TOMS RIVER, N.J., April 21, 2016 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:OCFC), (the "Company"), the holding company for OceanFirst Bank (the "Bank"), today announced that diluted earnings per share was $0.25 for the quarter ended March 31, 2016, as compared to $0.32 for the corresponding prior year quarter.
The results of operations for the quarter ended March 31, 2016 included non-recurring merger related expenses which decreased net income, net of tax benefit, by $1.2 million. Excluding this item, core earnings for the quarter ended March 31, 2016 were $5.4 million, or $0.32 per diluted share. (Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of non-recurring merger related expenses.)
Highlights for the quarter are described below.
- Commercial loans outstanding increased $23.6 million, an annualized growth rate of 9.8%. Growth was adversely affected by cyclical payoffs, however, the loan pipeline remains strong. Total loan originations for the first quarter amounted to $103.3 million.
- Deposit growth totaled $54.7 million, including $42.7 million of core deposits (all deposits except time deposits). Deposit growth includes $17.0 million of deposits acquired on March 11, 2016 through the purchase of an existing retail branch located in the Toms River market.
- On March 28, 2016 the Company received regulatory approval for the acquisition of Cape Bancorp, Inc. after the Company entered into a definitive agreement and plan of merger on January 5, 2016. Pending stockholder approvals, the Company expects to close the transaction ahead of schedule on May 2, 2016 and anticipates full integration of Cape’s 22 branches in October 2016.
Chief Executive Officer and President Christopher D. Maher commented, "The Company delivered another quarter of solid earnings, driven by net interest income that was 13.4% higher than the prior year period. Revenue growth offset the incremental investment in five new retail branches acquired or opened during the past year." Mr. Maher added; "The investment in deposit gathering capabilities has supported our strategy of funding loan growth with high quality, core deposits as deposits grew faster than loans during the first quarter."
The Company also announced that the Board of Directors declared its seventy-seventh consecutive quarterly cash dividend on common stock. The dividend for the quarter ended March 31, 2016 of $0.13 per share will be paid on May 20, 2016 to stockholders of record on May 9, 2016.
Results of Operations
On July 31, 2015, the Company completed its acquisition of Colonial American Bank ("Colonial"), which added $142.4 million to assets, $121.2 million to loans, and $123.3 million to deposits. Colonial’s results of operations are included in the consolidated results for the quarter ended March 31, 2016 but are excluded from the results of operation for the corresponding prior year period.
Net income for the quarter ended March 31, 2016 was $4.2 million, or $0.25 per diluted share, as compared to net income of $5.3 million, or $0.32 per diluted share, for the corresponding prior year period. Excluding the non-recurring merger related expenses, diluted earnings per share were equal to the prior year period as higher net interest income was offset by higher operating expenses and provision for loan losses, and lower other income. Net income for the quarter ended March 31, 2016 included a loss of $279,000 attributable to the operations of a hotel, golf and banquet facility acquired in the fourth quarter of 2015 as other real estate owned. Excluding merger related expense, diluted earnings per share decreased $0.01 from the prior linked quarter primarily due to the loss incurred operating other real estate owned.
Net interest income for the quarter ended March 31, 2016 increased to $20.6 million as compared to $18.1 million for the same prior year period, reflecting an increase in interest-earning assets and a higher net interest margin. Average interest-earning assets increased $234.3 million for the quarter as compared to the same prior year period. The current quarter was favorably impacted by the interest-earning assets acquired from Colonial, which averaged $107.9 million for the quarter ended March 31, 2016. Average loans receivable, net, increased $278.4 million for the quarter ended March 31, 2016, as compared to the same prior year period. The increase attributable to Colonial was $101.5 million for the quarter. The net interest margin increased to 3.32% for the quarter ended March 31, 2016, as compared 3.24% for the same prior year period. The yield on average interest-earning assets increased to 3.73% for the quarter ended March 31, 2016, as compared to 3.60% for the same prior year period. The yield on average interest-earning assets for the quarter ended March 31, 2016 benefited from the growth in higher-yielding average loans receivable and the reduction in lower-yielding average securities. The cost of average interest-bearing liabilities increased to 0.50% for the quarter ended March 31, 2016, as compared to 0.45% in the prior year period. In anticipation of an eventual rise in interest rates, the Company has extended its borrowed funds into higher-costing, longer-term maturities and has opportunistically grown higher-cost, longer-term certificates of deposit. Since December 31, 2013, the Bank has extended $206.9 million of short-term funding into 3-5 year maturities, extending the weighted average maturity of term borrowings from 1.3 years to 2.9 years at March 31, 2016. The total cost of deposits (including non-interest bearing deposits) was 0.26% for the quarter ended March 31, 2016, as compared to 0.21% for the prior year period.
Net interest income for the quarter ended March 31, 2016 decreased $129,000, as compared to the prior linked quarter, as the net interest margin decreased to 3.32% from 3.37%. The yield on average interest-earning assets decreased to 3.73% for the quarter ended March 31, 2016, from 3.77% for the prior linked quarter, while the cost of average interest-bearing liabilities remained at 0.50% for both periods. Loan fees, included in net interest income, declined $174,000 from the prior linked quarter.
