(State or other jurisdiction of incorporation or organization) | (Commission File No.) | (IRS Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading symbol | Name of each exchange in which registered | ||
ITEM 2.02 | RESULTS OF OPERATION AND FINANCIAL CONDITION |
ITEM 8.01 | OTHER EVENTS |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) | EXHIBITS | |
99.1 | Press Release dated | October 24, 2019 |
OCEANFIRST FINANCIAL CORP. | ||
Dated: | /s/ Michael J. Fitzpatrick | |
Michael J. Fitzpatrick | ||
Executive Vice President and Chief Financial Officer |
Exhibit | Description | ||
Press release dated | October 24, 2019 |
Press Release |
• | Loan and deposit growth were both strong. Record loan originations of $482.2 million provided total loan growth of $138.2 million with a solid pipeline of $319.7 million at September 30, 2019. Deposits increased $33.4 million while the cost of deposits was 0.62%, unchanged from the prior linked quarter. |
• | The efficiency ratio improved to 57.9% from 68.1% in the prior linked quarter and the core efficiency ratio improved to 53.6% from 56.3% in the prior linked quarter, as the Company begins to realize the cost savings related to the integration of Capital Bank of New Jersey (“Capital Bank”). |
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Assets | ||||||||||||||||
Cash and due from banks | $ | 140,901 | $ | 148,327 | $ | 120,792 | $ | 148,362 | ||||||||
Debt securities available-for-sale, at estimated fair value | 127,308 | 123,610 | 100,717 | 100,015 | ||||||||||||
Debt securities held-to-maturity, net (estimated fair value of $826,964 at September 30, 2019, $869,167 at June 30, 2019, $832,815 at December 31, 2018, and $864,173 at September 30, 2018) | 819,253 | 863,838 | 846,810 | 883,540 | ||||||||||||
Equity investments, at estimated fair value | 10,145 | 10,002 | 9,655 | 9,519 | ||||||||||||
Restricted equity investments, at cost | 62,095 | 59,425 | 56,784 | 57,143 | ||||||||||||
Loans receivable, net | 6,081,938 | 5,943,930 | 5,579,222 | 5,543,959 | ||||||||||||
Loans held-for-sale | 110 | — | — | 732 | ||||||||||||
Interest and dividends receivable | 21,739 | 22,106 | 19,689 | 20,822 | ||||||||||||
Other real estate owned | 294 | 865 | 1,381 | 6,231 | ||||||||||||
Premises and equipment, net | 103,721 | 105,853 | 111,209 | 112,320 | ||||||||||||
Bank Owned Life Insurance | 236,190 | 235,162 | 222,482 | 221,190 | ||||||||||||
Deferred tax asset | 66,148 | 66,259 | 63,377 | 59,052 | ||||||||||||
Assets held for sale | 5,156 | 4,198 | 4,522 | 7,552 | ||||||||||||
Other assets | 69,033 | 53,276 | 24,101 | 36,094 | ||||||||||||
Core deposit intangible | 16,605 | 17,614 | 16,971 | 17,954 | ||||||||||||
Goodwill | 374,537 | 374,592 | 338,442 | 338,104 | ||||||||||||
Total assets | $ | 8,135,173 | $ | 8,029,057 | $ | 7,516,154 | $ | 7,562,589 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Deposits | $ | 6,220,855 | $ | 6,187,487 | $ | 5,814,569 | $ | 5,854,250 | ||||||||
Federal Home Loan Bank advances | 512,149 | 453,646 | 449,383 | 456,806 | ||||||||||||
Securities sold under agreements to repurchase with retail customers | 65,067 | 62,086 | 61,760 | 61,044 | ||||||||||||
Other borrowings | 96,667 | 96,533 | 99,530 | 99,473 | ||||||||||||
Advances by borrowers for taxes and insurance | 16,230 | 14,817 | 14,066 | 16,654 | ||||||||||||
Other liabilities | 79,677 | 77,193 | 37,488 | 44,518 | ||||||||||||
Total liabilities | 6,990,645 | 6,891,762 | 6,476,796 | 6,532,745 | ||||||||||||
Total stockholders’ equity | 1,144,528 | 1,137,295 | 1,039,358 | 1,029,844 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 8,135,173 | $ | 8,029,057 | $ | 7,516,154 | $ | 7,562,589 |
For the Three Months Ended, | For the Nine Months Ended, | |||||||||||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||||||
