OceanFirst Financial Corp. (NASDAQ:OCFC), (the
“Company”), the holding company for OceanFirst Bank (the “Bank”),
today announced that diluted earnings per share were $0.39 for the
three months ended September 30, 2017, as compared to $0.35
for the corresponding prior year period. For the nine months ended
September 30, 2017, diluted earnings per share were $0.98, as
compared to $0.77 for the prior corresponding year period.
The results of operations for the three and nine
months ended September 30, 2017 include merger related
expenses and branch consolidation expenses and for the nine months
ended September 30, 2017 also include the acceleration of stock
award expense due to the retirement of a director. These items
decreased net income, net of tax benefit, for the three and nine
months ended September 30, 2017, by $2.1 million and $8.8
million, respectively. Excluding these items, core earnings
for the three and nine months ended September 30, 2017 were
$14.9 million, or $0.45 per diluted share, and $41.3 million, or
$1.25 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:
- The Company achieved record quarterly core earnings and diluted
earnings per share of $14.9 million and $0.45, respectively.
- The Company grew deposits $173.4 million, reducing its loan to
deposit ratio to 89.0%, while the cost of deposits increased only
one basis point from the prior linked quarter, to 0.29%.
- Asset quality improved as non-performing loans decreased to
$15.1 million, and non-performing loans as a percentage of total
loans decreased to 0.39%.
“The Company delivered very strong results for
the quarter with record earnings and core diluted earnings per
share increasing 12.5% over the prior year quarter,” said Chairman
and Chief Executive Officer Christopher D. Maher. Mr. Maher added,
“We are pleased to report solid deposit growth which reflects
organic growth as well as retention and expansion of relationships
with depositors who have joined OceanFirst from the completed
acquisitions. The Company continues to focus on credit quality
and realizing expense reductions from merger efficiencies and
branch consolidations.”
On June 30, 2017, the Company announced a
definitive agreement and plan of merger (the “merger agreement”)
with Sun Bancorp, Inc. (“Sun”) (NASDAQ:SNBC). On October 24
and 25, 2017, Sun and the Company received their respective
requisite stockholder approvals for the merger. Regulatory
approval of the merger was received from the Federal Reserve Bank
of Philadelphia on October 17, 2017. The regulatory application for
the transaction remains under review by the Office of the
Comptroller of the Currency (“OCC”). Subject to receipt
of OCC approval and other customary closing conditions, the Company
expects to close the transaction in January 2018 and anticipates
full integration of Sun’s branches and core operating systems in
the second quarter of 2018.
The Company also announced that the Company’s
Board of Directors declared its eighty-third consecutive quarterly
cash dividend on common stock. The dividend, for the quarter
ended September 30, 2017, of $0.15 per share will be paid on
November 17, 2017 to stockholders of record on
November 6, 2017.
Results of Operations
On May 2, 2016, the Company completed its
acquisition of Cape Bancorp, Inc. (“Cape”) and its results of
operations are included in the consolidated results for the three
and nine months ended September 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 Holding Company (“Ocean Shore”) and its
results of operations are included in the consolidated results for
the three and nine months ended September 30, 2017, but are
excluded from the results of operations for the three and nine
months ended September 30, 2016.
Net income for the quarter ended
September 30, 2017, was $12.8 million, or $0.39 per diluted
share, as compared to $9.1 million, or $0.35 per diluted share, for
the corresponding prior year period. Net income for the nine months
ended September 30, 2017 was $32.5 million, or $0.98 per
diluted share, as compared to net income of $17.0 million, or $0.77
per diluted share, for the corresponding prior year period.
Net income for the three and nine months ended September 30,
2017, includes merger related and branch consolidation expenses and
for the nine months ended September 30, 2017, also includes
the acceleration of stock award expense due to the retirement of a
director. These items decreased net income, net of tax
benefit, for the three and nine months ended September 30,
2017, by $2.1 million and $8.8 million, respectively. Net
income for the three and nine months ended September 30, 2016
includes merger related expenses of $1.3 million and $9.9 million,
respectively. Excluding these items, net income for the three
and nine months ended September 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 nine
months ended September 30, 2017, of $158,000 and $1.7 million,
respectively.
Net interest income for the three and nine
months ended September 30, 2017, increased to $43.1 million
and $126.7 million, respectively, as compared to $33.9 million and
$84.5 million, respectively, for the same prior year periods,
reflecting an increase in interest-earning assets. Average
interest-earning assets increased $1.086 billion and $1.574
billion, respectively, for the three and nine months ended
September 30, 2017, as compared to the same prior year
periods. The averages for the three and nine months ended
September 30, 2017, were favorably impacted by the
interest-earning assets acquired in the Acquisition Transactions.
The net interest margin for the three and nine months ended
September 30, 2017 decreased to 3.50% and increased to 3.54%,
respectively, from 3.56% and 3.51%, respectively, for the same
prior year periods. The yields on average interest-earning assets
decreased to 3.91% and increased to 3.93%, respectively, for the
three and nine months ended September 30, 2017, from 3.92% and
3.88%, respectively, for the same prior year periods. For the three
and nine months ended September 30, 2017, the cost of average
interest-bearing liabilities increased to 0.50% and 0.49%,
respectively, from 0.43% and 0.46%, respectively, in the
corresponding prior year periods. The total cost of deposits
(including non-interest bearing deposits) was 0.29% and 0.28%,
respectively, for the three and nine months ended
September 30, 2017, as compared to 0.25% for both the three
and nine months ended September 30, 2016.
Net interest income for the three months ended
September 30, 2017, increased $882,000, as compared to the
prior linked quarter, as average interest-earning assets increased
$131.8 million. The net interest margin decreased to 3.50% for the
three months ended September 30, 2017, from 3.57% for the
prior linked quarter.
For the three and nine months ended
September 30, 2017, the provision for loan losses was $1.2
million and $3.0 million, respectively, as compared to $888,000 and
$2.1 million, respectively, for the corresponding prior year
periods, and remained unchanged at $1.2 million when compared to
the prior linked quarter. Net loan charge-offs were $1.1 million
and $1.6 million, respectively, for the three and nine months ended
September 30, 2017, as compared to net loan charge-offs of
$1.9 million and $3.2 million, respectively, in the corresponding
prior year periods, and $759,000 in the prior linked quarter.
Non-performing loans totaled $15.1 million at September 30,
2017, as compared to $16.3 million at June 30, 2017, and $16.5
million at September 30, 2016. The decrease in non-performing
loans from the prior linked quarter was partly due to the sale of
non-performing residential loans totaling $3.5 million partially
offset by the addition of one non-performing commercial loan
totaling $3.2 million.
For the three and nine months ended
September 30, 2017, other income increased to $7.4 million and
$20.3 million, respectively, as compared to $5.9 million and $14.2
million, respectively, for the corresponding prior year periods.
The increases were primarily due to the impact of the Acquisition
Transactions, which added $1.1 million and $4.9 million,
respectively, to other income for the three and nine months ended
September 30, 2017, as compared to the same prior year
periods. Excluding the Acquisition Transactions, the remaining
increase in other income for the three months ended
September 30, 2017, was primarily due to higher deposit and
bank card related fees of $272,000 and $71,000, respectively, as
compared to the same prior year period. In addition, income from
other real estate operations, excluding the Acquisition
Transactions, increased $364,000 which was offset by a decrease in
the net gain on the sale of loans available for sale (included in
other income) of $360,000. For the nine months ended
September 30, 2017, excluding the Acquisition Transactions,
the increase in other income was primarily due to higher deposit
and bank card related fees of $1.0 million and $153,000,
respectively, as compared to the same prior year period. Excluding
the Acquisition Transactions, an increase in income from other real
estate operations of $609,000 was offset by a decrease in the net
gain on the sale of loans (included in other income) of
$697,000.