For the quarter ended March 31, 2016, the provision for loan losses was $563,000, as compared to $375,000, for the corresponding prior year period. Net charge-offs increased to $1.1 million for the quarter ended March 31, 2016, as compared to net charge-offs of $273,000 in the corresponding prior year period and $217,000 for the quarter ended December 31, 2015. Two non-performing commercial loans accounted for $886,000 of the total net charge-off. Non-performing loans decreased by $2.1 million at March 31, 2016, as compared to December 31, 2015.
For the quarter ended March 31, 2016, other income decreased to $3.4 million, as compared to $4.0 million in the same prior year period. The decrease from the prior year quarter was primarily due to higher net losses from other real estate operations of $427,000, as compared to the prior year. The loss is predominately due to the seasonal operations of the hotel, golf and banquet facility acquired as other real estate owned in the fourth quarter of 2015. The Bank is in the process of finalizing a sale agreement with a qualified buyer with an expected mid-year closing. Fees and service charges declined $72,000 from the prior year due to the sector wide impact of the consumer shift away from deposit overdrafts. The 2015 results included a gain on sale of loan servicing of $81,000. For the quarter ended March 31, 2016, other income decreased $742,000, as compared to the prior linked quarter. The decrease was related to a higher net loss on other real estate operations of $368,000 and a reduction in fees and service charges of $265,000.
Operating expenses increased to $16.7 million, for the quarter ended March 31, 2016, as compared to $13.7 million in the same prior year period. Operating expenses for the quarter ended March 31, 2016 include $1.4 million in non-recurring merger related expenses relating to the pending acquisition of Cape. Excluding merger related expenses, the increase in operating expenses over the prior year was primarily due to the operations of Colonial, $448,000; the investment in commercial lending, $441,000; and the impact of the new branches, $331,000.
For the quarter ended March 31, 2016, operating expenses decreased $571,000, as compared to the prior linked quarter, excluding merger related expenses. The decrease was primarily due to lower equipment, marketing and data processing expenses.
The provision for income taxes was $2.5 million, for the quarter ended March 31, 2016, as compared to $2.7 million for the same prior year period. The effective tax rate was 36.8% for the quarter ended March 31, 2016 as compared to 34.3%, for the same prior year period and 34.7% in the prior linked quarter. The increases in the effective tax rate over the prior periods were primarily due to non-deductible merger related expenses.
Financial Condition
Total assets decreased by $4.6 million to $2,588.4 million at March 31, 2016, from $2,593.1 million at December 31, 2015. Loans receivable, net, increased by $26.3 million, to $1,997.0 million at March 31, 2016, from $1,970.7 million at December 31, 2015 and included the purchase of a pool of performing, locally originated, one-to-four family, non-conforming mortgage loans for $12.8 million. The increase in loans receivable, net, was partly offset by a decrease in total securities of $19.0 million. As part of the acquisition of Colonial and the Toms River branch, the Company has outstanding goodwill and core deposit intangible at March 31, 2016 of $2.1 million and $310,000, respectively.
Deposits increased by $54.7 million, to $1,971.4 million at March 31, 2016, from $1,916.7 million at December 31, 2015. Business deposits increased $23.9 million demonstrating the value of relationship based lending. The loan-to-deposit ratio at March 31, 2016 was 101.3%, as compared to 102.8% at December 31, 2015. The deposit growth partly funded a decrease in FHLB advances of $72.5 million, to $251.9 million at March 31, 2016, from $324.4 million at December 31, 2015.
Stockholders' equity increased to $241.1 million at March 31, 2016, as compared to $238.4 million at December 31, 2015. At March 31, 2016, there were 244,804 shares available for repurchase under the stock repurchase program adopted in July of 2014. Tangible stockholders’ equity per common share was $13.75 at March 31, 2016, as compared to $13.67 at December 31, 2015.
Asset Quality
The Company's non-performing loans totaled $16.2 million at March 31, 2016, compared to $18.3 million at December 31, 2015 and $19.4 million at March 31, 2015. Non-performing loans do not include $376,000 of purchased credit impaired ("PCI") loans acquired from Colonial. The Company’s other real estate owned totaled $9.0 million at March 31, 2016, as compared to $8.8 million at December 31, 2015. The amount includes $7.0 million relating to the hotel, golf and banquet facility located in New Jersey which the Company acquired in the fourth quarter of 2015. At March 31, 2016, the Company’s allowance for loan losses was 0.80% of total loans, a decrease from 0.84% at December 31, 2015. These ratios exclude an allowance on the Colonial loans which were acquired at fair value. The allowance for loan losses as a percent of total non-performing loans was 100.13% at March 31, 2016 as compared to 91.51% at December 31, 2015.
