,111 | 19,996 | |||||||||||||||
| OceanFirst Financial Corp. SELECTED LOAN AND DEPOSIT DATA (dollars in thousands) |
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| LOANS RECEIVABLE | At | |||||||||||||||||||||
| June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
June 30, 2016 |
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| Commercial: | ||||||||||||||||||||||
| Commercial and industrial | $ | 193,759 | $ | 205,720 | $ | 152,810 | $ | 185,633 | $ | 222,355 | ||||||||||||
| Commercial real estate – owner- occupied |
557,734 | 533,052 | 534,365 | 493,157 | 523,662 | |||||||||||||||||
| Commercial real estate – investor | 1,122,186 | 1,113,964 | 1,134,507 | 1,014,699 | 1,011,354 | |||||||||||||||||
| Total commercial | 1,873,679 | 1,852,736 | 1,821,682 | 1,693,489 | 1,757,371 | |||||||||||||||||
| Consumer: | ||||||||||||||||||||||
| Residential mortgage | 1,667,831 | 1,639,611 | 1,651,695 | 1,061,752 | 1,090,781 | |||||||||||||||||
| Residential construction | 78,339 | 76,985 | 65,408 | 46,813 | 48,266 | |||||||||||||||||
| Home equity loans and lines | 282,402 | 285,149 | 289,110 | 251,421 | 258,398 | |||||||||||||||||
| Other consumer | 1,335 | 1,560 | 1,566 | 1,273 | 1,586 | |||||||||||||||||
| Total consumer | 2,029,907 | 2,003,305 | 2,007,779 | 1,361,259 | 1,399,031 | |||||||||||||||||
| Total loans | 3,903,586 | 3,856,041 | 3,829,461 | 3,054,748 | 3,156,402 | |||||||||||||||||
| Loans in process | (22,589 | ) | (17,976 | ) | (14,249 | ) | (13,842 | ) | (13,119 | ) | ||||||||||||
| Deferred origination costs, net | 4,365 | 3,686 | 3,414 | 3,407 | 3,441 | |||||||||||||||||
| Allowance for loan losses | (16,557 | ) | (16,151 | ) | (15,183 | ) | (15,617 | ) | (16,678 | ) | ||||||||||||
| Loans receivable, net | $ | 3,868,805 | $ | 3,825,600 | $ | 3,803,443 | $ | 3,028,696 | $ | 3,130,046 | ||||||||||||
| Mortgage loans serviced for others | $ | 131,284 | $ | 132,973 | $ | 137,881 | $ | 143,657 | $ | 145,903 | ||||||||||||
| At June 30, 2017 Average Yield |
||||||||||||||||||||||
| Loan pipeline (1): | ||||||||||||||||||||||
| Commercial | 4.20 | % | $ | 61,287 | $ | 73,793 | $ | 99,060 | $ | 64,976 | $ | 48,897 | ||||||||||
| Residential mortgage and construction | 3.74 | 64,510 | 57,600 | 38,486 | 39,252 | 30,520 | ||||||||||||||||
| Home equity loans and lines | 4.40 | 11,194 | 7,879 | 6,522 | 5,099 | 5,594 | ||||||||||||||||
| Total | 4.00 | $ | 136,991 | $ | 139,272 | $ | 144,068 | $ | 109,327 | $ | 85,011 | |||||||||||
| For the three months ended | |||||||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||||||||
| Average Yield | |||||||||||||||||||||||||
| Loan originations: | |||||||||||||||||||||||||
| Commercial | 4.52 | % | $ | 115,048 | (2 | ) | $ | 106,896 | $ | 105,062 | $ | 63,310 | $ | 59,543 | |||||||||||
| Residential mortgage and construction | 3.97 | 79,610 | 64,452 | 62,087 | 41,170 | 40,295 | |||||||||||||||||||
| Home equity loans and lines | 4.38 | 20,539 | 12,500 | 11,790 | 11,007 | 10,067 | |||||||||||||||||||
| Total | 4.30 | $ | 215,197 | $ | 183,848 | $ | 178,939 | $ | 115,487 | $ | 109,905 | ||||||||||||||
| Loans sold | $ | 865 | (3 | ) | $ | 1,907 | $ | 12,098 | (4 | ) | $ | 17,787 | (5 | ) | $ | 10,303 | |||||||||