For the three months ended September 30,
2017, other income increased $386,000, as compared to the prior
linked quarter. The increase in other income over the prior linked
quarter was primarily due to an increase in the net gain from other
real estate operations of $327,000.
Operating expenses increased to $30.7 million
and $98.8 million, respectively, for the three and nine months
ended September 30, 2017, as compared to $25.0 million and
$70.4 million, respectively, in the same prior year periods.
Operating expenses for the three and nine months ended
September 30, 2017, included $3.2 million and $13.2 million,
respectively, of merger related and branch consolidation expenses,
as compared to $1.3 million and $9.9 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 Acquisition Transactions, which
added $2.4 million and $18.9 million for the three and nine months
ended September 30, 2017, respectively. For the three months
ended September 30, 2017, excluding the Acquisition Transaction
expenses, there were increases in marketing expense and loan
related expenses. For the nine months ended September 30,
2017, excluding the Acquisition Transaction expenses, there were
increases in compensation and employee benefits expense, equipment
expense, marketing expense and professional fees.
For the three months ended September 30,
2017, operating expenses, excluding merger and branch consolidation
expenses, decreased $947,000, as compared to the prior linked
quarter, primarily due to the closing of 15 branches in mid May and
early July.
The provision for income taxes was $5.7 million
and $12.7 million, respectively, for the three and nine months
ended September 30, 2017, as compared to $4.8 million and $9.2
million, respectively, for the same prior year periods. The
effective tax rate was 30.8% and 28.0%, respectively, for the three
and nine months ended September 30, 2017, as compared to 34.4%
and 35.0%, respectively, for the same prior year periods. The
lower effective tax rate for the three and nine months ended
September 30, 2017 resulted from the adoption of ASU 2016-09
“Compensation - Stock Compensation,” which decreased income tax
expense by $158,000 and $1.7 million, respectively. Excluding the
impact of ASU 2016-09, the effective tax rate would have been 31.6%
and 31.8% for the three and nine months ended September 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 nine months ended September 30,
2017, was related to the exercise of options assumed in the
acquisition of Cape and Ocean Shore and the increase in the
Company’s stock price. Excluding the tax benefit of exercised stock
options and vested stock awards, the lower effective tax rate for
the three and nine months ended September 30, 2017, as compared to
the same prior year periods, was primarily due to the deductibility
of merger related expenses and an increase in tax exempt
income.
Financial Condition
Total assets increased by $216.9 million to
$5.384 billion at September 30, 2017, from $5.167 billion at
December 31, 2016. Cash and due from banks decreased by
$46.1 million, to $255.3 million at September 30, 2017, from
$301.4 million at December 31, 2016, as these funds were
deployed into higher-yielding securities which increased $199.1
million. Loans receivable, net, increased by $66.7 million, to
$3.870 billion at September 30, 2017 from $3.803 billion at
December 31, 2016. Premises and equipment decreased $7.0
million at September 30, 2017, as compared to
December 31, 2016, due to the consolidation of 15 branches
during the nine months ended September 30, 2017. The premises
and equipment at these locations were written down to their net
realizable value and the remaining balance was reclassified to
assets held for sale.
Deposits increased by $162.5 million, to $4.350
billion at September 30, 2017, from $4.188 billion at
December 31, 2016. The loan-to-deposit ratio at
September 30, 2017 was 89.0%, as compared to 90.8% at
December 31, 2016.
Stockholders’ equity increased to $596.3 million
at September 30, 2017, as compared to $572.0 million at
December 31, 2016. At September 30, 2017, there were 1.8
million shares available for repurchase under the Company’s stock
repurchase programs. In the nine months ended
September 30, 2017, the Company did not repurchase any shares
under these repurchase programs. Tangible stockholders’
equity per common share increased to $13.47 at September 30,
2017, as compared to $12.95 at December 31, 2016.
Asset Quality
The Company’s non-performing loans increased to
$15.1 million at September 30, 2017, as compared to $13.6
million at December 31, 2016. The increase was primarily
due to the addition of two commercial real estate relationships
totaling $7.4 million, partially 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. The decrease in
non-performing residential loans in the third quarter of 2017 was
due to a bulk sale of $3.5 million in non-performing residential
loans. Non-performing loans do not include $4.9 million of
purchased credit-impaired (“PCI”) loans acquired in the Acquisition
Transactions. The Company’s other real estate owned totaled
$9.3 million at September 30, 2017, as compared to $9.8
million at December 31, 2016. At September 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 $19.8