Conference Call
As previously announced, the Company will host an earnings conference call on Friday, April 22, 2016 at 11:00 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 10083319 from one hour after the end of the call until July 21, 2016. 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 community bank with $2.6 billion in assets and 28 branches located in Ocean, Monmouth and Middlesex Counties, New Jersey. The Bank delivers commercial and residential financing solutions, wealth management, and deposit services throughout the central New Jersey region and is the largest and oldest financial institution headquartered in Ocean County, 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 and accounting principles and guidelines. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 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) | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2016 | 2015 | 2015 | |||||||||||
| ASSETS | (unaudited) | (unaudited) | |||||||||||
| Cash and due from banks | $ | 34,261 | $ | 43,946 | $ | 34,792 | |||||||
| Securities available-for-sale, at estimated fair value | 30,085 | 29,902 | 30,019 | ||||||||||
| Securities held-to-maturity, net (estimated fair value of $378,613 at March 31, 2016, $397,763 at December 31, 2015, and $449,955 at March 31, 2015, respectively) | 375,616 | 394,813 | 442,829 | ||||||||||
| Federal Home Loan Bank of New York stock, at cost | 16,645 | 19,978 | 16,728 | ||||||||||
| Loans receivable, net | 1,996,993 | 1,970,703 | 1,736,825 | ||||||||||
| Mortgage loans held for sale | 3,386 | 2,697 | 6,020 | ||||||||||
| Interest and dividends receivable | 6,036 | 5,860 | 5,474 | ||||||||||
| Other real estate owned | 9,029 | 8,827 | 3,835 | ||||||||||
| Premises and equipment, net | 28,322 | 28,419 | 24,868 | ||||||||||
| Servicing asset | 544 | 589 | 548 | ||||||||||
| Bank Owned Life Insurance | 57,868 | 57,549 | 56,494 | ||||||||||
| Deferred tax asset | 16,786 | 17,016 | 15,372 | ||||||||||
| Other assets | 10,485 | 10,691 | 10,337 | ||||||||||
| Core deposit intangible | 310 | 256 | — | ||||||||||
| Goodwill | 2,081 | 1,822 | — | ||||||||||
| Total assets | $ | 2,588,447 | $ | 2,593,068 | $ | 2,384,141 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Deposits | $ | 1,971,360 | $ | 1,916,678 | $ | 1,800,926 | |||||||
| Securities sold under agreements to repurchase with retail customers | 83,913 | 75,872 | 65,879 | ||||||||||
| Federal Home Loan Bank advances | 251,917 | 324,385 | 251,778 | ||||||||||
| Other borrowings | 22,500 | 22,500 | 27,500 | ||||||||||
| Due to brokers | — | — | 1,124 | ||||||||||
| Advances by borrowers for taxes and insurance | 7,271 | 7,121 | 7,485 | ||||||||||
| Other liabilities | 10,410 | 8,066 | 9,147 | ||||||||||
| Total liabilities | 2,347,371 | 2,354,622 | 2,163,839 | ||||||||||
| 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 17,358,005, 17,286,557, and 16,863,429, shares outstanding at March 31, 2016, December 31, 2015, and March 31, 2015, respectively | 336 | 336 | 336 | ||||||||||
| Additional paid-in capital | 271,003 | 269,757 | 266,824 | ||||||||||
| Retained earnings | 231,016 | 229,140 | 220,677 | ||||||||||
| Accumulated other comprehensive loss | (5,923 | ) | (6,241 | ) | (6,788 | ) | |||||||
| Less: Unallocated common stock held by | |||||||||||||
| Employee Stock Ownership Plan | (2,974 | ) | (3,045 | ) | (3,259 | ) | |||||||
| Treasury stock, 16,208,767, 16,280,215, and 16,703,343 shares at March 31, 2016, December 31, 2015, and March 31, 2015, respectively | (252,382 | ) | (251,501 | ) | (257,488 | ) | |||||||
| Common stock acquired by Deferred Compensation Plan | (305 | ) | (314 | ) | (307 | ) | |||||||
| Deferred Compensation Plan Liability | 305 | 314 | 307 | ||||||||||
| Total stockholders' equity | 241,076 | 238,446 | 220,302 | ||||||||||
| Total liabilities and stockholders' equity | $ | 2,588,447 | $ | 2,593,068 | $ | 2,384,141 | |||||||
| OceanFirst Financial Corp. | ||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| For the Three Months Ended, | ||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2016 | 2015 | 2015 | ||||||||||||
| ------------------------(unaudited)------------------------ | ||||||||||||||
| Interest income: | ||||||||||||||
| Loans | $ | 21,035 | $ | 21,143 | $ | 18,029 | ||||||||