| (1) Loan pipeline includes pending loan applications and loans approved but not funded | |||||||||||||||||||||||||
| (2) Includes purchased loans totaling $16.6 million | |||||||||||||||||||||||||
| (3) Excludes the sale of under-performing residential loans of $4.3 million | |||||||||||||||||||||||||
| (4) Excludes the sale of under-performing loans of $21.0 million | |||||||||||||||||||||||||
| (5) Excludes the sale of under-performing loans of $12.8 million | |||||||||||||||||||||||||
| DEPOSITS | At | ||||||||||||||||||
| June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
June 30, 2016 |
|||||||||||||||
| Type of Account | |||||||||||||||||||
| Non-interest-bearing | $ | 770,057 | $ | 806,728 | $ | 782,504 | $ | 512,957 | $ | 554,709 | |||||||||
| Interest-bearing checking | 1,727,828 | 1,629,589 | 1,626,713 | 1,451,083 | 1,310,290 | ||||||||||||||
| Money market deposit | 378,538 | 448,093 | 458,911 | 400,054 | 366,942 | ||||||||||||||
| Savings | 677,939 | 681,853 | 672,519 | 489,173 | 489,132 | ||||||||||||||
| Time deposits | 622,547 | 632,400 | 647,103 | 471,414 | 485,189 | ||||||||||||||
| $ | 4,176,909 | $ | 4,198,663 | $ | 4,187,750 | $ | 3,324,681 | $ | 3,206,262 | ||||||||||
| OceanFirst Financial Corp. ASSET QUALITY (dollars in thousands) |
|||||||||||||||||||
| June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
June 30, 2016 |
|||||||||||||||
| ASSET QUALITY | |||||||||||||||||||
| Non-performing loans: | |||||||||||||||||||
| Commercial and industrial | $ | 68 | $ | 231 | $ | 441 | $ | 1,152 | $ | 964 | |||||||||
| Commercial real estate – owner-occupied | 943 | 2,383 | 2,414 | 5,213 | 4,363 | ||||||||||||||
| Commercial real estate – investor | 5,608 | 5,118 | 521 | 1,675 | 1,675 | ||||||||||||||
| Residential mortgage | 7,936 | 11,993 | 8,126 | 7,017 | 7,102 | ||||||||||||||
| Home equity loans and lines | 1,706 | 1,954 | 2,064 | 1,450 | 1,226 | ||||||||||||||
| Total non-performing loans | 16,261 | 21,679 | 13,566 | 16,507 | 15,330 | ||||||||||||||
| Other real estate owned | 8,898 | 8,774 | 9,803 | 9,107 | 9,791 | ||||||||||||||
| Total non-performing assets | $ | 25,159 | $ | 30,453 | $ | 23,369 | $ | 25,614 | $ | 25,121 | |||||||||
| Purchased credit-impaired (“PCI”) loans | $ | 4,969 | $ | 7,118 | $ | 7,575 | $ | 5,836 | $ | 9,673 | |||||||||
| Delinquent loans 30 to 89 days | $ | 25,224 | $ | 18,516 | $ | 22,598 | $ | 8,553 | $ | 15,643 | |||||||||
| Troubled debt restructurings: | |||||||||||||||||||
| Non-performing (included in total non-performing loans above) | $ | 1,251 | $ | 3,547 | $ | 3,471 | $ | 3,520 | $ | 2,990 | |||||||||
| Performing | 34,130 | 26,974 | 27,042 | 26,396 | 28,173 | ||||||||||||||
| Total troubled debt restructurings | $ | 35,381 | $ | 30,521 | $ | 30,513 | $ | 29,916 | $ | 31,163 | |||||||||
| Allowance for loan losses | $ | 16,557 | $ | 16,151 | $ | 15,183 | $ | 15,617 | $ | 16,678 | |||||||||
| Allowance for loan losses as a percent of total loans receivable (1) | 0.42 | % | 0.42 | % | 0.40 | % | 0.51 | % | 0.53 | % | |||||||||
| Allowance for loan losses as a percent of total non-performing loans | 101.82 | 74.50 | 111.92 | 94.61 | 108.79 | ||||||||||||||