million and $26.0 million at September 30, 2017 and December
31, 2016, respectively, 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 109.68%
at September 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, and accelerated stock award expense relating to a
director retirement, 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, October 27, 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 10112558 from one hour
after the end of the call until January 27, 2018. 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 $5.4 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) |
|
|
|
September 30, 2017 |
|
June 30, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
|
Cash and due from
banks |
|
$ |
255,258 |
|
|
$ |
107,660 |
|
|
$ |
301,373 |
|
|
$ |
311,583 |
|
Securities
available-for-sale, at estimated fair value |
|
67,133 |
|
|
62,154 |
|
|
12,224 |
|
|
2,497 |
|
Securities
held-to-maturity, net (estimated fair value of $746,497 at
September 30, 2017, $724,250 at June 30, 2017, $598,119 at December
31, 2016, and $478,727 at September 30, 2016) |
|
742,886 |
|
|
720,511 |
|
|
598,691 |
|
|
470,642 |
|
Federal Home Loan Bank
of New York stock, at cost |
|
18,472 |
|
|
20,358 |
|
|
19,313 |
|
|
18,289 |
|
Loans receivable,
net |
|
3,870,109 |
|
|
3,868,805 |
|
|
3,803,443 |
|
|
3,028,696 |
|
Loans
held-for-sale |
|
338 |
|
|
168 |
|
|
1,551 |
|
|
21,679 |
|
Interest and dividends
receivable |
|
13,627 |
|
|
13,036 |
|
|
11,989 |
|
|
9,396 |
|
Other real estate
owned |
|
9,334 |
|
|
8,898 |
|
|
9,803 |
|
|
9,107 |
|
Premises and equipment,
net |
|
64,350 |
|
|
59,509 |
|
|
71,385 |
|
|
51,243 |
|
Bank Owned Life
Insurance |
|
134,298 |
|
|
133,572 |
|
|
132,172 |
|
|
106,433 |
|
Deferred tax asset |
|
29,718 |
|
|
29,804 |
|
|
38,787 |
|
|
39,391 |
|
Assets held for
sale |
|
5,241 |
|
|
6,114 |
|
|
360 |
|
|
451 |
|
Other assets |
|
15,634 |
|
|
13,291 |
|
|
9,973 |
|
|
11,351 |
|
Core deposit
intangible |
|
9,380 |
|
|
9,887 |
|
|
10,924 |
|
|
3,722 |
|
Goodwill |
|
148,134 |
|
|
148,433 |
|
|
145,064 |
|
|
66,537 |
|
Total
assets |
|
$ |
5,383,912 |
|
|
$ |
5,202,200 |
|
|
$ |
5,167,052 |
|
|
$ |
4,151,017 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Deposits |
|
$ |
4,350,259 |
|
|
$ |
4,176,909 |
|
|
$ |
4,187,750 |
|
|
$ |
3,324,681 |
|
Securities sold under
agreements to repurchase with retail customers |
|
75,326 |
|
|
75,050 |
|
|
69,935 |
|
|
69,078 |
|
Federal Home Loan Bank
advances |
|
259,186 |
|
|
277,541 |
|
|
250,498 |
|
|
251,146 |
|
Other borrowings |
|
56,466 |
|
|
56,623 |
|
|
56,559 |
|
|
56,399 |
|
Advances by borrowers
for taxes and insurance |
|
14,371 |
|
|
15,036 |
|
|
14,030 |
|
|
8,287 |
|
Other liabilities |
|
32,052 |
|
|
13,738 |
|
|
16,242 |
|
|
24,182 |
|
Total
liabilities |
|
4,787,660 |
|
|
4,614,897 |
|
|
4,595,014 |
|
|
3,733,773 |
|
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 32,567,477, 32,528,658, 32,136,892, and
25,850,956 shares outstanding at September 30, 2017, June 30, 2017,
December 31, 2016, and September 30, 2016, respectively |
|
336 |
|
|
336 |
|
|
336 |
|
|
336 |
|
Additional paid-in capital |
|
353,817 |
|
|
353,296 |
|
|
364,433 |
|
|
308,979 |
|
Retained
earnings |
|
266,053 |
|
|
258,470 |
|
|
238,192 |
|
|
236,472 |
|
Accumulated other comprehensive loss |
|
(5,037 |
) |
|
(5,198 |
) |
|
(5,614 |
) |
|
(5,611 |
) |
Less:
Unallocated common stock held by Employee Stock Ownership Plan |
|
(2,549 |
) |
|
(2,620 |
) |
|
(2,761 |
) |
|
(2,832 |
) |
Treasury
stock, 999,295; 1,038,114; 1,429,880; and 7,715,816 shares at
September 30, 2017, June 30, 2017, December 31, 2016, and September
30, 2016, respectively |
|
(16,368 |
) |
|
(16,981 |
) |
|
(22,548 |
) |
|
(120,100 |
) |
Common
stock acquired by Deferred Compensation Plan |
|
(83 |
) |
|
(176 |
) |
|
(313 |
) |
|
(310 |
) |
Deferred
Compensation Plan Liability |
|
83 |
|
|
176 |
|
|
313 |
|
|
310 |
|
Total
stockholders’ equity |
|
596,252 |
|
|
587,303 |
|
|
572,038 |
|
|
417,244 |
|
Total
liabilities and stockholders’ equity |
|
$ |
5,383,912 |
|
|
$ |
5,202,200 |
|
|
$ |
5,167,052 |
|
|
$ |
4,151,017 |
|
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, 2017 |
|
June 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
|
|
|-------------------- (unaudited)
--------------------| |
|
|---------- (unaudited)
-----------| |
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
43,329 |
|
|
$ |
42,608 |
|
|
$ |
34,607 |
|
|
$ |
127,679 |
|
|
$ |
86,163 |
|
Mortgage-backed securities |
|
2,738 |
|
|
2,791 |
|
|
1,700 |
|
|
8,189 |
|
|
4,823 |
|
Investment securities and other |
|
1,963 |
|
|
1,480 |
|
|
1,000 |
|
|
5,055 |
|
|
2,535 |
|
Total
interest income |
|
48,030 |
|
|
46,879 |
|
|
37,307 |
|
|
140,923 |
|
|
93,521 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
3,126 |
|
|
2,914 |
|
|
2,083 |
|
|
8,821 |
|
|
5,125 |
|
Borrowed
funds |
|
1,848 |
|
|
1,791 |
|
|
1,289 |
|
|
5,389 |
|
|
3,888 |
|
Total
interest expense |
|
4,974 |
|
|
4,705 |
|
|
3,372 |
|
|
14,210 |
|
|
9,013 |
|
Net
interest income |
|
43,056 |
|
|
42,174 |
|
|
33,935 |
|
|
126,713 |
|
|
84,508 |
|
Provision for loan
losses |
|
1,165 |
|
|
1,165 |
|
|
888 |
|
|
3,030 |
|
|
2,113 |
|
Net
interest income after provision for loan losses
|
|
41,891 |
|
|
41,009 |
|
|
33,047 |
|
|
123,683 |
|