| Mortgage-backed securities | 1,415 | 1,449 | 1,623 | |||||||||||
| Investment securities and other | 623 | 557 | 517 | |||||||||||
| Total interest income | 23,073 | 23,149 | 20,169 | |||||||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,271 | 1,217 | 955 | |||||||||||
| Borrowed funds | 1,243 | 1,244 | 1,081 | |||||||||||
| Total interest expense | 2,514 | 2,461 | 2,036 | |||||||||||
| Net interest income | 20,559 | 20,688 | 18,133 | |||||||||||
| Provision for loan losses | 563 | 300 | 375 | |||||||||||
| Net interest income after provision for loan losses | 19,996 | 20,388 | 17,758 | |||||||||||
| Other income: | ||||||||||||||
| Bankcard services revenue | 851 | 926 | 783 | |||||||||||
| Wealth management revenue | 550 | 530 | 528 | |||||||||||
| Fees and service charges | 1,817 | 2,082 | 1,889 | |||||||||||
| Loan servicing income | 56 | 82 | 52 | |||||||||||
| Net gain on sale of loan servicing | — | — | 81 | |||||||||||
| Net gain on sales of loans available for sale | 179 | 185 | 193 | |||||||||||
| Net loss from other real estate operations | (406 | ) | (38 | ) | 21 | |||||||||
| Income from Bank Owned Life Insurance | 319 | 343 | 446 | |||||||||||
| Other | 10 | 8 | (7 | ) | ||||||||||
| Total other income | 3,376 | 4,118 | 3,986 | |||||||||||
| Operating expenses: | ||||||||||||||
| Compensation and employee benefits | 8,466 | 8,438 | 7,539 | |||||||||||
| Occupancy | 1,626 | 1,518 | 1,454 | |||||||||||
| Equipment | 969 | 1,162 | 798 | |||||||||||
| Marketing | 251 | 428 | 274 | |||||||||||
| Federal deposit insurance | 529 | 528 | 498 | |||||||||||
| Data processing | 1,265 | 1,349 | 1,088 | |||||||||||
| Check card processing | 420 | 427 | 475 | |||||||||||
| Professional fees | 498 | 541 | 395 | |||||||||||
| Other operating expense | 1,277 | 1,481 | 1,167 | |||||||||||
| Amortization of core deposit intangible | 13 | 13 | — | |||||||||||
| Merger related expense | 1,402 | 614 | 50 | |||||||||||
| Total operating expenses | 16,716 | 16,499 | 13,738 | |||||||||||
| Income before provision for income taxes | 6,656 | 8,007 | 8,006 | |||||||||||
| Provision for income taxes | 2,451 | 2,777 | 2,744 | |||||||||||
| Net income | $ | 4,205 | $ | 5,230 | $ | 5,262 | ||||||||
| Basic earnings per share | $ | 0.25 | $ | 0.31 | $ | 0.32 | ||||||||
| Diluted earnings per share | $ | 0.25 | $ | 0.31 | $ | 0.32 | ||||||||
| Average basic shares outstanding | 16,906 | 16,867 | 16,476 | |||||||||||
| Average diluted shares outstanding | 17,118 | 17,126 | 16,637 | |||||||||||
| OceanFirst Financial Corp. | |||||||||||||||||||||||||||
| SELECTED LOAN AND DEPOSIT DATA | |||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||
| LOANS RECEIVABLE | |||||||||||||||||||||||||||
| March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||
| Commercial and industrial | $ | 141,364 | $ | 144,788 | $ | 129,379 | $ | 111,229 | $ | 107,476 | |||||||||||||||||
| Commercial real estate – owner-occupied | 308,666 | 307,509 | 317,438 | 281,178 | 274,924 | ||||||||||||||||||||||
| Commercial real estate – investor | 536,754 | 510,936 | 486,625 | 417,108 | 392,846 | ||||||||||||||||||||||
| Total commercial | 986,784 | 963,233 | 933,442 | 809,515 | 775,246 | ||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||
| Residential mortgage | 796,139 | 793,946 | 789,517 | 749,416 | 752,329 | ||||||||||||||||||||||
| Residential construction | 54,259 | 50,757 | 51,580 | 52,428 | 48,891 | ||||||||||||||||||||||
| Home equity loans and lines | 190,621 | 192,368 | 193,587 | 191,708 | 195,843 | ||||||||||||||||||||||
| Other consumer | 570 | 792 | 719 | 643 | 534 | ||||||||||||||||||||||
| Total consumer | 1,041,589 | 1,037,863 | 1,035,403 | 994,195 | 997,597 | ||||||||||||||||||||||
| Total loans | 2,028,373 | 2,001,096 | 1,968,845 | 1,803,710 | 1,772,843 | ||||||||||||||||||||||
| Loans in process | (15,033 | ) | (14,206 | ) | (14,145 | ) | (16,073 | ) | (16,790 | ) | |||||||||||||||||
| Deferred origination costs, net | 3,253 | 3,232 | 3,216 | 3,230 | 3,211 | ||||||||||||||||||||||
| Allowance for loan losses | (16,214 | ) | (16,722 | ) | (16,638 | ) | (16,534 | ) | (16,419 | ) | |||||||||||||||||
| Total loans, net | 2,000,379 | 1,973,400 | 1,941,278 | 1,774,333 | 1,742,845 | ||||||||||||||||||||||
| Less: mortgage loans held for sale | 3,386 | 2,697 | 2,306 | 1,454 | 6,020 | ||||||||||||||||||||||