| Non-performing loans as a percent of total loans receivable | 0.42 | 0.56 | 0.35 | 0.54 | 0.48 | ||||||||||||||
| Non-performing assets as a percent of total assets | 0.48 | 0.59 | 0.45 | 0.62 | 0.62 | ||||||||||||||
| (1) | The loans acquired from Ocean Shore, Cape, and Colonial American were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for loan losses, was $21,794, $24,002, $25,973, $17,051, and $27,281, at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively. |
NET CHARGE-OFFS
| For the three months ended | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||
| Net Charge-offs: | |||||||||||||||||||
| Loan charge-offs | $ | (1,299 | ) | $ | (205 | ) | $ | (979 | ) | $ | (2,116 | ) | $ | (223 | ) | ||||
| Recoveries on loans | 540 | 473 | 35 | 167 | 25 | ||||||||||||||
| Net loan (charge-offs) recoveries | $ | (759 | ) | $ | 268 | $ | (944 | ) | $ | (1,949 | ) | $ | (198 | ) | |||||
| Net loan charge-offs to average total loans (annualized) |
0.08 | % | NM* | 0.11 | % | 0.25 | % | 0.03 | % | ||||||||||
| Net charge-off detail – (loss) recovery: | |||||||||||||||||||
| Commercial | $ | (81 | ) | $ | 311 | $ | (510 | ) | $ | (1,707 | ) | $ | (84 | ) | |||||
| Residential mortgage and construction | (716 | ) | (49 | ) | (233 | ) | (161 | ) | (69 | ) | |||||||||
| Home equity loans and lines | 39 | 24 | (194 | ) | (83 | ) | (45 | ) | |||||||||||
| Other consumer | (1 | ) | (18 | ) | (7 | ) | 2 | — | |||||||||||
| Net loan (charge-offs) recoveries | $ | (759 | ) | $ | 268 | $ | (944 | ) | $ | (1,949 | ) | $ | (198 | ) | |||||
| Note: Included in net loan charge-offs for the three months ended June 30, 2017, December 31, 2016 and September 30, 2016 are $925, $535 and $1,627, respectively, relating to under-performing loans sold or held-for-sale. |
|||||||||||||||||||
| * Not meaningful | |||||||||||||||||||
| OceanFirst Financial Corp. ANALYSIS OF NET INTEREST INCOME |
||||||||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/ Cost |
Average Balance |
Interest | Average Yield/ Cost |
Average Balance |
Interest | Average Yield/ Cost |
|||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||
| Interest-earning deposits and short- term investments |
$ | 114,019 | $ | 211 | 0.74 | % | $ | 214,165 | $ | 409 | 0.77 | % | $ | 40,567 | $ | 41 | 0.41 | % | ||||||||||||||
| Securities (1) and FHLB stock | 786,964 | 4,060 | 2.07 | 703,712 | 3,863 | 2.23 | 571,463 | 2,579 | 1.82 | |||||||||||||||||||||||
| Loans receivable, net (2) | ||||||||||||||||||||||||||||||||
| Commercial | 1,850,737 | 22,057 | 4.78 | 1,830,641 | 21,140 | 4.68 | 1,471,159 | 17,783 | 4.86 | |||||||||||||||||||||||
| Residential | 1,718,413 | 17,304 | 4.04 | 1,704,035 | 17,339 | 4.13 | 1,076,557 | 10,225 | 3.82 | |||||||||||||||||||||||
| Home Equity | 283,124 | 3,225 | 4.57 | 287,335 | 3,245 | 4.58 | 236,937 | 2,498 | 4.24 | |||||||||||||||||||||||
| Other | 1,161 | 22 | 7.60 | 1,248 | 18 | 5.85 | 1,011 | 15 | 5.97 | |||||||||||||||||||||||
| Allowance for loan loss net of deferred loan fees |
(12,518 | ) | — | — | (12,123 | ) | — | — | (13,146 | ) | — | — | ||||||||||||||||||||
| Loans Receivable, net | 3,840,917 | 42,608 | 4.45 | 3,811,136 | 41,742 | 4.44 | 2,772,518 | 30,521 | 4.43 | |||||||||||||||||||||||