|-------------------- (Unaudited) --------------------| | |---------- (Unaudited) -----------| | |||||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 69,715 | $ | 70,917 | $ | 64,497 | $ | 209,633 | $ | 184,229 | ||||||||||
Mortgage-backed securities | 3,761 | 3,946 | 4,105 | 11,748 | 12,087 | |||||||||||||||
Debt securities, equity investments and other | 3,411 | 3,547 | 2,780 | 10,338 | 7,980 | |||||||||||||||
Total interest income | 76,887 | 78,410 | 71,382 | 231,719 | 204,296 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 9,817 | 9,762 | 5,799 | 28,218 | 15,510 | |||||||||||||||
Borrowed funds | 3,678 | 3,811 | 4,079 | 10,884 | 10,125 | |||||||||||||||
Total interest expense | 13,495 | 13,573 | 9,878 | 39,102 | 25,635 | |||||||||||||||
Net interest income | 63,392 | 64,837 | 61,504 | 192,617 | 178,661 | |||||||||||||||
Provision for loan losses | 305 | 356 | 907 | 1,281 | 2,984 | |||||||||||||||
Net interest income after provision for loan losses | 63,087 | 64,481 | 60,597 | 191,336 | 175,677 | |||||||||||||||
Other income: | ||||||||||||||||||||
Bankcard services revenue | 2,658 | 2,679 | 2,425 | 7,622 | 6,717 | |||||||||||||||
Trust and asset management revenue | 557 | 569 | 573 | 1,624 | 1,721 | |||||||||||||||
Fees and service charges | 4,679 | 4,595 | 4,735 | 13,790 | 14,551 | |||||||||||||||
Net gain on sales of loans | — | 7 | 31 | 15 | 654 | |||||||||||||||
Net unrealized gain (loss) on equity investments | 89 | 133 | (70 | ) | 330 | (282 | ) | |||||||||||||
Net loss from other real estate operations | (108 | ) | (121 | ) | (1,582 | ) | (235 | ) | (2,975 | ) | ||||||||||
Income from Bank Owned Life Insurance | 1,431 | 1,293 | 1,337 | 4,045 | 3,813 | |||||||||||||||
Other | 2,237 | 724 | 836 | 3,743 | 1,880 | |||||||||||||||
Total other income | 11,543 | 9,879 | 8,285 | 30,934 | 26,079 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Compensation and employee benefits | 21,276 | 23,704 | 19,694 | 67,394 | 64,189 | |||||||||||||||
Occupancy | 4,159 | 4,399 | 4,443 | 13,088 | 13,582 | |||||||||||||||
Equipment | 2,062 | 1,936 | 2,067 | 5,944 | 6,004 | |||||||||||||||
Marketing | 562 | 1,137 | 1,021 | 2,629 | 2,475 | |||||||||||||||
Federal deposit insurance and regulatory assessments | 297 | 802 | 927 | 1,931 | 2,857 | |||||||||||||||
Data processing | 3,398 | 3,684 | 3,125 | 10,736 | 9,968 | |||||||||||||||
Check card processing | 1,639 | 1,322 | 799 | 4,399 | 2,904 | |||||||||||||||
Professional fees | 2,580 | 1,408 | 1,066 | 5,697 | 3,746 | |||||||||||||||
Other operating expense | 3,902 | 3,882 | 3,366 | 11,153 | 9,928 | |||||||||||||||
Amortization of core deposit intangible | 1,009 | 1,015 | 995 | 3,029 | 2,828 | |||||||||||||||
Branch consolidation expense | 1,696 | 6,695 | 1,368 | 8,782 | 2,911 | |||||||||||||||
Merger related expenses | 777 | 931 | 662 | 6,761 | 25,863 | |||||||||||||||
Total operating expenses | 43,357 | 50,915 | 39,533 | 141,543 | 147,255 | |||||||||||||||
Income before provision for income taxes | 31,273 | 23,445 | 29,349 | 80,727 | 54,501 | |||||||||||||||
Provision for income taxes | 6,302 | 4,465 | 5,278 | 15,603 | 9,301 | |||||||||||||||
Net income | $ | 24,971 | $ | 18,980 | $ | 24,071 | $ | 65,124 | $ | 45,200 | ||||||||||
Basic earnings per share | $ | 0.50 | $ | 0.37 | $ | 0.50 | $ | 1.30 | $ | 0.97 | ||||||||||
Diluted earnings per share | $ | 0.49 | $ | 0.37 | $ | 0.50 | $ | 1.28 | $ | 0.95 | ||||||||||
Average basic shares outstanding | 50,491 | 50,687 | 47,685 | 50,242 | 46,451 | |||||||||||||||
Average diluted shares outstanding | 50,966 | 51,290 | 48,572 | 50,830 | 47,403 |
LOANS RECEIVABLE | At | |||||||||||||||||||||
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||
Commercial: | ||||||||||||||||||||||