| Loans receivable, net | $ | 1,996,993 | $ | 1,970,703 | $ | 1,938,972 | $ | 1,772,879 | $ | 1,736,825 | |||||||||||||||||
| Mortgage loans serviced for others | $ | 152,653 | $ | 158,244 | $ | 164,488 | $ | 173,090 | $ | 193,084 | |||||||||||||||||
| Loan pipeline: | Average Yield | ||||||||||||||||||||||||||
| Commercial | 4.30 | % | $ | 57,571 | $ | 53,785 | $ | 71,944 | $ | 58,613 | $ | 43,786 | |||||||||||||||
| Residential mortgage and construction | 3.68 | 28,528 | 31,860 | 39,894 | 26,854 | 36,222 | |||||||||||||||||||||
| Home equity loans and lines | 4.46 | 8,082 | 5,481 | 8,859 | 8,059 | 9,333 | |||||||||||||||||||||
| Total | 4.13 | $ | 94,181 | $ | 91,126 | $ | 120,697 | $ | 93,526 | $ | 89,341 | ||||||||||||||||
| For the Three Months Ended, | ||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||||
| Loan originations: | ||||||||||||||||||||||
| Commercial | 4.18 | % | $ | 58,005 | $ | 72,534 | $ | 70,378 | $ | 52,037 | $ | 69,436 | ||||||||||
| Residential mortgage and construction | 3.92 | 34,361 | 43,616 | 35,994 | 47,261 | 45,912 | ||||||||||||||||
| Home equity loans and lines | 4.43 | 10,915 | 10,431 | 13,841 | 13,259 | 11,063 | ||||||||||||||||
| Total | 4.12 | $ | 103,281 | $ | 126,581 | $ | 120,213 | $ | 112,557 | $ | 126,411 | |||||||||||
| Loans sold | $ | 8,901 | $ | 9,784 | $ | 11,063 | $ | 16,788 | $ | 10,979 | ||||||||||||
| DEPOSITS | |||||||||||||||||||
| March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
| Type of Account | |||||||||||||||||||
| Non-interest-bearing | $ | 351,743 | $ | 337,143 | $ | 362,079 | $ | 328,175 | $ | 308,036 | |||||||||
| Interest-bearing checking | 860,468 | 859,927 | 883,940 | 794,310 | 864,398 | ||||||||||||||
| Money market deposit | 163,885 | 153,196 | 151,657 | 123,017 | 107,937 | ||||||||||||||
| Savings | 327,845 | 310,989 | 310,009 | 306,079 | 306,291 | ||||||||||||||
| Time deposits | 267,420 | 255,423 | 260,086 | 210,094 | 214,264 | ||||||||||||||
| $ | 1,971,361 | $ | 1,916,678 | $ | 1,967,771 | $ | 1,761,675 | $ | 1,800,926 | ||||||||||
| OceanFirst Financial Corp. | |||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
| ASSET QUALITY | |||||||||||||||||||
| Non-performing loans: | |||||||||||||||||||
| Commercial and industrial | $ | 909 | $ | 123 | $ | 115 | $ | 115 | $ | 117 | |||||||||
| Commercial real estate – owner-occupied | 4,354 | 7,684 | 15,666 | 13,139 | 11,704 | ||||||||||||||
| Commercial real estate – investor | 940 | 3,112 | 1,391 | 1,462 | 1,476 | ||||||||||||||
| Residential mortgage | 8,788 | 5,779 | 5,481 | 4,288 | 3,969 | ||||||||||||||
| Home equity loans and lines | 1,202 | 1,574 | 1,738 | 1,899 | 2,140 | ||||||||||||||
| Other consumer | — | 2 | 3 | 2 | — | ||||||||||||||
| Total non-performing loans | 16,193 | 18,274 | 24,394 | 20,905 | 19,406 | ||||||||||||||
| Other real estate owned | 9,029 | 8,827 | 3,262 | 3,357 | 3,835 | ||||||||||||||
| Total non-performing assets | $ | 25,222 | $ | 27,101 | $ | 27,656 | $ | 24,262 | $ | 23,241 | |||||||||
| Purchased credit impaired ("PCI") loans | $ | 376 | $ | 461 | $ | 1,019 | $ | — | $ | — | |||||||||
| Delinquent loans 30 to 89 days | $ | 6,996 | $ | 9,087 | $ | 8,025 | $ | 7,258 | $ | 14,903 | |||||||||
| Troubled debt restructurings: | |||||||||||||||||||
| Non-performing (included in total non-performing loans above) | $ | 4,775 | $ | 4,918 | $ | 3,819 | $ | 3,832 | $ | 3,153 | |||||||||
| Performing | 26,689 | 26,344 | 26,935 | 27,618 | 22,674 | ||||||||||||||
| Total troubled debt restructurings | $ | 31,464 | $ | 31,262 | $ | 30,754 | $ | 31,450 | $ | 25,827 | |||||||||
| Allowance for loan losses | $ | 16,214 | $ | 16,722 | $ | 16,638 | $ | 16,534 | $ | 16,419 | |||||||||
| Allowance for loan losses as a percent of total loans receivable | 0.80 | % | 0.84 | % | 0.85 | % | 0.92 | % | 0.93 | % | |||||||||
| Allowance for loan losses as a percent of total non-performing loans | 100.13 | 91.51 | 68.21 | 79.09 | 84.61 | ||||||||||||||
| Non-performing loans as a percent of total loans receivable | 0.80 | 0.91 | 1.24 | 1.16 | 1.09 | ||||||||||||||
| Non-performing assets as a percent of total assets | 0.97 | 1.05 | 1.08 | 1.01 | 0.97 | ||||||||||||||
| NET CHARGE-OFFS | |||||||||||||||||||
| For the quarter ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Net Charge-offs: | |||||||||||||||||||