| Total interest-earning assets | 4,741,900 | 46,879 | 3.97 | 4,729,013 | 46,014 | 3.95 | 3,384,548 | 33,141 | 3.94 | |||||||||||||||||||||||
| Non-interest-earning assets | 473,736 | 482,058 | 262,554 | |||||||||||||||||||||||||||||
| Total assets | $ | 5,215,636 | $ | 5,211,071 | $ | 3,647,102 | ||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: |
||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
| Interest-bearing checking | $ | 1,716,930 | 1,038 | 0.24 | % | $ | 1,668,545 | 876 | 0.21 | % | $ | 1,166,298 | 503 | 0.17 | % | |||||||||||||||||
| Money market | 422,439 | 281 | 0.27 | 445,186 | 311 | 0.28 | 298,530 | 180 | 0.24 | |||||||||||||||||||||||
| Savings | 679,806 | 97 | 0.06 | 674,721 | 130 | 0.08 | 434,438 | 41 | 0.04 | |||||||||||||||||||||||
| Time deposits | 624,020 | 1,498 | 0.96 | 640,269 | 1,464 | 0.93 | 417,301 | 1,047 | 1.01 | |||||||||||||||||||||||
| Total | 3,443,195 | 2,914 | 0.34 | 3,428,721 | 2,781 | 0.33 | 2,316,567 | 1,771 | 0.31 | |||||||||||||||||||||||
| Securities sold under agreements to repurchase |
73,574 | 25 | 0.14 | 76,351 | 27 | 0.14 | 76,907 | 26 | 0.14 | |||||||||||||||||||||||
| FHLB Advances | 259,291 | 1,118 | 1.73 | 250,339 | 1,070 | 1.73 | 287,171 | 1,201 | 1.68 | |||||||||||||||||||||||
| Other borrowings | 56,456 | 648 | 4.60 | 56,392 | 653 | 4.70 | 22,500 | 129 | 2.31 | |||||||||||||||||||||||
| Total interest-bearing liabilities |
3,832,516 | 4,705 | 0.49 | 3,811,803 | 4,531 | 0.48 | 2,703,145 | 3,127 | 0.47 | |||||||||||||||||||||||
| Non-interest-bearing deposits | 772,739 | 791,036 | 529,230 | |||||||||||||||||||||||||||||
| Non-interest-bearing liabilities | 23,260 | 29,399 | 26,033 | |||||||||||||||||||||||||||||
| Total liabilities | 4,628,515 | 4,632,238 | 3,258,408 | |||||||||||||||||||||||||||||
| Stockholders’ equity | 587,121 | 578,833 | 388,694 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 5,215,636 | $ | 5,211,071 | $ | 3,647,102 | ||||||||||||||||||||||||||
| Net interest income | $ | 42,174 | $ | 41,483 | $ | 30,014 | ||||||||||||||||||||||||||
| Net interest rate spread (3) | 3.48 | % | 3.47 | % | 3.47 | % | ||||||||||||||||||||||||||
| Net interest margin (4) | 3.57 | % | 3.56 | % | 3.57 | % | ||||||||||||||||||||||||||
| Total cost of deposits (including non- interest-bearing deposits) |
0.28 | % | 0.27 | % | 0.25 | % | ||||||||||||||||||||||||||
| (1) Amounts are recorded at average amortized cost. | ||||||||||||||||||||||||||||||||
| (2) 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. |
||||||||||||||||||||||||||||||||
| (3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | ||||||||||||||||||||||||||||||||
| (4) Net interest margin represents net interest income divided by average interest-earning assets. | ||||||||||||||||||||||||||||||||
| For the Six Months Ended, | |||||||||||||||||||||
| June 30, 2017 | June 30, 2016 | ||||||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/ Cost |
Average Balance |
Interest | Average Yield/ Cost |
|||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Interest-earning deposits and short-term investments | $ | 163,815 | $ | 620 | 0.76 | % | $ | 44,533 | $ | 70 | 0.32 | % | |||||||||