|
82,395 |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
Bankcard
services revenue |
|
1,785 |
|
|
1,837 |
|
|
1,347 |
|
|
5,202 |
|
|
3,409 |
|
Wealth
management revenue |
|
541 |
|
|
565 |
|
|
608 |
|
|
1,622 |
|
|
1,779 |
|
Fees and
service charges |
|
3,702 |
|
|
3,658 |
|
|
2,916 |
|
|
11,163 |
|
|
7,235 |
|
Net gain
(loss) from other real estate operations |
|
432 |
|
|
105 |
|
|
(63 |
) |
|
(196 |
) |
|
(782 |
) |
Income
from Bank Owned Life Insurance |
|
881 |
|
|
783 |
|
|
659 |
|
|
2,436 |
|
|
1,520 |
|
Other |
|
18 |
|
|
25 |
|
|
429 |
|
|
97 |
|
|
994 |
|
Total
other income |
|
7,359 |
|
|
6,973 |
|
|
5,896 |
|
|
20,324 |
|
|
14,155 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
14,673 |
|
|
15,328 |
|
|
13,558 |
|
|
46,138 |
|
|
33,456 |
|
Occupancy |
|
2,556 |
|
|
2,641 |
|
|
2,315 |
|
|
7,965 |
|
|
5,952 |
|
Equipment |
|
1,605 |
|
|
1,703 |
|
|
1,452 |
|
|
5,006 |
|
|
3,605 |
|
Marketing |
|
775 |
|
|
730 |
|
|
479 |
|
|
2,245 |
|
|
1,273 |
|
Federal
deposit insurance |
|
713 |
|
|
705 |
|
|
743 |
|
|
2,079 |
|
|
1,995 |
|
Data
processing |
|
2,367 |
|
|
2,046 |
|
|
2,140 |
|
|
6,809 |
|
|
5,286 |
|
Check
card processing |
|
871 |
|
|
815 |
|
|
623 |
|
|
2,640 |
|
|
1,548 |
|
Professional fees |
|
846 |
|
|
1,095 |
|
|
681 |
|
|
2,901 |
|
|
1,879 |
|
Other
operating expense |
|
2,667 |
|
|
2,951 |
|
|
1,543 |
|
|
8,258 |
|
|
5,036 |
|
Federal
Home Loan Bank prepayment fee |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
136 |
|
Amortization of core deposit intangible |
|
507 |
|
|
513 |
|
|
181 |
|
|
1,544 |
|
|
319 |
|
Branch
consolidation expenses |
|
1,455 |
|
|
5,451 |
|
|
— |
|
|
6,939 |
|
|
— |
|
Merger
related expenses |
|
1,698 |
|
|
3,155 |
|
|
1,311 |
|
|
6,300 |
|
|
9,902 |
|
Total
operating expenses |
|
30,733 |
|
|
37,133 |
|
|
25,026 |
|
|
98,824 |
|
|
70,387 |
|
Income
before provision for income taxes |
|
18,517 |
|
|
10,849 |
|
|
13,917 |
|
|
45,183 |
|
|
26,163 |
|
Provision for income
taxes |
|
5,700 |
|
|
3,170 |
|
|
4,789 |
|
|
12,669 |
|
|
9,169 |
|
Net
income |
|
$ |
12,817 |
|
|
$ |
7,679 |
|
|
$ |
9,128 |
|
|
$ |
32,514 |
|
|
$ |
16,994 |
|
Basic earnings per
share |
|
$ |
0.40 |
|
|
$ |
0.24 |
|
|
$ |
0.36 |
|
|
$ |
1.01 |
|
|
$ |
0.79 |
|
Diluted earnings per
share |
|
$ |
0.39 |
|
|
$ |
0.23 |
|
|
$ |
0.35 |
|
|
$ |
0.98 |
|
|
$ |
0.77 |
|
Average basic shares
outstanding |
|
32,184 |
|
|
32,122 |
|
|
25,435 |
|
|
32,073 |
|
|
21,624 |
|
Average diluted shares
outstanding |
|
33,106 |
|
|
33,138 |
|
|
25,889 |
|
|
33,110 |
|
|
21,990 |
|
OceanFirst Financial Corp.SELECTED
LOAN AND DEPOSIT DATA(dollars in thousands) |
|
LOANS RECEIVABLE |
|
|
At |
|
|
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
|
$ |
183,510 |
|
|
$ |
193,759 |
|
|
$ |
205,720 |
|
|
$ |
152,810 |
|
|
$ |
185,633 |
|
Commercial real estate - owner- occupied |
|
|
555,429 |
|
|
557,734 |
|
|
533,052 |
|
|
534,365 |
|
|
493,157 |
|
Commercial real estate - investor |
|
|
1,134,416 |
|
|
1,122,186 |
|
|
1,113,964 |
|
|
1,134,507 |
|
|
1,014,699 |
|
Total
commercial |
|
|
1,873,355 |
|
|
1,873,679 |
|
|
1,852,736 |
|
|
1,821,682 |
|
|
1,693,489 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
|
|
1,678,092 |
|
|
1,667,831 |
|
|
1,639,611 |
|
|
1,651,695 |
|
|
1,061,752 |
|
Residential construction |
|
|
73,812 |
|
|
78,339 |
|
|
76,985 |
|
|
65,408 |
|
|
46,813 |
|
Home
equity loans and lines |
|
|
277,909 |
|
|
282,402 |
|
|
285,149 |
|
|
289,110 |
|
|
251,421 |
|
Other
consumer |
|
|
1,426 |
|
|
1,335 |
|
|
1,560 |
|
|
1,566 |
|
|
1,273 |
|
Total
consumer |
|
|
2,031,239 |
|
|
2,029,907 |
|
|
2,003,305 |
|
|
2,007,779 |
|
|
1,361,259 |
|
Total
loans |
|
|
3,904,594 |
|
|
3,903,586 |
|
|
3,856,041 |
|
|
3,829,461 |
|
|
3,054,748 |
|
Loans in
process |
|
|
(22,546 |
) |
|
(22,589 |
) |
|
(17,976 |
) |
|
(14,249 |
) |
|
(13,842 |
) |
Deferred origination costs, net |
|
4,645 |
|
|
4,365 |
|
|
3,686 |
|
|
3,414 |
|
|
3,407 |
|
Allowance
for loan losses |
|
|
(16,584 |
) |
|
(16,557 |
) |
|
(16,151 |
) |
|
(15,183 |
) |
|
(15,617 |
) |
Loans
receivable, net |
|
|
$ |
3,870,109 |
|
|
$ |
3,868,805 |
|
|
$ |
3,825,600 |
|
|
$ |
3,803,443 |
|
|
$ |
3,028,696 |
|
Mortgage
loans serviced for others |
|
$ |
121,886 |
|
|
$ |
131,284 |
|
|
$ |
132,973 |
|
|
$ |
137,881 |
|
|
$ |
143,657 |
|
|
At September 30, 2017 Average Yield |
|
|
|
|
|
|
|
|
|
|
Loan
pipeline (1): |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
4.42 |
% |
|
$ |
58,189 |
|
|
$ |
61,287 |
|
|
$ |
73,793 |
|
|
$ |
99,060 |
|
|
$ |
64,976 |
|
Residential mortgage and construction |
3.75 |
|
|
44,510 |
|
|
64,510 |
|
|
57,600 |
|
|
38,486 |
|
|
39,252 |
|
Home
equity loans and lines |
4.67 |
|
|
8,826 |
|
|
11,194 |
|
|
7,879 |
|
|
6,522 |
|
|
5,099 |
|
Total |
4.17 |
|
|
$ |
111,525 |
|
|
$ |
136,991 |
|
|
$ |
139,272 |
|
|
$ |
144,068 |
|
|
$ |
109,327 |
|
|
For the Three Months Ended |
|
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
|
Average Yield |
|
|
|
|
|
|
|
|
|
|
|
Loan
originations: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
4.09 |
% |
|
$ |
97,420 |
|
|
$ |
115,048 |
|
(3 |
) |
$ |
106,896 |
|
|
$ |
105,062 |
|
|
$ |
63,310 |
|
|
Residential mortgage and construction |
3.72 |
|
|
80,481 |
|
|
79,610 |
|
|
64,452 |
|
|
62,087 |
|
|
41,170 |
|
|
Home
equity loans and lines |