Commercial and industrial | $ | 406,580 | $ | 392,336 | $ | 383,686 | $ | 304,996 | $ | 343,121 | ||||||||||||
Commercial real estate - owner - occupied | 787,752 | 771,640 | 802,229 | 740,893 | 735,289 | |||||||||||||||||
Commercial real estate - investor | 2,232,159 | 2,143,093 | 2,161,451 | 2,023,131 | 2,019,859 | |||||||||||||||||
Total commercial | 3,426,491 | 3,307,069 | 3,347,366 | 3,069,020 | 3,098,269 | |||||||||||||||||
Consumer: | ||||||||||||||||||||||
Residential real estate | 2,234,361 | 2,193,829 | 2,162,668 | 2,044,523 | 2,020,155 | |||||||||||||||||
Home equity loans and lines | 330,446 | 341,972 | 351,303 | 353,609 | 359,094 | |||||||||||||||||
Other consumer | 98,835 | 109,015 | 116,838 | 121,561 | 74,555 | |||||||||||||||||
Total consumer | 2,663,642 | 2,644,816 | 2,630,809 | 2,519,693 | 2,453,804 | |||||||||||||||||
Total loans | 6,090,133 | 5,951,885 | 5,978,175 | 5,588,713 | 5,552,073 | |||||||||||||||||
Deferred origination costs, net | 8,441 | 8,180 | 7,360 | 7,086 | 8,707 | |||||||||||||||||
Allowance for loan losses | (16,636 | ) | (16,135 | ) | (16,705 | ) | (16,577 | ) | (16,821 | ) | ||||||||||||
Loans receivable, net | $ | 6,081,938 | $ | 5,943,930 | $ | 5,968,830 | $ | 5,579,222 | $ | 5,543,959 | ||||||||||||
Mortgage loans serviced for others | $ | 54,457 | $ | 90,882 | $ | 92,274 | $ | 95,100 | $ | 106,369 | ||||||||||||
At September 30, 2019 Average Yield | ||||||||||||||||||||||
Loan pipeline (1): | ||||||||||||||||||||||
Commercial | 4.70 | % | $ | 126,578 | $ | 212,712 | $ | 122,325 | $ | 129,839 | $ | 137,519 | ||||||||||
Residential real estate | 3.45 | 189,403 | 82,555 | 63,598 | 49,800 | 64,841 | ||||||||||||||||
Home equity loans and lines | 5.53 | 3,757 | 2,550 | 4,688 | 6,571 | 11,030 | ||||||||||||||||
Total | 3.97 | % | $ | 319,738 | $ | 297,817 | $ | 190,611 | $ | 186,210 | $ | 213,390 |
For the Three Months Ended | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | |||||||||||||||||||
Average Yield | |||||||||||||||||||||||
Loan originations: | |||||||||||||||||||||||
Commercial | 4.08 | % | $ | 315,405 | $ | 123,882 | $ | 172,233 | $ | 151,851 | $ | 136,764 | |||||||||||
Residential real estate | 3.57 | 156,308 | 120,771 | 75,530 | 92,776 | 124,419 | |||||||||||||||||
Home equity loans and lines | 5.37 | 10,498 | 14,256 | 13,072 | 15,583 | 17,892 | |||||||||||||||||
Total | 3.94 | % | $ | 482,211 | $ | 258,909 | $ | 260,835 | (2) | $ | 260,210 | (3) | $ | 279,075 | (4) | ||||||||
Loans sold | $ | — | (5) | $ | 403 | (5) | $ | 495 | $ | 728 | (5) | $ | 1,349 | (5) |
(1) | Loan pipeline includes pending loan applications and loans approved but not funded. |
(2) | Excludes purchased loans of $100.0 million for residential real estate. |
(3) | Excludes purchased loans of $49.5 million for other consumer and $753,000 for residential real estate. |
(4) | Excludes purchased loans of $25.0 million for other consumer. |
(5) | Excludes the sale of small business administration loans of $3.5 million, under-performing residential loans of $2.9 million, under-performing commercial loans of $1.7 million and under-performing residential loans of $5.1 million for the three months ended September 30, 2019, June 30, 2019, December 31, 2018, and September 30, 2018, respectively. |
DEPOSITS | At | ||||||||||||||||||
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | |||||||||||||||
Type of Account | |||||||||||||||||||
Non-interest-bearing | $ | 1,406,194 | $ | 1,370,167 | $ | 1,352,520 | $ | 1,151,362 | $ | 1,196,875 | |||||||||
Interest-bearing checking | 2,400,331 | 2,342,913 | 2,400,192 | 2,350,106 | 2,332,215 | ||||||||||||||
Money market deposit | 593,457 | 642,985 | 666,067 | 569,680 | 584,250 | ||||||||||||||
Savings | 901,168 | 909,501 | 922,113 | 877,177 | 887,799 | ||||||||||||||
Time deposits | 919,705 | 921,921 | 949,593 | 866,244 | 853,111 | ||||||||||||||