| Securities (1) and FHLB stock | 745,568 | 7,923 | 2.14 | 508,590 | 4,588 | 1.81 | |||||||||||||||
| Loans receivable, net (2) | |||||||||||||||||||||
| Commercial | 1,840,745 | 43,197 | 4.73 | 1,221,604 | 28,780 | 4.74 | |||||||||||||||
| Residential | 1,711,263 | 34,643 | 4.08 | 954,059 | 18,265 | 3.85 | |||||||||||||||
| Home Equity | 285,208 | 6,470 | 4.57 | 214,146 | 4,488 | 4.21 | |||||||||||||||
| Other | 1,215 | 40 | 6.64 | 756 | 23 | 6.12 | |||||||||||||||
| Allowance for loan loss net of deferred loan fees | (12,322 | ) | — | — | (13,396 | ) | — | — | |||||||||||||
| Loans Receivable, net | 3,826,109 | 84,350 | 4.45 | 2,377,169 | 51,556 | 4.36 | |||||||||||||||
| Total interest-earning assets | 4,735,492 | 92,893 | 3.96 | 2,930,292 | 56,214 | 3.86 | |||||||||||||||
| Non-interest-earning assets | 477,874 | 195,768 | |||||||||||||||||||
| Total assets | $ | 5,213,366 | $ | 3,126,060 | |||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Interest-bearing checking | $ | 1,692,820 | 1,913 | 0.23 | % | $ | 1,033,091 | 808 | 0.16 | % | |||||||||||
| Money market | 433,750 | 591 | 0.27 | 227,428 | 250 | 0.22 | |||||||||||||||
| Savings | 677,278 | 227 | 0.07 | 375,293 | 67 | 0.04 | |||||||||||||||
| Time deposits | 632,099 | 2,964 | 0.95 | 340,511 | 1,917 | 1.13 | |||||||||||||||
| Total | 3,435,947 | 5,695 | 0.33 | 1,976,323 | 3,042 | 0.31 | |||||||||||||||
| Securities sold under agreements to repurchase | 74,955 | 52 | 0.14 | 80,207 | 54 | 0.14 | |||||||||||||||
| FHLB Advances | 254,840 | 2,186 | 1.73 | 276,547 | 2,284 | 1.66 | |||||||||||||||
| Other borrowings | 56,424 | 1,303 | 4.66 | 22,500 | 261 | 2.33 | |||||||||||||||
| Total interest-bearing liabilities | 3,822,166 | 9,236 | 0.49 | 2,355,577 | 5,641 | 0.48 | |||||||||||||||
| Non-interest-bearing deposits | 781,888 | 436,300 | |||||||||||||||||||
| Non-interest-bearing liabilities | 26,312 | 19,836 | |||||||||||||||||||
| Total liabilities | 4,630,366 | 2,811,713 | |||||||||||||||||||
| Stockholders’ equity | 583,000 | 314,347 | |||||||||||||||||||
| Total liabilities and equity | $ | 5,213,366 | $ | 3,126,060 | |||||||||||||||||
| Net interest income | $ | 83,657 | $ | 50,573 | |||||||||||||||||
| Net interest rate spread (3) | 3.47 | % | 3.38 | % | |||||||||||||||||
| Net interest margin (4) | 3.56 | % | 3.47 | % | |||||||||||||||||
| Total cost of deposits (including non-interest-bearing deposits) | 0.27 | % | 0.25 | % | |||||||||||||||||
| (1) Amounts are recorded at average amortized cost. | |||||||||||||||||||||
| (2) 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. |
|||||||||||||||||||||
| (3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | |||||||||||||||||||||
| (4) Net interest margin represents net interest income divided by average interest-earning assets. | |||||||||||||||||||||
| OceanFirst Financial Corp. SELECTED QUARTERLY FINANCIAL DATA (in thousands, except per share amounts) |
||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Selected Financial Condition Data: | ||||||||||||||||||||
| Total assets | $ | 5,202,200 | $ | 5,196,340 | $ | 5,167,052 | $ | 4,151,017 | $ | 4,047,493 | ||||||||||
| Securities available-for-sale, at estimated fair value | 62,154 | 47,104 | 12,224 | 2,497 | 12,509 | |||||||||||||||