| Loan charge-offs | $ | (1,172 | ) | $ | (236 | ) | $ | (210 | ) | $ | (331 | ) | $ | (358 | ) | ||||
| Recoveries on loans | 101 | 19 | 14 | 146 | 85 | ||||||||||||||
| Net loan charge-offs | $ | (1,071 | ) | $ | (217 | ) | $ | (196 | ) | $ | (185 | ) | $ | (273 | ) | ||||
| Net loan charge-offs to average total loans (annualized) | 0.21 | % | 0.04 | % | 0.04 | % | 0.04 | % | 0.06 | % | |||||||||
| Net charge-off detail - (loss) recovery: | |||||||||||||||||||
| Commercial | $ | (1,073 | ) | $ | 12 | $ | (47 | ) | $ | (3 | ) | $ | (86 | ) | |||||
| Residential mortgage and construction | (24 | ) | (117 | ) | (51 | ) | 11 | (10 | ) | ||||||||||
| Home equity loans and lines | 28 | (109 | ) | (98 | ) | (192 | ) | (173 | ) | ||||||||||
| Other consumer | (2 | ) | (3 | ) | — | (1 | ) | (4 | ) | ||||||||||
| Net loans charged-off | $ | (1,071 | ) | $ | (217 | ) | $ | (196 | ) | $ | (185 | ) | $ | (273 | ) | ||||
| OceanFirst Financial Corp. | ||||||||||||||||||||||||||||||||||||||||
| ANALYSIS OF NET INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED, | ||||||||||||||||||||||||||||||||||||||||
| MARCH 31, 2016 | DECEMBER 31, 2015 | MARCH 31, 2015 | ||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCE | INTEREST | AVERAGE YIELD/ COST | AVERAGE BALANCE | INTEREST | AVERAGE YIELD/ COST | AVERAGE BALANCE | INTEREST | AVERAGE YIELD/ COST | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits and short-term investments | $ | 48,501 | $ | 28 | 0.23 | % | $ | 41,227 | $ | 16 | 0.16 | % | $ | 28,249 | $ | 5 | 0.07 | % | ||||||||||||||||||||||
| Securities (1) and FHLB stock | 445,696 | 2,010 | 1.80 | 456,486 | 1,990 | 1.74 | 509,998 | 2,135 | 1.67 | |||||||||||||||||||||||||||||||
| Loans receivable, net (2): | ||||||||||||||||||||||||||||||||||||||||
| Commercial | 972,050 | 10,998 | 4.53 | 943,116 | 11,154 | 4.73 | 740,463 | 8,299 | 4.48 | |||||||||||||||||||||||||||||||
| Residential | 830,840 | 8,039 | 3.87 | 836,722 | 7,953 | 3.80 | 778,483 | 7,731 | 3.97 | |||||||||||||||||||||||||||||||
| Home equity | 191,355 | 1,990 | 4.16 | 193,314 | 2,028 | 4.20 | 196,530 | 1,991 | 4.05 | |||||||||||||||||||||||||||||||
| Other | 501 | 8 | 6.39 | 544 | 8 | 5.88 | 432 | 8 | 7.41 | |||||||||||||||||||||||||||||||
| Allowance for loan loss net of deferred loan fees | (13,645 | ) | — | — | (13,597 | ) | — | — | (13,188 | ) | — | — | ||||||||||||||||||||||||||||
| Total loans | 1,981,101 | 21,035 | 4.25 | 1,960,099 | 21,143 | 4.31 | 1,702,720 | 18,029 | 4.24 | |||||||||||||||||||||||||||||||
| Total interest-earning assets | 2,475,298 | 23,073 | 3.73 | 2,457,812 | 23,149 | 3.77 | 2,240,967 | 20,169 | 3.60 | |||||||||||||||||||||||||||||||
| Non-interest-earning assets | 129,719 | 129,297 | 111,904 | |||||||||||||||||||||||||||||||||||||
| Total assets | $ | 2,605,017 | $ | 2,587,109 | $ | 2,352,871 | ||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking | $ | 899,883 | 305 | 0.14 | $ | 909,962 | 279 | 0.12 | $ | 874,126 | 196 | 0.09 | ||||||||||||||||||||||||||||
| Money market | 156,326 | 70 | 0.18 | 152,416 | 76 | 0.20 | 101,255 | 20 | 0.08 | |||||||||||||||||||||||||||||||
| Savings | 316,148 | 26 | 0.03 | 309,037 | 27 | 0.03 | 303,397 | 24 | 0.03 | |||||||||||||||||||||||||||||||
| Time deposits | 263,722 | 870 | 1.32 | 256,378 | 836 | 1.30 | 205,575 | 715 | 1.39 | |||||||||||||||||||||||||||||||
| Total | 1,636,079 | 1,271 | 0.31 | 1,627,793 | 1,218 | 0.30 | 1,484,353 | 955 | 0.26 | |||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 83,506 | 28 | 0.13 | 78,892 | 29 | 0.15 | 66,641 | 21 | 0.13 | |||||||||||||||||||||||||||||||
| FHLB advances | 266,234 | 1,084 | 1.63 | 252,812 | 1,040 | 1.65 | 242,437 | 861 | 1.42 | |||||||||||||||||||||||||||||||
| Other borrowings | 22,500 | 131 | 2.33 | 25,467 | 174 | 2.73 | 27,500 | 199 | 2.89 | |||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 2,008,319 | 2,514 | 0.50 | 1,984,964 | 2,461 | 0.50 | 1,820,931 | 2,036 | 0.45 | |||||||||||||||||||||||||||||||
| Non-interest-bearing deposits | 343,371 | 349,473 | 297,453 | |||||||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities | 13,328 | 16,174 | 14,694 | |||||||||||||||||||||||||||||||||||||
| Total liabilities | 2,365,018 | 2,350,611 | 2,133,078 | |||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 239,999 | 236,498 | 219,793 | |||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,605,017 | $ | 2,587,109 | $ | 2,352,871 | ||||||||||||||||||||||||||||||||||