4.58 |
|
|
17,129 |
|
|
20,539 |
|
|
12,500 |
|
|
11,790 |
|
|
11,007 |
|
|
Total |
3.98 |
|
|
$ |
195,030 |
|
|
$ |
215,197 |
|
|
$ |
183,848 |
|
|
$ |
178,939 |
|
|
$ |
115,487 |
|
|
Loans
sold |
|
|
$ |
991 |
|
(2 |
) |
$ |
865 |
|
(4 |
) |
$ |
1,907 |
|
|
$ |
12,098 |
|
(5 |
) |
$ |
17,787 |
|
(6 |
) |
(1) Loan pipeline includes pending loan
applications and loans approved but not funded |
(2) Excludes the sale of under-performing
residential loans of $3.5 million |
(3) Includes purchased loans totaling
$16.6 million |
(4) Excludes the sale of under-performing
residential loans of $4.3 million |
(5) Excludes the sale of
under-performing loans of $21.0 million |
(6) Excludes the sale of
under-performing loans of $12.8 million |
DEPOSITS |
At |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
Type
of Account |
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
$ |
781,043 |
|
|
$ |
770,057 |
|
|
$ |
806,728 |
|
|
$ |
782,504 |
|
|
$ |
512,957 |
|
Interest-bearing checking
|
1,892,832 |
|
|
1,727,828 |
|
|
1,629,589 |
|
|
1,626,713 |
|
|
1,451,083 |
|
Money
market deposit |
384,106 |
|
|
378,538 |
|
|
448,093 |
|
|
458,911 |
|
|
400,054 |
|
Savings |
668,370 |
|
|
677,939 |
|
|
681,853 |
|
|
672,519 |
|
|
489,173 |
|
Time
deposits |
623,908 |
|
|
622,547 |
|
|
632,400 |
|
|
647,103 |
|
|
471,414 |
|
|
$ |
4,350,259 |
|
|
$ |
4,176,909 |
|
|
$ |
4,198,663 |
|
|
$ |
4,187,750 |
|
|
$ |
3,324,681 |
|
OceanFirst Financial Corp.ASSET
QUALITY(dollars in thousands) |
|
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
ASSET
QUALITY |
|
|
|
|
|
|
|
|
|
Non-performing
loans: |
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
63 |
|
|
$ |
68 |
|
|
$ |
231 |
|
|
$
|
441 |
|
|
$
|
1,152 |
|
Commercial real estate - owner-occupied |
923 |
|
|
943 |
|
|
2,383 |
|
|
2,414 |
|
|
5,213 |
|
Commercial real estate - investor |
8,720 |
|
|
5,608 |
|
|
5,118 |
|
|
521 |
|
|
1,675 |
|
Residential mortgage |
3,551 |
|
|
7,936 |
|
|
11,993 |
|
|
8,126 |
|
|
7,017 |
|
Home
equity loans and lines |
1,864 |
|
|
1,706 |
|
|
1,954 |
|
|
2,064 |
|
|
1,450 |
|
Total
non-performing loans |
15,121 |
|
|
16,261 |
|
|
21,679 |
|
|
13,566 |
|
|
16,507 |
|
Other real estate
owned |
9,334 |
|
|
8,898 |
|
|
8,774 |
|
|
9,803 |
|
|
9,107 |
|
Total
non-performing assets |
$ |
24,455 |
|
|
$ |
25,159 |
|
|
$ |
30,453 |
|
|
$ |
23,369 |
|
|
$ |
25,614 |
|
Purchased
credit-impaired (“PCI”) loans |
$ |
4,867 |
|
|
$ |
4,969 |
|
|
$ |
7,118 |
|
|
$ |
7,575 |
|
|
$ |
5,836 |
|
Delinquent loans 30 to
89 days |
$ |
24,548 |
|
|
$ |
25,224 |
|
|
$ |
18,516 |
|
|
$ |
22,598 |
|
|
$ |
8,553 |
|
Troubled debt
restructurings: |
|
|
|
|
|
|
|
|
|
Non-performing (included in total non-performing loans above) |
$ |
270 |
|
|
$ |
1,251 |
|
|
$ |
3,547 |
|
|
$ |
3,471 |
|
|
$ |
3,520 |
|
Performing |
35,808 |
|
|
34,130 |
|
|
26,974 |
|
|
27,042 |
|
|
26,396 |
|
Total
troubled debt restructurings |
$ |
36,078 |
|
|
$ |
35,381 |
|
|
$ |
30,521 |
|
|
$ |
30,513 |
|
|
$ |
29,916 |
|
Allowance for loan
losses |
$ |
16,584 |
|
|
$ |
16,557 |
|
|
$ |
16,151 |
|
|
$ |
15,183 |
|
|
$ |
15,617 |
|
Allowance for loan
losses as a percent of total loans receivable (1) |
0.42 |
% |
|
0.42 |
% |
|
0.42 |
% |
|
0.40 |
% |
|
0.51 |
% |
Allowance for loan
losses as a percent of total non-performing loans |
109.68 |
|
|
101.82 |
|
|
74.50 |
|
|
111.92 |
|
|
94.61 |
|
Non-performing loans as
a percent of total loans receivable |
0.39 |
|
|
0.42 |
|
|
0.56 |
|
|
0.35 |
|
|
0.54 |
|
Non-performing assets
as a percent of total assets |
0.45 |
|
|
0.48 |
|
|
0.59 |
|
|
0.45 |
|
|
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 $19,810, $21,794, $24,002, $25,973, and $17,051, at
September 30, 2017, June 30, 2017, March 31, 2017, December 31,
2016, and September 30, 2016, respectively. |
NET CHARGE-OFFS |
|
|
For the Three Months Ended |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
Net Charge-offs: |
|
|
|
|
|
|
|
|
|
Loan
charge-offs |
$
|
(1,357 |
) |
|
$
|
(1,299 |
) |
|
$
|
(205 |
) |
|
$
|
(979 |
) |
|
$
|
(2,116 |
) |
Recoveries on loans |
219 |
|
|
540 |
|
|
473 |
|
|
35 |
|
|
167 |
|
Net loan
(charge-offs) recoveries |
$ |
(1,138 |
) |
|
$ |
(759 |
) |
|
$ |
268 |
|
|
$ |
(944 |
) |
|
$
|
(1,949 |
) |
Net loan
charge-offs to average total loans (annualized)
|
0.12 |
% |
|
0.08 |
% |
|
NM* |
|
|
0.11 |
% |
|
0.25 |
% |
Net charge-off detail -
(loss) recovery: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
68 |
|
|
$ |
(81 |
) |
|
$ |
311 |
|
|
$ |
(510 |
) |
|
$ |
(1,707 |
) |
Residential mortgage and construction |
(1,156 |
) |
|
(716 |
) |
|
(49 |
) |
|
(233 |
) |
|
(161 |
) |
Home
equity loans and lines |
(51 |
) |
|
39 |
|
|
24 |
|
|
(194 |
) |
|
(83 |
) |
Other
consumer |
1 |
|
|
(1 |
) |
|
(18 |
) |
|
(7 |
) |
|
2 |
|
Net loan
(charge-offs) recoveries |
$ |
(1,138 |
) |
|
$ |
(759 |
) |
|
$ |
268 |
|
|
$ |
(944 |
) |
|
$ |
(1,949 |
) |
Note: Included in net loan charge-offs for the three months
ended September 30, 2017, June 30, 2017, December 31, 2016 and
September 30, 2016 are $907, $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 |
|
September 30, 2017 |
|
June 30, 2017 |
|
September 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 |
$ |
183,514 |
|
|
$ |
438 |
|
|
0.95 |
% |
|
$ |
114,019 |
|
|
$ |
211 |
|
|
0.74 |
% |
|