$ | 6,220,855 | $ | 6,187,487 | $ | 6,290,485 | $ | 5,814,569 | $ | 5,854,250 |
ASSET QUALITY | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||
Non-performing loans: | |||||||||||||||||||
Commercial and industrial | $ | 207 | $ | 207 | $ | 240 | $ | 1,587 | $ | 1,727 | |||||||||
Commercial real estate - owner-occupied | 4,537 | 4,818 | 4,565 | 501 | 511 | ||||||||||||||
Commercial real estate - investor | 4,073 | 4,050 | 4,115 | 5,024 | 8,082 | ||||||||||||||
Residential real estate | 5,953 | 5,747 | 8,611 | 7,389 | 6,390 | ||||||||||||||
Home equity loans and lines | 2,683 | 2,974 | 3,364 | 2,914 | 2,529 | ||||||||||||||
Total non-performing loans | 17,453 | 17,796 | 20,895 | 17,415 | 19,239 | ||||||||||||||
Other real estate owned | 294 | 865 | 1,594 | 1,381 | 6,231 | ||||||||||||||
Total non-performing assets | $ | 17,747 | $ | 18,661 | $ | 22,489 | $ | 18,796 | $ | 25,470 | |||||||||
Purchased credit-impaired (“PCI”) loans | $ | 13,281 | $ | 13,432 | $ | 16,306 | $ | 8,901 | $ | 9,700 | |||||||||
Delinquent loans 30 to 89 days | $ | 19,905 | $ | 20,029 | $ | 21,578 | $ | 25,686 | $ | 26,691 | |||||||||
Troubled debt restructurings: | |||||||||||||||||||
Non-performing (included in total non-performing loans above) | $ | 6,152 | $ | 6,815 | $ | 6,484 | $ | 3,595 | $ | 3,568 | |||||||||
Performing | 18,977 | 19,314 | 19,690 | 22,877 | 24,230 | ||||||||||||||
Total troubled debt restructurings | $ | 25,129 | $ | 26,129 | $ | 26,174 | $ | 26,472 | $ | 27,798 | |||||||||
Allowance for loan losses | $ | 16,636 | $ | 16,135 | $ | 16,705 | $ | 16,577 | $ | 16,821 | |||||||||
Allowance for loan losses as a percent of total loans receivable (1) | 0.27 | % | 0.27 | % | 0.28 | % | 0.30 | % | 0.30 | % | |||||||||
Allowance for loan losses as a percent of total non-performing loans | 95.32 | 90.67 | 79.95 | 95.19 | 87.43 | ||||||||||||||
Non-performing loans as a percent of total loans receivable | 0.29 | 0.30 | 0.35 | 0.31 | 0.35 | ||||||||||||||
Non-performing assets as a percent of total assets | 0.22 | 0.23 | 0.28 | 0.25 | 0.34 |
(1) | The loans acquired from Capital Bank, Sun, 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 $32,768, $36,026, $35,204, $31,647, and $34,357 at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, respectively. |
NET CHARGE-OFFS | For the Three Months Ended | |||||||||||||||||||
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||
Net Charge-offs: | ||||||||||||||||||||
Loan charge-offs | $ | (353 | ) | $ | (1,138 | ) | $ | (868 | ) | $ | (1,133 | ) | $ | (891 | ) | |||||
Recoveries on loans | 549 | 212 | 376 | 383 | 114 | |||||||||||||||
Net loan recoveries (charge-offs) | $ | 196 | $ | (926 | ) | (1) | $ | (492 | ) | $ | (750 | ) | (1) | $ | (777 | ) | (1) | |||
Net loan charge-offs to average total loans (annualized) | NM* | 0.06 | % | 0.03 | % | 0.05 | % | 0.06 | % | |||||||||||
Net charge-off detail - (loss) recovery: | ||||||||||||||||||||
Commercial | $ | 256 | $ | (58 | ) | $ | (58 | ) | $ | (871 | ) | $ | (246 | ) | ||||||
Residential real estate | 12 | (728 | ) | (425 | ) | 210 | (478 | ) | ||||||||||||
Home equity loans and lines | (10 | ) | (121 | ) | (4 | ) | (62 | ) | (35 | ) | ||||||||||
Other consumer | (62 | ) | (19 | ) | (5 | ) | (27 | ) | (18 | ) | ||||||||||
Net loan recoveries (charge-offs) | $ | 196 | $ | (926 | ) | (1) | $ | (492 | ) | $ | (750 | ) | (1) | $ | (777 | ) | (1) |
(1) | Included in net loan charge-offs for the three months ended June 30 2019, December 31, 2018 and September 30, 2018 are $429, $243 and $430, respectively, relating to under-performing loans sold. |
For the Three Months Ended | ||||||||||||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | ||||||||||||||||||||||||||||||