| Net interest income | $ | 20,559 | $ | 20,688 | $ | 18,133 | ||||||||||||||||||||||||||||||||||
| Net interest rate spread (3) | 3.23 | % | 3.27 | % | 3.15 | % | ||||||||||||||||||||||||||||||||||
| Net interest margin (4) | 3.32 | % | 3.37 | % | 3.24 | % | ||||||||||||||||||||||||||||||||||
| Total cost of deposits (including non-interest bearing deposits) | 0.26 | % | 0.25 | % | 0.21 | % | ||||||||||||||||||||||||||||||||||
(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) | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Selected Financial Condition Data: | ||||||||||||||||||||
| Total assets | $ | 2,588,447 | $ | 2,593,068 | $ | 2,557,898 | $ | 2,395,100 | $ | 2,384,141 | ||||||||||
| Securities available-for-sale, at estimated fair value | 30,085 | 29,902 | 30,108 | 30,030 | 30,019 | |||||||||||||||
| Securities held-to-maturity, net | 375,616 | 394,813 | 392,932 | 414,625 | 442,829 | |||||||||||||||
| Federal Home Loan Bank of New York stock | 16,645 | 19,978 | 15,970 | 18,740 | 16,728 | |||||||||||||||
| Loans receivable, net | 1,996,993 | 1,970,703 | 1,938,972 | 1,772,879 | 1,736,825 | |||||||||||||||
| Mortgage loans held-for-sale | 3,386 | 2,697 | 2,306 | 1,454 | 6,020 | |||||||||||||||
| Deposits | 1,971,360 | 1,916,678 | 1,967,771 | 1,761,675 | 1,800,926 | |||||||||||||||
| Federal Home Loan Bank advances | 251,917 | 324,385 | 233,006 | 295,616 | 251,778 | |||||||||||||||
| Securities sold under agreements to repurchase and other borrowings | 106,413 | 98,372 | 105,493 | 99,187 | 93,379 | |||||||||||||||
| Stockholders' equity | 241,076 | 238,446 | 234,688 | 221,535 | 220,302 | |||||||||||||||
| For the quarter ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Interest income | $ | 23,073 | $ | 23,149 | $ | 21,970 | $ | 20,576 | $ | 20,169 | ||||||||||
| Interest expense | 2,514 | 2,461 | 2,395 | 2,143 | 2,036 | |||||||||||||||
| Net interest income | 20,559 | 20,688 | 19,575 | 18,433 | 18,133 | |||||||||||||||
| Provision for loan losses | 563 | 300 | 300 | 300 | 375 | |||||||||||||||
| Net interest income after provision for loan losses | 19,996 | 20,388 | 19,275 | 18,133 | 17,758 | |||||||||||||||
| Other income | 3,376 | 4,118 | 4,152 | 4,171 | 3,986 | |||||||||||||||
| Operating expenses | 15,314 | 15,885 | 15,117 | 14,208 | 13,688 | |||||||||||||||
| Merger related expenses | 1,402 | 614 | 1,030 | 184 | 50 | |||||||||||||||
| Income before provision for income taxes | 6,656 | 8,007 | 7,280 | 7,912 | 8,006 | |||||||||||||||
| Provision for income taxes | 2,451 | 2,777 | 2,582 | 2,779 | 2,744 | |||||||||||||||
| Net income | $ | 4,205 | $ | 5,230 | $ | 4,698 | $ | 5,133 | $ | 5,262 | ||||||||||
| Diluted earnings per share | $ | 0.25 | $ | 0.31 | $ | 0.28 | $ | 0.31 | $ | 0.32 | ||||||||||
| At or For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Selected Financial Ratios and Other Data(1): | |||||||||||||||||||
| Performance Ratios (Annualized): | |||||||||||||||||||
| Return on average assets (2) | 0.65 | % | 0.81 | % | 0.75 | % | 0.86 | % | 0.89 | % | |||||||||
| Return on average stockholders' equity (2) | 7.01 | 8.85 | 8.02 | 9.29 | 9.58 | ||||||||||||||
| Return on average tangible stockholders' equity (2)(3) | 7.07 | 8.93 | 8.07 | 9.29 | 9.58 | ||||||||||||||
| Stockholders' equity to total assets | 9.31 | 9.19 | 9.18 | 9.25 | 9.24 | ||||||||||||||
| Tangible stockholders' equity to tangible assets (3) | 9.23 | 9.12 | 9.10 | 9.25 | 9.24 | ||||||||||||||
| Net interest rate spread | 3.23 | 3.27 | 3.16 | 3.15 | 3.15 | ||||||||||||||
| Net interest margin | 3.32 | 3.37 | 3.26 | 3.23 | 3.24 | ||||||||||||||
| Operating expenses to average assets (2) | 2.57 | 2.55 | 2.56 | 2.40 | 2.34 | ||||||||||||||
| Efficiency ratio (2) (4) | 69.84 | 66.51 | 68.05 | 63.67 | 62.11 | ||||||||||||||
| Wealth Management: | |||||||||||||||||||
| Assets under administration (000’s) | $ | 203,723 | $ | 229,039 | $ | 205,087 | $ | 216,533 | $ | 217,831 | |||||||||
| Per Share Data: | |||||||||||||||||||
| Cash dividends per common share | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.13 | |||||||||
| Stockholders' equity per common share at end of period | 13.89 | 13.79 | 13.58 | 13.25 | 13.06 | ||||||||||||||