$ |
168,045 |
|
|
$ |
139 |
|
|
0.33 |
% |
Securities (1) and FHLB
stock |
817,867 |
|
|
4,263 |
|
|
2.07 |
|
|
786,964 |
|
|
4,060 |
|
|
2.07 |
|
|
533,809 |
|
|
2,561 |
|
|
1.91 |
|
Loans receivable, net
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
1,865,970 |
|
|
22,423 |
|
|
4.77 |
|
|
1,850,737 |
|
|
22,057 |
|
|
4.78 |
|
|
1,723,520 |
|
|
20,970 |
|
|
4.84 |
|
Residential |
1,737,739 |
|
|
17,588 |
|
|
4.02 |
|
|
1,718,413 |
|
|
17,304 |
|
|
4.04 |
|
|
1,118,435 |
|
|
10,874 |
|
|
3.87 |
|
Home
Equity |
279,900 |
|
|
3,289 |
|
|
4.66 |
|
|
283,124 |
|
|
3,225 |
|
|
4.57 |
|
|
255,919 |
|
|
2,745 |
|
|
4.27 |
|
Other |
1,112 |
|
|
29 |
|
|
10.35 |
|
|
1,161 |
|
|
22 |
|
|
7.60 |
|
|
1,163 |
|
|
18 |
|
|
6.16 |
|
Allowance
for loan loss net of deferred loan fees |
(12,370 |
) |
|
— |
|
|
— |
|
|
(12,518 |
) |
|
— |
|
|
— |
|
|
(13,346 |
) |
|
— |
|
|
— |
|
Loans Receivable,
net |
3,872,351 |
|
|
43,329 |
|
|
4.44 |
|
|
3,840,917 |
|
|
42,608 |
|
|
4.45 |
|
|
3,085,691 |
|
|
34,607 |
|
|
4.46 |
|
Total interest-earning
assets |
4,873,732 |
|
|
48,030 |
|
|
3.91 |
|
|
4,741,900 |
|
|
46,879 |
|
|
3.97 |
|
|
3,787,545 |
|
|
37,307 |
|
|
3.92 |
|
Non-interest-earning
assets |
460,795 |
|
|
|
|
|
|
473,736 |
|
|
|
|
|
|
316,290 |
|
|
|
|
|
Total assets |
$ |
5,334,527 |
|
|
|
|
|
|
$ |
5,215,636 |
|
|
|
|
|
|
$ |
4,103,835 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking |
$ |
1,852,421 |
|
|
1,173 |
|
|
0.25 |
% |
|
$ |
1,716,930 |
|
|
1,038 |
|
|
0.24 |
% |
|
$ |
1,425,350 |
|
|
583 |
|
|
0.16 |
% |
Money
market |
389,035 |
|
|
299 |
|
|
0.30 |
|
|
422,439 |
|
|
281 |
|
|
0.27 |
|
|
386,490 |
|
|
295 |
|
|
0.30 |
|
Savings |
672,548 |
|
|
59 |
|
|
0.03 |
|
|
679,806 |
|
|
97 |
|
|
0.06 |
|
|
488,749 |
|
|
49 |
|
|
0.04 |
|
Time
deposits |
620,308 |
|
|
1,595 |
|
|
1.02 |
|
|
624,020 |
|
|
1,498 |
|
|
0.96 |
|
|
477,496 |
|
|
1,156 |
|
|
0.96 |
|
Total |
3,534,312 |
|
|
3,126 |
|
|
0.35 |
|
|
3,443,195 |
|
|
2,914 |
|
|
0.34 |
|
|
2,778,085 |
|
|
2,083 |
|
|
0.30 |
|
Securities sold under agreements to repurchase |
74,285 |
|
|
30 |
|
|
0.16 |
|
|
73,574 |
|
|
25 |
|
|
0.14 |
|
|
68,540 |
|
|
24 |
|
|
0.14 |
|
FHLB
Advances |
264,652 |
|
|
1,153 |
|
|
1.73 |
|
|
259,291 |
|
|
1,118 |
|
|
1.73 |
|
|
264,213 |
|
|
1,067 |
|
|
1.61 |
|
Other
borrowings |
56,502 |
|
|
665 |
|
|
4.67 |
|
|
56,456 |
|
|
648 |
|
|
4.60 |
|
|
26,207 |
|
|
198 |
|
|
3.01 |
|
Total
interest-bearing liabilities |
3,929,751 |
|
|
4,974 |
|
|
0.50 |
|
|
3,832,516 |
|
|
4,705 |
|
|
0.49 |
|
|
3,137,045 |
|
|
3,372 |
|
|
0.43 |
|
Non-interest-bearing
deposits |
781,047 |
|
|
|
|
|
|
772,739 |
|
|
|
|
|
|
521,088 |
|
|
|
|
|
Non-interest-bearing
liabilities |
32,360 |
|
|
|
|
|
|
23,260 |
|
|
|
|
|
|
31,536 |
|
|
|
|
|
Total
liabilities |
4,743,158 |
|
|
|
|
|
|
4,628,515 |
|
|
|
|
|
|
3,689,669 |
|
|
|
|
|
Stockholders’
equity |
591,369 |
|
|
|
|
|
|
587,121 |
|
|
|
|
|
|
414,166 |
|
|
|
|
|
Total
liabilities and equity |
$ |
5,334,527 |
|
|
|
|
|
|
$ |
5,215,636 |
|
|
|
|
|
|
$ |
4,103,835 |
|
|
|
|
|
Net interest
income |
|
|
$ |
43,056 |
|
|
|
|
|
|
$ |
42,174 |
|
|
|
|
|
|
$ |
33,935 |
|
|
|
Net interest rate
spread (3) |
|
|
|
|
3.41 |
% |
|
|
|
|
|
3.48 |
% |
|
|
|
|
|
3.49 |
% |
Net interest margin
(4) |
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.57 |
% |
|
|
|
|
|
3.56 |
% |
Total cost of deposits
(including non-interest-bearing deposits) |
|
|
|
|
0.29 |
% |
|
|
|
|
|
0.28 |
% |
|
|
|
|
|
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 Nine Months Ended |
|
September 30, 2017 |
|
September 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 |
$ |
180,821 |
|
|
$ |
1,058 |
|
|
0.78 |
% |
|
$ |
86,007 |
|
|
$ |
209 |
|
|
0.32 |
% |
Securities (1) and FHLB
stock |
769,932 |
|
|
12,186 |
|
|
2.12 |
|
|
517,051 |
|
|
7,149 |
|
|
1.85 |
|
Loans receivable, net
(2) |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
1,849,246 |
|
|
65,619 |
|
|
4.74 |
|
|
1,390,196 |
|
|
49,750 |
|
|
4.78 |
|
Residential |
1,720,185 |
|
|
52,231 |
|
|
4.06 |
|
|
1,009,012 |
|
|
29,139 |
|
|
3.86 |
|
Home
Equity |
283,419 |
|
|
9,760 |
|
|
4.60 |
|
|
228,172 |
|
|
7,233 |
|
|
4.23 |
|
Other |
1,180 |
|
|
69 |
|
|
7.82 |
|
|
893 |
|
|
41 |
|
|
6.13 |
|
Allowance
for loan loss net of deferred loan fees |
(12,338 |
) |
|
— |
|
|
— |
|
|
(13,379 |
) |
|
— |
|
|
— |
|
Loans Receivable,
net |
3,841,692 |
|
|
127,679 |
|
|
4.44 |
|
|
2,614,894 |
|
|
86,163 |
|
|
4.40 |
|
Total interest-earning
assets |
4,792,445 |
|
|
140,923 |
|
|
3.93 |
|
|
3,217,952 |
|
|
93,521 |
|
|
3.88 |
|
Non-interest-earning
assets |
461,752 |
|
|
|
|
|
|
236,399 |
|
|
|
|
|
Total assets |
$ |
5,254,197 |
|
|
|
|
|
|
$ |
3,454,351 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking |
$ |
1,746,601 |
|
|
3,086 |
|
|
0.24 |
% |
|
$ |
1,181,110 |
|
|
1,391 |
|
|
0.16 |
% |
Money
market |
418,681 |
|
|
891 |
|
|
0.28 |
|
|
280,836 |
|
|
546 |
|
|
0.26 |
|
Savings |
675,684 |
|
|
285 |
|
|
0.06 |
|
|
413,388 |
|
|
117 |
|
|
0.04 |
|
Time
deposits |
628,126 |
|
|
4,559 |
|
|
0.97 |
|
|
386,505 |
|
|
3,071 |
|
|
1.06 |
|
Total |
3,469,092 |
|
|
8,821 |
|
|
0.34 |
|
|
2,261,839 |
|
|
5,125 |
|
|
0.30 |
|
Securities sold under agreements to repurchase |
74,729 |
|
|
82 |
|
|
0.15 |
|
|
76,289 |
|
|
78 |
|
|
0.14 |
|
FHLB
Advances |
258,147 |
|
|