| Securities held-to-maturity, net | 720,511 | 695,918 | 598,691 | 470,642 | 513,721 | |||||||||||||||
| Federal Home Loan Bank of New York stock | 20,358 | 19,253 | 19,313 | 18,289 | 21,128 | |||||||||||||||
| Loans receivable, net | 3,868,805 | 3,825,600 | 3,803,443 | 3,028,696 | 3,130,046 | |||||||||||||||
| Deposits | 4,176,909 | 4,198,663 | 4,187,750 | 3,324,681 | 3,206,262 | |||||||||||||||
| Federal Home Loan Bank advances | 277,541 | 250,021 | 250,498 | 251,146 | 312,603 | |||||||||||||||
| Securities sold under agreements to repurchase and other borrowings | 131,673 | 133,798 | 126,494 | 125,477 | 90,173 | |||||||||||||||
| Stockholders’ equity | 587,303 | 582,680 | 572,038 | 417,244 | 409,258 | |||||||||||||||
| For the Three Months Ended, | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Interest income | $ | 46,879 | $ | 46,014 | $ | 39,904 | $ | 37,307 | $ | 33,141 | ||||||||||
| Interest expense | 4,705 | 4,531 | 4,150 | 3,372 | 3,127 | |||||||||||||||
| Net interest income | 42,174 | 41,483 | 35,754 | 33,935 | 30,014 | |||||||||||||||
| Provision for loan losses | 1,165 | 700 | 510 | 888 | 662 | |||||||||||||||
| Net interest income after provision for loan losses | 41,009 | 40,783 | 35,244 | 33,047 | 29,352 | |||||||||||||||
| Other income | 6,973 | 5,995 | 6,257 | 5,896 | 4,883 | |||||||||||||||
| Operating expenses | 28,527 | 29,481 | 25,833 | 23,715 | 21,457 | |||||||||||||||
| Branch consolidation expenses | 5,451 | 33 | — | — | — | |||||||||||||||
| Merger related expenses | 3,155 | 1,447 | 6,632 | 1,311 | 7,189 | |||||||||||||||
| Income before provision for income taxes | 10,849 | 15,817 | 9,036 | 13,917 | 5,589 | |||||||||||||||
| Provision for income taxes | 3,170 | 3,799 | 2,984 | 4,789 | 1,928 | |||||||||||||||
| Net income | $ | 7,679 | $ | 12,018 | $ | 6,052 | $ | 9,128 | $ | 3,661 | ||||||||||
| Diluted earnings per share | $ | 0.23 | $ | 0.36 | $ | 0.22 | $ | 0.35 | $ | 0.16 | ||||||||||
| Net accretion/amortization of purchase accounting adjustments included in net interest income |
$ | 1,899 | $ | 2,175 | $ | 1,385 | $ | 1,637 | $ | 1,267 | ||||||||||
| At or For the Three Months Ended | ||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||
| Selected Financial Ratios and Other Data(1): | ||||||||||||||
| Performance Ratios (Annualized): | ||||||||||||||
| Return on average assets (2) | 0.59 | % | 0.94 | % | 0.53 | % | 0.88 | % | 0.40 | % | ||||
| Return on average stockholders’ equity (2) | 5.25 | 8.42 | 5.10 | 8.77 | 3.79 | |||||||||
| Return on average tangible stockholders’ equity (2) (3) | 7.19 | 11.50 | 6.48 | 10.58 | 4.32 | |||||||||
| Stockholders’ equity to total assets | 11.29 | 11.21 | 11.07 | 10.05 | 10.11 | |||||||||
| Tangible stockholders’ equity to tangible assets (3) | 8.51 | 8.43 | 8.30 | 8.50 | 8.51 | |||||||||
| Net interest rate spread | 3.48 | 3.47 | 3.31 | 3.49 | 3.47 | |||||||||
| Net interest margin | 3.57 | 3.56 | 3.40 | 3.56 | 3.57 | |||||||||
| Operating expenses to average assets (2) | 2.86 | 2.41 | 2.83 | 2.43 | 3.16 | |||||||||
| Efficiency ratio (2) (4) | 75.55 | 65.21 | 77.28 | 62.83 | 82.09 | |||||||||