| Tangible stockholders' equity per common share at end of period (3) | 13.75 | 13.67 | 13.46 | 13.25 | 13.06 | ||||||||||||||
| Number of full-service customer facilities: | 28 | 27 | 27 | 24 | 23 | ||||||||||||||
| For the quarter ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Quarterly Average Balances | |||||||||||||||||||
| Total securities | $ | 445,696 | $ | 456,486 | $ | 468,707 | $ | 490,760 | $ | 509,998 | |||||||||
| Loans, receivable, net | 1,981,101 | 1,960,099 | 1,875,458 | 1,762,995 | 1,702,720 | ||||||||||||||
| Total interest-earning assets | 2,475,298 | 2,457,812 | 2,399,212 | 2,282,391 | 2,240,967 | ||||||||||||||
| Total assets | 2,605,017 | 2,587,109 | 2,521,481 | 2,394,836 | 2,352,871 | ||||||||||||||
| Transaction deposits | 1,372,357 | 1,371,415 | 1,319,106 | 1,273,717 | 1,278,778 | ||||||||||||||
| Time deposits | 263,722 | 256,378 | 244,325 | 212,160 | 205,575 | ||||||||||||||
| Total borrowed funds | 372,240 | 357,171 | 355,639 | 365,804 | 336,578 | ||||||||||||||
| Total interest-bearing liabilities | 2,008,319 | 1,984,964 | 1,919,070 | 1,851,681 | 1,820,931 | ||||||||||||||
| Non-interest bearing deposits | 343,371 | 349,473 | 354,411 | 307,528 | 297,453 | ||||||||||||||
| Stockholder’s equity | 239,999 | 236,498 | 234,173 | 220,920 | 219,793 | ||||||||||||||
| Total deposits | 1,979,450 | 1,977,266 | 1,917,842 | 1,793,405 | 1,781,806 | ||||||||||||||
| Quarterly Yields | |||||||||||||||||||
| Total securities | 1.80 | % | 1.74 | % | 1.69 | % | 1.65 | % | 1.67 | % | |||||||||
| Loans, receivable, net | 4.25 | 4.31 | 4.26 | 4.21 | 4.24 | ||||||||||||||
| Total interest-earning assets | 3.73 | 3.77 | 3.66 | 3.61 | 3.60 | ||||||||||||||
| Transaction deposits | 0.12 | 0.11 | 0.12 | 0.07 | 0.08 | ||||||||||||||
| Time deposits | 1.32 | 1.30 | 1.28 | 1.37 | 1.39 | ||||||||||||||
| Borrowed funds | 1.34 | 1.39 | 1.39 | 1.29 | 1.28 | ||||||||||||||
| Total interest-bearing liabilities | 0.50 | 0.50 | 0.50 | 0.46 | 0.45 | ||||||||||||||
| Net interest spread | 3.23 | 3.27 | 3.16 | 3.15 | 3.15 | ||||||||||||||
| Net interest margin | 3.32 | 3.37 | 3.26 | 3.23 | 3.24 | ||||||||||||||
| Total deposits | 0.26 | 0.25 | 0.24 | 0.22 | 0.21 | ||||||||||||||
(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Performance ratios for each period include non-recurring merger related expenses. Refer to Other Items – Non-GAAP Reconciliation for impact of merger related expenses.
(3) Tangible stockholder’s 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 | |||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||
| NON-GAAP RECONCILIATION | |||||||||||||||||||
| For the quarter ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Core earnings: | |||||||||||||||||||
| Net income | $ | 4,205 | $ | 5,230 | $ | 4,698 | $ | 5,133 | $ | 5,262 | |||||||||
| Add: Non-core merger related expenses | 1,402 | 614 | 1,030 | 184 | 50 | ||||||||||||||
| Less: Income tax benefit on non-core expenses | (171 | ) | (173 | ) | (316 | ) | (33 | ) | (13 | ) | |||||||||
| Core earnings | $ | 5,436 | $ | 5,671 | $ | 5,412 | $ | 5,284 | $ | 5,299 | |||||||||
| Core diluted earnings per share | $ | 0.32 | $ | 0.33 | $ | 0.32 | $ | 0.32 | $ | 0.32 | |||||||||
| COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS | |||||||||||||||||||
| March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
| Total stockholder’s equity | $ | 241,076 | $ | 238,446 | $ | 234,688 | $ | 221,535 | $ | 220,302 | |||||||||
| Less: | |||||||||||||||||||
| Goodwill | 2,081 | 1,822 | 1,845 | — | — | ||||||||||||||
| Core deposit intangible | 310 | 256 | 269 | — | — | ||||||||||||||
| Tangible stockholders’ equity | $ | 238,685 | $ | 236,368 | $ | 232,574 | $ | 221,535 | $ | 220,302 | |||||||||
| Total Assets | $ | 2,588,447 | $ | 2,593,068 | $ | 2,557,898 | $ | 2,395,100 | $ | 2,384,141 | |||||||||
| Less: | |||||||||||||||||||
| Goodwill | 2,081 | 1,822 | 1,845 | — | — | ||||||||||||||
| Core deposit intangible | 310 | 256 | 269 | — | — | ||||||||||||||
| Tangible assets | $ | 2,586,056 | $ | 2,590,990 | $ | 2,555,784 | $ | 2,395,100 | $ | 2,384,141 | |||||||||
| Tangible stockholders’ equity to tangible assets | 9.23 | % | 9.12 | % | 9.10 | % | 9.25 | % | 9.24 | % | |||||||||
| Net accretion/amortization of purchase accounting | |||||||||||||||||||
| adjustments included in net interest income | $ | 164 | $ | 177 | $ | 140 | $ | — | $ | — | |||||||||