3,340 |
|
|
1.73 |
|
|
272,405 |
|
|
3,351 |
|
|
1.64 |
|
Other
borrowings |
56,450 |
|
|
1,967 |
|
|
4.66 |
|
|
23,846 |
|
|
459 |
|
|
2.57 |
|
Total
interest-bearing liabilities |
3,858,418 |
|
|
14,210 |
|
|
0.49 |
|
|
2,634,379 |
|
|
9,013 |
|
|
0.46 |
|
Non-interest-bearing
deposits |
781,608 |
|
|
|
|
|
|
448,459 |
|
|
|
|
|
Non-interest-bearing
liabilities |
28,351 |
|
|
|
|
|
|
23,650 |
|
|
|
|
|
Total
liabilities |
4,668,377 |
|
|
|
|
|
|
3,106,488 |
|
|
|
|
|
Stockholders’
equity |
585,820 |
|
|
|
|
|
|
347,863 |
|
|
|
|
|
Total
liabilities and equity |
$ |
5,254,197 |
|
|
|
|
|
|
$ |
3,454,351 |
|
|
|
|
|
Net interest
income |
|
|
$ |
126,713 |
|
|
|
|
|
|
$ |
84,508 |
|
|
|
Net interest rate
spread (3) |
|
|
|
|
3.44 |
% |
|
|
|
|
|
3.42 |
% |
Net interest margin
(4) |
|
|
|
|
3.54 |
% |
|
|
|
|
|
3.51 |
% |
Total cost of deposits
(including non-interest-bearing deposits) |
|
|
|
|
0.28 |
% |
|
|
|
|
|
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) |
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Condition Data: |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
5,383,912 |
|
|
$ |
5,202,200 |
|
|
$ |
5,196,340 |
|
|
$ |
5,167,052 |
|
|
$ |
4,151,017 |
|
Securities
available-for-sale, at estimated fair value |
|
67,133 |
|
|
62,154 |
|
|
47,104 |
|
|
12,224 |
|
|
2,497 |
|
Securities
held-to-maturity, net |
|
742,886 |
|
|
720,511 |
|
|
695,918 |
|
|
598,691 |
|
|
470,642 |
|
Federal Home Loan Bank
of New York stock |
|
18,472 |
|
|
20,358 |
|
|
19,253 |
|
|
19,313 |
|
|
18,289 |
|
Loans receivable,
net |
|
3,870,109 |
|
|
3,868,805 |
|
|
3,825,600 |
|
|
3,803,443 |
|
|
3,028,696 |
|
Deposits |
|
4,350,259 |
|
|
4,176,909 |
|
|
4,198,663 |
|
|
4,187,750 |
|
|
3,324,681 |
|
Federal Home Loan Bank
advances |
|
259,186 |
|
|
277,541 |
|
|
250,021 |
|
|
250,498 |
|
|
251,146 |
|
Securities sold under
agreements to repurchase and other borrowings
|
|
131,792 |
|
|
131,673 |
|
|
133,798 |
|
|
126,494 |
|
|
125,477 |
|
Stockholders’
equity |
|
596,252 |
|
|
587,303 |
|
|
582,680 |
|
|
572,038 |
|
|
417,244 |
|
|
|
For the Three Months Ended, |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Selected
Operating Data: |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
48,030 |
|
|
$ |
46,879 |
|
|
$ |
46,014 |
|
|
$ |
39,904 |
|
|
$ |
37,307 |
|
Interest expense |
|
4,974 |
|
|
4,705 |
|
|
4,531 |
|
|
4,150 |
|
|
3,372 |
|
Net interest
income |
|
43,056 |
|
|
42,174 |
|
|
41,483 |
|
|
35,754 |
|
|
33,935 |
|
Provision for loan
losses |
|
1,165 |
|
|
1,165 |
|
|
700 |
|
|
510 |
|
|
888 |
|
Net interest income
after provision for loan losses |
|
41,891 |
|
|
41,009 |
|
|
40,783 |
|
|
35,244 |
|
|
33,047 |
|
Other income |
|
7,359 |
|
|
6,973 |
|
|
5,995 |
|
|
6,257 |
|
|
5,896 |
|
Operating expenses |
|
27,580 |
|
|
28,527 |
|
|
29,481 |
|
|
25,833 |
|
|
23,715 |
|
Branch consolidation
expenses |
|
1,455 |
|
|
5,451 |
|
|
33 |
|
|
— |
|
|
— |
|
Merger related
expenses |
|
1,698 |
|
|
3,155 |
|
|
1,447 |
|
|
6,632 |
|
|
1,311 |
|
Income before provision
for income taxes |
|
18,517 |
|
|
10,849 |
|
|
15,817 |
|
|
9,036 |
|
|
13,917 |
|
Provision for income
taxes |
|
5,700 |
|
|
3,170 |
|
|
3,799 |
|
|
2,984 |
|
|
4,789 |
|
Net income |
|
$ |
12,817 |
|
|
$ |
7,679 |
|
|
$ |
12,018 |
|
|
$ |
6,052 |
|
|
$ |
9,128 |
|
Diluted earnings per
share |
|
$ |
0.39 |
|
|
$ |
0.23 |
|
|
$ |
0.36 |
|
|
$ |
0.22 |
|
|
$ |
0.35 |
|
Net
accretion/amortization of purchase accounting adjustments included
in net interest income |
|
$ |
2,227 |
|
|
$ |
1,899 |
|
|
$ |
2,175 |
|
|
$ |
1,385 |
|
|
$ |
1,637 |
|
|
|
At or For the Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Selected
Financial Ratios and Other Data(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Ratios (Annualized): |
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2) |
|
0.95 |
% |
|
0.59 |
% |
|
0.94 |
% |
|
0.53 |
% |
|
0.88 |
% |
Return on average
stockholders’ equity (2) |
|
8.60 |
|
|
5.25 |
|
|
8.42 |
|
|
5.10 |
|
|
8.77 |
|
Return on average
tangible stockholders’ equity (2) (3) |
|
11.74 |
|
|
7.19 |
|
|
11.50 |
|
|
6.48 |
|
|
10.58 |
|
Stockholders' equity to
total assets |
|
11.07 |
|
|
11.29 |
|
|
11.21 |
|
|
11.07 |
|
|
10.05 |
|
Tangible stockholders’
equity to tangible assets (3) |
|
8.39 |
|
|
8.51 |
|
|
8.43 |
|
|
8.30 |
|
|
8.50 |
|
Net interest rate
spread |
|
3.41 |
|
|
3.48 |
|
|
3.47 |
|
|
3.31 |
|
|
3.49 |
|
Net interest
margin |
|
3.50 |
|
|
3.57 |
|
|
3.56 |
|
|
3.40 |
|
|
3.56 |
|
Operating expenses to
average assets (2) |
|
2.29 |
|
|
2.86 |
|
|
2.41 |
|
|
2.83 |
|
|
2.43 |
|
Efficiency ratio (2)
(4) |
|
60.96 |
|
|
75.55 |
|
|
65.21 |
|
|
77.28 |
|
|
62.83 |
|
Loans to deposits |
|
88.96 |
|
|
92.62 |
|
|
91.11 |
|
|
90.82 |
|
|
91.10 |
|
|
|
For the Nine Months Ended September
30, |
|
|
2017 |
|
2016 |
Performance
Ratios (Annualized): |
|
|
|
|
Return on average
assets (2) |
|
0.83 |
% |
|
0.66 |
% |
Return on average
stockholders’ equity (2) |
|
7.42 |
|
|
6.52 |
|
Return on average
tangible stockholders’ equity (2) (3)
|
|
10.14 |
|
|
7.39 |
|
Net interest rate
spread |
|
3.44 |
|
|
3.42 |
|
Net interest
margin |
|
3.54 |
|
|
3.51 |
|
Operating expenses to
average assets (2) |
|
2.51 |
|
|
2.72 |
|
Efficiency ratio (2)
(4) |
|
67.21 |
|
|
71.34 |
|
|
|
At or For the Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Wealth