| Loans to deposits | 92.62 | 91.11 | 90.82 | 91.10 | 97.62 | |||||||||
| For the Six Months Ended June 30, | |||||
| 2017 | 2016 | ||||
| Performance Ratios (Annualized): | |||||
| Return on average assets (2) | 0.76 | % | 0.51 | % | |
| Return on average stockholders’ equity (2) | 6.81 | 5.03 | |||
| Return on average tangible stockholders’ equity (2) (3) | 9.32 | 5.47 | |||
| Net interest rate spread | 3.47 | 3.38 | |||
| Net interest margin | 3.56 | 3.47 | |||
| Operating expenses to average assets (2) | 2.63 | 2.92 | |||
| Efficiency ratio (2) (4) | 70.47 | 77.10 | |||
| At or For the Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Wealth Management: | ||||||||||||||||||||
| Assets under administration | $ | 214,479 | $ | 215,593 | $ | 218,336 | $ | 221,612 | $ | 221,277 | ||||||||||
| Per Share Data: | ||||||||||||||||||||
| Cash dividends per common share | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.13 | $ | 0.13 | ||||||||||
| Stockholders’ equity per common share at end of period | 18.05 | 17.95 | 17.80 | 16.14 | 15.89 | |||||||||||||||
| Tangible stockholders’ equity per common share at end of period (3) | 13.19 | 13.07 | 12.95 | 13.42 | 13.14 | |||||||||||||||
| Number of full-service customer facilities: | 51 | 61 | 61 | 50 | 50 | |||||||||||||||
| Quarterly Average Balances | ||||||||||||||||||||
| Total securities | $ | 786,964 | $ | 703,712 | $ | 545,302 | $ | 533,809 | $ | 571,463 | ||||||||||
| Loans, receivable, net | 3,840,917 | 3,811,136 | 3,282,703 | 3,085,691 | 2,772,518 | |||||||||||||||
| Total interest-earning assets | 4,741,900 | 4,729,013 | 4,187,809 | 3,787,545 | 3,384,548 | |||||||||||||||
| Total assets | 5,215,636 | 5,211,071 | 4,556,774 | 4,103,835 | 3,647,102 | |||||||||||||||
| Interest-bearing transaction deposits | 2,819,175 | 2,788,452 | 2,512,351 | 2,300,589 | 1,899,266 | |||||||||||||||
| Time deposits | 624,020 | 640,269 | 527,817 | 477,496 | 417,301 | |||||||||||||||
| Total borrowed funds | 389,321 | 383,082 | 379,289 | 358,960 | 386,578 | |||||||||||||||
| Total interest-bearing liabilities | 3,832,516 | 3,811,803 | 3,419,457 | 3,137,045 | 2,703,145 | |||||||||||||||
| Non-interest bearing deposits | 772,739 | 791,036 | 622,882 | 521,088 | 529,230 | |||||||||||||||
| Stockholder’s equity | 587,121 | 578,833 | 471,662 | 414,166 | 388,694 | |||||||||||||||
| Total deposits | 4,215,934 | 4,219,757 | 3,663,050 | 3,299,173 | 2,845,797 | |||||||||||||||
| Quarterly Yields | ||||||||||||||||||||
| Total securities | 2.07 | % | 2.23 | % | 1.91 | % | 1.91 | % | 1.82 | % | ||||||||||
| Loans, receivable, net | 4.45 | 4.44 | 4.46 | 4.46 | 4.43 | |||||||||||||||
| Total interest-earning assets | 3.97 | 3.95 | 3.79 | 3.92 | 3.94 | |||||||||||||||
| Interest-bearing transaction deposits | 0.20 | 0.18 | 0.18 | 0.16 | 0.15 | |||||||||||||||
| Time deposits | 0.96 | 0.93 | 0.97 | 0.96 | 1.01 | |||||||||||||||
| Total borrowed funds | 1.85 | 1.85 | 1.84 | 1.43 | 1.41 | |||||||||||||||
| Total interest-bearing liabilities | 0.49 | 0.48 | 0.48 | 0.43 | 0.47 | |||||||||||||||
| Net interest spread | 3.48 | 3.47 | 3.31 | 3.49 | 3.47 | |||||||||||||||
| Net interest margin | 3.57 | 3.56 | 3.40 | 3.56 | 3.57 | |||||||||||||||