(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 | $ | 40,932 | $ | 264 | 2.56 | % | $ | 67,214 | $ | 372 | 2.22 | % | $ | 37,354 | $ | 172 | 1.83 | % | ||||||||||||||
Securities (1) | 1,039,560 | 6,908 | 2.64 | 1,080,690 | 7,121 | 2.64 | 1,080,784 | 6,713 | 2.46 | |||||||||||||||||||||||
Loans receivable, net (2) | ||||||||||||||||||||||||||||||||
Commercial | 3,350,868 | 42,104 | 4.99 | 3,309,869 | 42,579 | 5.16 | 3,101,665 | 38,726 | 4.95 | |||||||||||||||||||||||
Residential | 2,225,837 | 21,527 | 3.87 | 2,187,417 | 22,329 | 4.08 | 2,027,880 | 20,438 | 4.03 | |||||||||||||||||||||||
Home Equity | 335,691 | 4,678 | 5.53 | 347,028 | 4,656 | 5.38 | 361,127 | 4,628 | 5.08 | |||||||||||||||||||||||
Other | 104,310 | 1,406 | 5.35 | 113,153 | 1,353 | 4.80 | 52,764 | 705 | 5.30 | |||||||||||||||||||||||
Allowance for loan loss net of deferred loan fees | (8,381 | ) | — | — | (9,155 | ) | — | — | (9,350 | ) | — | — | ||||||||||||||||||||
Loans Receivable, net | 6,008,325 | 69,715 | 4.60 | 5,948,312 | 70,917 | 4.78 | 5,534,086 | 64,497 | 4.62 | |||||||||||||||||||||||
Total interest-earning assets | 7,088,817 | 76,887 | 4.30 | 7,096,216 | 78,410 | 4.43 | 6,652,224 | 71,382 | 4.26 | |||||||||||||||||||||||
Non-interest-earning assets | 984,421 | 972,683 | 916,406 | |||||||||||||||||||||||||||||
Total assets | $ | 8,073,238 | $ | 8,068,899 | $ | 7,568,630 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 2,467,879 | 4,311 | 0.69 | % | $ | 2,504,541 | 4,240 | 0.68 | % | $ | 2,300,270 | 2,313 | 0.40 | % | |||||||||||||||||
Money market | 597,896 | 1,208 | 0.80 | 631,297 | 1,358 | 0.86 | 578,446 | 680 | 0.47 | |||||||||||||||||||||||
Savings | 905,605 | 300 | 0.13 | 915,701 | 301 | 0.13 | 896,682 | 265 | 0.12 | |||||||||||||||||||||||
Time deposits | 920,032 | 3,998 | 1.72 | 934,470 | 3,863 | 1.66 | 864,264 | 2,541 | 1.17 | |||||||||||||||||||||||
Total | 4,891,412 | 9,817 | 0.80 | 4,986,009 | 9,762 | 0.79 | 4,639,662 | 5,799 | 0.50 | |||||||||||||||||||||||
FHLB Advances | 394,124 | 2,208 | 2.22 | 404,951 | 2,320 | 2.30 | 475,536 | 2,542 | 2.12 | |||||||||||||||||||||||
Securities sold under agreements to repurchase | 62,296 | 73 | 0.46 | 62,243 | 64 | 0.41 | 61,336 | 41 | 0.27 | |||||||||||||||||||||||
Other borrowings | 96,578 | 1,397 | 5.74 | 99,591 | 1,427 | 5.75 | 99,438 | 1,496 | 5.97 | |||||||||||||||||||||||
Total interest-bearing liabilities | 5,444,410 | 13,495 | 0.98 | 5,552,794 | 13,573 | 0.98 | 5,275,972 | 9,878 | 0.74 | |||||||||||||||||||||||
Non-interest-bearing deposits | 1,396,259 | 1,302,147 | 1,210,650 | |||||||||||||||||||||||||||||
Non-interest-bearing liabilities | 88,868 | 82,793 | 61,272 | |||||||||||||||||||||||||||||
Total liabilities | 6,929,537 | 6,937,734 | 6,547,894 | |||||||||||||||||||||||||||||
Stockholders’ equity | 1,143,701 | 1,131,165 | 1,020,736 | |||||||||||||||||||||||||||||
Total liabilities and equity | $ | 8,073,238 | $ | 8,068,899 | $ | 7,568,630 | ||||||||||||||||||||||||||
Net interest income | $ | 63,392 | $ | 64,837 | $ | 61,504 | ||||||||||||||||||||||||||
Net interest rate spread (3) | 3.32 | % | 3.45 | % | 3.52 | % | ||||||||||||||||||||||||||
Net interest margin (4) | 3.55 | % | 3.66 | % | 3.67 | % | ||||||||||||||||||||||||||
Total cost of deposits (including non-interest-bearing deposits) | 0.62 | % | 0.62 | % | 0.39 | % |
For the Nine Months Ended | |||||||||||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||||||||||
(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 | $ | 62,543 | $ | 1,103 | 2.36 | % | $ | 48,562 | $ | 660 | 1.82 | % | |||||||||
Securities (1) | 1,062,366 | 20,983 | 2.64 | 1,085,725 | 19,407 | 2.39 | |||||||||||||||
Loans receivable, net (2) | |||||||||||||||||||||
Commercial | 3,291,189 | 126,091 | 5.12 | 2,995,847 | 110,920 | 4.95 | |||||||||||||||