Management: |
|
|
|
|
|
|
|
|
|
|
Assets under administration |
|
$ |
225,904 |
|
|
$ |
214,479 |
|
|
$ |
215,593 |
|
|
$ |
218,336 |
|
|
$ |
221,612 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share |
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.13 |
|
Stockholders’ equity
per common share at end of period |
|
18.31 |
|
|
18.05 |
|
|
17.95 |
|
|
17.80 |
|
|
16.14 |
|
Tangible stockholders’
equity per common share at end of period (3)
|
|
13.47 |
|
|
13.19 |
|
|
13.07 |
|
|
12.95 |
|
|
13.42 |
|
Number of
full-service customer facilities: |
|
46 |
|
|
51 |
|
|
61 |
|
|
61 |
|
|
50 |
|
Quarterly Average Balances |
|
|
|
|
|
|
|
|
|
|
Total
securities |
|
$ |
817,867 |
|
|
$ |
786,964 |
|
|
$ |
703,712 |
|
|
$ |
545,302 |
|
|
$ |
533,809 |
|
Loans,
receivable, net |
|
3,872,351 |
|
|
3,840,916 |
|
|
3,811,136 |
|
|
3,282,703 |
|
|
3,085,691 |
|
Total
interest-earning assets |
|
4,873,732 |
|
|
4,741,900 |
|
|
4,729,013 |
|
|
4,187,809 |
|
|
3,787,545 |
|
Total
assets |
|
5,334,527 |
|
|
5,215,636 |
|
|
5,211,071 |
|
|
4,556,774 |
|
|
4,103,835 |
|
Interest-bearing transaction deposits |
|
2,914,004 |
|
|
2,819,175 |
|
|
2,788,452 |
|
|
2,512,351 |
|
|
2,300,589 |
|
Time
deposits |
|
620,308 |
|
|
624,020 |
|
|
640,269 |
|
|
527,817 |
|
|
477,496 |
|
Total
borrowed funds |
|
395,439 |
|
|
389,321 |
|
|
383,082 |
|
|
379,289 |
|
|
358,960 |
|
Total
interest-bearing liabilities |
|
3,929,751 |
|
|
3,832,516 |
|
|
3,811,803 |
|
|
3,419,457 |
|
|
3,137,045 |
|
Non-interest bearing deposits |
|
781,047 |
|
|
772,739 |
|
|
791,036 |
|
|
622,882 |
|
|
521,088 |
|
Stockholders’ equity |
|
591,369 |
|
|
587,121 |
|
|
578,833 |
|
|
471,662 |
|
|
414,166 |
|
Total
deposits |
|
4,315,359 |
|
|
4,215,934 |
|
|
4,219,757 |
|
|
3,663,050 |
|
|
3,299,173 |
|
Quarterly Yields |
|
|
|
|
|
|
|
|
|
|
Total
securities |
|
2.07 |
% |
|
2.07 |
% |
|
2.23 |
% |
|
1.91 |
% |
|
1.91 |
% |
Loans,
receivable, net |
|
4.44 |
|
|
4.45 |
|
|
4.44 |
|
|
4.46 |
|
|
4.46 |
|
Total
interest-earning assets |
|
3.91 |
|
|
3.97 |
|
|
3.95 |
|
|
3.79 |
|
|
3.92 |
|
Interest-bearing transaction deposits |
|
0.21 |
|
|
0.20 |
|
|
0.18 |
|
|
0.18 |
|
|
0.16 |
|
Time
deposits |
|
1.02 |
|
|
0.96 |
|
|
0.93 |
|
|
0.97 |
|
|
0.96 |
|
Total
borrowed funds |
|
1.87 |
|
|
1.85 |
|
|
1.85 |
|
|
1.84 |
|
|
1.43 |
|
Total
interest-bearing liabilities |
|
0.50 |
|
|
0.49 |
|
|
0.48 |
|
|
0.48 |
|
|
0.43 |
|
Net
interest spread |
|
3.41 |
|
|
3.48 |
|
|
3.47 |
|
|
3.31 |
|
|
3.49 |
|
Net
interest margin |
|
3.50 |
|
|
3.57 |
|
|
3.56 |
|
|
3.40 |
|
|
3.56 |
|
Total
deposits |
|
0.29 |
|
|
0.28 |
|
|
0.27 |
|
|
0.26 |
|
|
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. |
(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 |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Core earnings: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
12,817 |
|
|
$ |
7,679 |
|
|
$ |
12,018 |
|
|
$ |
6,052 |
|
|
$ |
9,128 |
|
Add: Merger
related expenses |
|
1,698 |
|
|
3,155 |
|
|
1,447 |
|
|
6,632 |
|
|
1,311 |
|
Branch
consolidation expenses |
|
1,455 |
|
|
5,451 |
|
|
33 |
|
|
— |
|
|
— |
|
Accelerated stock award expense |
|
— |
|
|
— |
|
|
242 |
|
|
— |
|
|
— |
|
Less: Income tax
benefit on items |
|
(1,084 |
) |
|
(3,012 |
) |
|
(587 |
) |
|
(2,108 |
) |
|
(172 |
) |
Core earnings |
|
$ |
14,886 |
|
|
$ |
13,273 |
|
|
$ |
13,153 |
|
|
$ |
10,576 |
|
|
$ |
10,267 |
|
Core diluted earnings
per share |
|
$ |
0.45 |
|
|
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
0.38 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
Core ratios (Annualized): |
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.11 |
% |
|
1.02 |
% |
|
1.02 |
% |
|
0.92 |
% |
|
1.00 |
% |
Return on average tangible stockholders’ equity |
|
13.63 |
|
|
12.42 |
|
|
12.56 |
|
|
11.33 |
|
|
11.90 |
|
Efficiency ratio |
|
54.71 |
|
|
58.04 |
|
|
61.58 |
|
|
61.49 |
|
|
59.54 |
|
COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE
ASSETS |
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
Total stockholders’
equity |
|
$ |
596,252 |
|
|
$ |
587,303 |
|
|
$ |
582,680 |
|
|
$ |
572,038 |
|
|
$ |
417,244 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
148,134 |
|
|
148,433 |
|
|
147,815 |
|
|
145,064 |
|
|
66,537 |
|
Core
deposit intangible |
|
9,380 |
|
|
9,887 |
|
|
10,400 |
|
|
10,924 |
|
|
3,722 |
|
Tangible stockholders’
equity |
|
$ |
438,738 |
|
|
$ |
428,983 |
|
|
$ |
424,465 |
|
|
$ |
416,050 |
|
|
$ |
346,985 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
5,383,912 |
|
|
$ |
5,202,200 |
|
|
$ |
5,196,340 |
|
|
$ |
5,167,052 |
|
|
$ |
4,151,017 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
148,134 |
|
|
148,433 |
|
|
147,815 |
|
|
145,064 |
|
|
66,537 |
|
Core
deposit intangible |
|
9,380 |
|
|
9,887 |
|
|
10,400 |
|
|
10,924 |
|
|
3,722 |
|
Tangible assets |
|
$ |
5,226,398 |
|
|
$ |
5,043,880 |
|
|
$ |
5,038,125 |
|
|
$ |
5,011,064 |
|
|
$ |
4,080,758 |
|
Tangible stockholders’
equity to tangible assets
|
|
8.39 |
% |
|
8.51 |
% |
|
8.43 |
% |
|
8.30 |
% |
|
8.50 |
% |
Company Contact:
Michael J. Fitzpatrick Chief
Financial OfficerOceanFirst Financial
Corp.Tel: (732) 240-4500, ext.
7506Fax: (732) 349-5070Email:
Mfitzpatrick@oceanfirst.com
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