| Total deposits | 0.28 | 0.27 | 0.26 | 0.25 | 0.25 | |||||||||||||||
| (1) With the exception of end of quarter ratios, all ratios are based on average daily balances. | ||||||||||||||||||||
| (2) Performance ratios for each period include merger related and branch consolidation expenses. Refer to Other Items – Non-GAAP Reconciliation for impact of merger related and branch consolidation expenses. |
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| (3) Tangible stockholders’ equity and tangible assets exclude intangible assets relating to goodwill and core deposit intangible. | ||||||||||||||||||||
| (4) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income. | ||||||||||||||||||||
| OceanFirst Financial Corp. OTHER ITEMS (dollars in thousands, except per share amounts) |
NON-GAAP RECONCILIATION
| For the three months ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Core earnings: | ||||||||||||||||||||
| Net income | $ | 7,679 | $ | 12,018 | $ | 6,052 | $ | 9,128 | $ | 3,661 | ||||||||||
| Add: Merger related expenses | 3,155 | 1,447 | 6,632 | 1,311 | 7,189 | |||||||||||||||
| Branch consolidation expense | 5,451 | 33 | — | — | — | |||||||||||||||
| Accelerated stock award expense | — | 242 | — | — | — | |||||||||||||||
| Loss on sale of investment securities available for sale | — | — | — | — | 12 | |||||||||||||||
| Federal Home Loan Bank prepayment fee | — | — | — | — | 136 | |||||||||||||||
| Less: Income tax benefit on items | (3,012 | ) | (587 | ) | (2,108 | ) | (172 | ) | (2,311 | ) | ||||||||||
| Core earnings | $ | 13,273 | $ | 13,153 | $ | 10,576 | $ | 10,267 | $ | 8,687 | ||||||||||
| Core diluted earnings per share | $ | 0.40 | $ | 0.40 | $ | 0.38 | $ | 0.40 | $ | 0.38 | ||||||||||
| Core ratios (Annualized): | ||||||||||||||||||||
| Return on average assets | 1.02 | % | 1.02 | % | 0.92 | % | 1.00 | % | 0.96 | % | ||||||||||
| Return on average tangible stockholder’s equity | 12.42 | 12.56 | 11.33 | 11.90 | 10.26 | |||||||||||||||
| Efficiency ratio | 58.04 | 61.58 | 61.49 | 59.54 | 61.06 | |||||||||||||||
COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Total stockholders’ equity | $ | 587,303 | $ | 582,680 | $ | 572,038 | $ | 417,244 | $ | 409,258 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 148,433 | 147,815 | 145,064 | 66,537 | 67,102 | |||||||||||||||
| Core deposit intangible | 9,887 | 10,400 | 10,924 | 3,722 | 3,903 | |||||||||||||||
| Tangible stockholders’ equity | $ | 428,983 | $ | 424,465 | $ | 416,050 | $ | 346,985 | $ | 338,253 | ||||||||||
| Total assets | $ | 5,202,200 | $ | 5,196,340 | $ | 5,167,052 | $ | 4,151,017 | $ | 4,047,493 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 148,433 | 147,815 | 145,064 | 66,537 | 67,102 | |||||||||||||||
| Core deposit intangible | 9,887 | 10,400 | 10,924 | 3,722 | 3,903 | |||||||||||||||
| Tangible assets | $ | 5,043,880 | $ | 5,038,125 | $ | 5,011,064 | $ | 4,080,758 | $ | 3,976,488 | ||||||||||
| Tangible stockholders’ equity to tangible assets | 8.51 | % | 8.43 | % | 8.30 | % | 8.50 | % | 8.51 | % | ||||||||||
CONTACT: Company Contact: Michael J. Fitzpatrick Chief Financial Officer OceanFirst Financial Corp. Tel: (732) 240-4500, ext. 7506 Fax: (732) 349-5070 Email: [email protected]