Residential | 2,169,611 | 65,260 | 4.01 | 1,941,594 | 59,117 | 4.06 | |||||||||||||||
Home Equity | 345,294 | 14,041 | 5.44 | 357,490 | 13,335 | 4.99 | |||||||||||||||
Other | 112,162 | 4,241 | 5.06 | 20,796 | 857 | 5.51 | |||||||||||||||
Allowance for loan loss net of deferred loan fees | (9,200 | ) | — | — | (10,233 | ) | — | — | |||||||||||||
Loans Receivable, net | 5,909,056 | 209,633 | 4.74 | 5,305,494 | 184,229 | 4.64 | |||||||||||||||
Total interest-earning assets | 7,033,965 | 231,719 | 4.40 | 6,439,781 | 204,296 | 4.24 | |||||||||||||||
Non-interest-earning assets | 960,709 | 877,642 | |||||||||||||||||||
Total assets | $ | 7,994,674 | $ | 7,317,423 | |||||||||||||||||
Liabilities and Stockholders’ Equity: | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing checking | $ | 2,501,660 | 12,343 | 0.66 | % | $ | 2,313,012 | 6,099 | 0.35 | % | |||||||||||
Money market | 610,153 | 3,676 | 0.81 | 567,575 | 1,924 | 0.45 | |||||||||||||||
Savings | 908,457 | 887 | 0.13 | 876,695 | 727 | 0.11 | |||||||||||||||
Time deposits | 928,903 | 11,312 | 1.63 | 862,555 | 6,760 | 1.05 | |||||||||||||||
Total | 4,949,173 | 28,218 | 0.76 | 4,619,837 | 15,510 | 0.45 | |||||||||||||||
FHLB Advances | 379,786 | 6,367 | 2.24 | 391,956 | 5,954 | 2.03 | |||||||||||||||
Securities sold under agreements to repurchase | 63,267 | 192 | 0.41 | 68,173 | 125 | 0.25 | |||||||||||||||
Other borrowings | 98,562 | 4,325 | 5.87 | 93,046 | 4,046 | 5.81 | |||||||||||||||
Total interest-bearing liabilities | 5,490,788 | 39,102 | 0.95 | 5,173,012 | 25,635 | 0.66 | |||||||||||||||
Non-interest-bearing deposits | 1,303,447 | 1,121,695 | |||||||||||||||||||
Non-interest-bearing liabilities | 75,988 | 55,881 | |||||||||||||||||||
Total liabilities | 6,870,223 | 6,350,588 | |||||||||||||||||||
Stockholders’ equity | 1,124,451 | 966,835 | |||||||||||||||||||
Total liabilities and equity | $ | 7,994,674 | $ | 7,317,423 | |||||||||||||||||
Net interest income | $ | 192,617 | $ | 178,661 | |||||||||||||||||
Net interest rate spread (3) | 3.45 | % | 3.58 | % | |||||||||||||||||
Net interest margin (4) | 3.66 | % | 3.71 | % | |||||||||||||||||
Total cost of deposits (including non-interest-bearing deposits) | 0.60 | % | 0.36 | % |
(1) | Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and 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. |
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Selected Financial Condition Data: | ||||||||||||||||||||
Total assets | $ | 8,135,173 | $ | 8,029,057 | $ | 8,092,948 | $ | 7,516,154 | $ | 7,562,589 | ||||||||||
Debt securities available-for-sale, at estimated fair value | 127,308 | 123,610 | 122,558 | 100,717 | 100,015 | |||||||||||||||
Debt securities held-to-maturity, net | 819,253 | 863,838 | 900,614 | 846,810 | 883,540 | |||||||||||||||
Equity investments, at estimated fair value | 10,145 | 10,002 | 9,816 | 9,655 | 9,519 | |||||||||||||||
Restricted equity investments, at cost | 62,095 | 59,425 | 55,663 | 56,784 | 57,143 | |||||||||||||||
Loans receivable, net | 6,081,938 | 5,943,930 | 5,968,830 | 5,579,222 | 5,543,959 | |||||||||||||||
Deposits | 6,220,855 | 6,187,487 | 6,290,485 | 5,814,569 | 5,854,250 | |||||||||||||||
Federal Home Loan Bank advances | 512,149 | 453,646 | 418,016 | 449,383 | 456,806 | |||||||||||||||
Securities sold under agreements to repurchase and other borrowings | 161,734 | 158,619 | 165,753 | 161,290 | 160,517 | |||||||||||||||
Stockholders’ equity | 1,144,528 | 1,137,295 | 1,127,163 | 1,039,358 | 1,029,844 |
For the Three Months Ended, | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Selected Operating Data: | ||||||||||||||||||||
Interest income | $ | 76,887 | $ | 78,410 | $ | 76,422 | $ | 72,358 | $ | 71,382 | ||||||||||
Interest expense | 13,495 | 13,573 | 12,034 | 10,517 | 9,878 | |||||||||||||||
Net interest income | 63,392 | 64,837 | 64,388 | 61,841 | 61,504 | |||||||||||||||
Provision for loan losses | 305 | 356 | 620 | 506 | 907 | |||||||||||||||
Net interest income after provision for loan losses | 63,087 | 64,481 | 63,768 | 61,335 | 60,597 | |||||||||||||||
Other income | 11,543 | 9,879 | 9,512 | 8,748 | 8,285 | |||||||||||||||
Operating expenses | 40,884 | 43,289 | 41,827 | 37,794 | 37,503 | |||||||||||||||
Branch consolidation expense | 1,696 | 6,695 | 391 | 240 | 1,368 | |||||||||||||||
Merger related expenses | 777 | 931 | 5,053 | 1,048 | 662 | |||||||||||||||
Income before provision for income taxes | 31,273 | 23,445 | 26,009 | 31,001 | 29,349 | |||||||||||||||
Provision for income taxes | 6,302 | 4,465 | 4,836 | 4,269 | 5,278 | |||||||||||||||
Net income | $ | 24,971 | $ | 18,980 | $ | 21,173 | $ | 26,732 | $ | 24,071 | ||||||||||
Diluted earnings per share | $ | 0.49 | $ | 0.37 | $ | 0.42 | $ | 0.55 | $ | 0.50 | ||||||||||
Net accretion/amortization of purchase accounting adjustments included in net interest income | $ | 2,769 | $ | 3,663 | $ | 4,027 | $ | 3,918 | $ | 4,036 |
At or For the Three Months Ended | |||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | |||||||||||
Selected Financial Ratios and Other Data(1): | |||||||||||||||
Performance Ratios (Annualized): | |||||||||||||||
Return on average assets (2) | 1.23 | % | 0.94 | % | 1.10 | % | 1.41 | % | 1.26 | % | |||||
Return on average stockholders’ equity (2) | 8.66 | 6.73 | 7.82 | 10.24 | 9.36 | ||||||||||
Return on average tangible stockholders’ equity (2) (3) | 13.18 | 10.32 | 11.97 | 15.60 | 14.39 | ||||||||||
Stockholders’ equity to total assets | 14.07 | 14.16 | 13.93 | 13.83 | 13.62 | ||||||||||
Tangible stockholders’ equity to tangible assets (3) | 9.73 | 9.76 | 9.53 | 9.55 | 9.35 | ||||||||||
Net interest rate spread | 3.32 | 3.45 | 3.59 | 3.54 | 3.52 | ||||||||||
Net interest margin | 3.55 | 3.66 | 3.78 | 3.71 | 3.67 | ||||||||||
Operating expenses to average assets (2) | 2.13 | 2.53 | 2.45 | 2.07 | 2.07 | ||||||||||
Efficiency ratio (2) (4) | 57.86 | 68.14 | 63.97 | 55.37 | 56.65 | ||||||||||
Loans to deposits | 97.77 | 96.06 | 94.89 | 95.95 | 94.70 |
For the Nine Months Ended September 30, | ||||||
2019 | 2018 | |||||
Performance Ratios (Annualized): | ||||||
Return on average assets (2) | 1.09 | % | 0.83 | % | ||
Return on average stockholders’ equity (2) | 7.74 | 6.25 | ||||
Return on average tangible stockholders’ equity (2) (3) | 11.83 | 9.56 | ||||
Net interest rate spread | 3.45 | 3.58 | ||||
Net interest margin | 3.66 | 3.71 | ||||
Operating expenses to average assets (2) | 2.37 | 2.69 | ||||
Efficiency ratio (2) (4) | 63.32 | 71.92 |
At or For the Three Months Ended | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Trust and Asset Management: | ||||||||||||||||||||
Wealth assets under administration | $ | 194,137 | $ | 199,554 | $ | 200,130 | $ | 184,476 | $ | 209,796 | ||||||||||
Nest Egg | 23,946 | 9,755 | 4,052 | — | — | |||||||||||||||
Per Share Data: | ||||||||||||||||||||
Cash dividends per common share | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.15 | ||||||||||
Stockholders’ equity per common share at end of period | 22.57 | 22.24 | 22.00 | 21.68 | 21.29 | |||||||||||||||
Tangible stockholders’ equity per common share at end of period (3) | 14.86 | 14.57 | 14.32 | 14.26 | 13.93 | |||||||||||||||
Common shares outstanding at end of period | 50,700,586 | 51,131,804 | 51,233,944 | 47,951,168 | 48,382,370 | |||||||||||||||
Number of full-service customer facilities: | 56 | 60 | 63 | 59 | 59 | |||||||||||||||
Quarterly Average Balances | ||||||||||||||||||||
Total securities | $ | 1,039,560 | $ | 1,080,690 | $ | 1,067,150 | $ | 1,037,039 | $ | 1,080,784 | ||||||||||
Loans, receivable, net | 6,008,325 | 5,948,312 | 5,767,887 | 5,523,745 | 5,534,086 | |||||||||||||||
Total interest-earning assets | 7,088,817 | 7,096,216 | 6,914,948 | 6,613,807 | 6,652,224 | |||||||||||||||
Total assets | 8,073,238 | 8,068,899 | 7,839,316 | 7,504,111 | 7,568,630 | |||||||||||||||
Interest-bearing transaction deposits | 3,971,380 | 4,051,539 | 4,036,584 | 3,871,134 | 3,775,398 | |||||||||||||||
Time deposits | 920,032 | 934,470 | 932,341 | 848,361 | 864,264 | |||||||||||||||
Total borrowed funds | 552,998 | 566,785 | 504,498 | 514,628 | 636,310 | |||||||||||||||
Total interest-bearing liabilities | 5,444,410 | 5,552,794 | 5,473,423 | 5,234,123 | 5,275,972 | |||||||||||||||
Non-interest bearing deposits | 1,396,259 | 1,302,147 | 1,211,934 | 1,177,321 | 1,210,650 | |||||||||||||||
Stockholders’ equity | 1,143,701 | 1,131,165 | 1,097,984 | 1,035,962 | 1,020,736 | |||||||||||||||
Total deposits | 6,287,671 | 6,288,156 | 6,180,859 | 5,896,816 | 5,850,312 | |||||||||||||||
Quarterly Yields | ||||||||||||||||||||
Total securities | 2.64 | % | 2.64 | % | 2.64 | % | 2.60 | % | 2.46 | % | ||||||||||
Loans, receivable, net | 4.60 | 4.78 | 4.85 | 4.69 | 4.62 | |||||||||||||||
Total interest-earning assets | 4.30 | 4.43 | 4.48 | 4.34 | 4.26 | |||||||||||||||
Interest-bearing transaction deposits | 0.58 | 0.58 | 0.52 | 0.44 | 0.34 | |||||||||||||||
Time deposits | 1.72 | 1.66 | 1.50 | 1.31 | 1.17 | |||||||||||||||
Borrowed funds | 2.64 | 2.70 | 2.73 | 2.66 | 2.54 | |||||||||||||||
Total interest-bearing liabilities | 0.98 | 0.98 | 0.89 | 0.80 | 0.74 | |||||||||||||||
Net interest spread | 3.32 | 3.45 | 3.59 | 3.54 | 3.52 | |||||||||||||||
Net interest margin | 3.55 | 3.66 | 3.78 | 3.71 | 3.67 | |||||||||||||||
Total deposits | 0.62 | 0.62 | 0.57 | 0.48 | 0.39 |
(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 expenses, branch consolidation expenses, non-recurring professional fees, compensation expense due to the retirement of an executive officer and the impact to income tax expense related to Tax Reform. Refer to Other Items - Non-GAAP Reconciliation for impact of these items. |
(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. |
For the Three Months Ended | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Core earnings: | ||||||||||||||||||||
Net income | $ | 24,971 | $ | 18,980 | $ | 21,173 | $ | 26,732 | $ | 24,071 | ||||||||||
Non-recurring items: | ||||||||||||||||||||
Add: Merger related expenses | 777 | 931 | 5,053 | 1,048 | 662 | |||||||||||||||
Branch consolidation expenses | 1,696 | 6,695 | 391 | 240 | 1,368 | |||||||||||||||
Non-recurring professional fees | 750 | — | — | — | — | |||||||||||||||
Compensation expense due to the retirement of an executive officer | — | 1,256 | — | — | — | |||||||||||||||
Income tax benefit related to Tax Reform | — | — | — | (1,854 | ) | — | ||||||||||||||
Less: Income tax expense on items | (663 | ) | (1,867 | ) | (1,039 | ) | (130 | ) | (426 | ) | ||||||||||
Core earnings | $ | 27,531 | $ | 25,995 | $ | 25,578 | $ | 26,036 | $ | 25,675 | ||||||||||
Core diluted earnings per share | $ | 0.54 | $ | 0.51 | $ | 0.51 | $ | 0.54 | $ | 0.53 | ||||||||||
Core ratios (Annualized): | ||||||||||||||||||||
Return on average assets | 1.35 | % | 1.29 | % | 1.32 | % | 1.38 | % | 1.35 | % | ||||||||||
Return on average tangible stockholders’ equity | 14.53 | 14.14 | 14.46 | 15.19 | 15.35 | |||||||||||||||
Efficiency ratio | 53.56 | 56.26 | 56.60 | 53.54 | 53.74 |
For the Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Core earnings: | ||||||||
Net income | $ | 65,124 | $ | 45,200 | ||||
Non-recurring items: | ||||||||
Add: Merger related expenses | 6,761 | 25,863 | ||||||
Branch consolidation expenses | 8,782 | 2,911 | ||||||
Non-recurring professional fees | 750 | — | ||||||
Compensation expense due to the retirement of an executive officer | 1,256 | — | ||||||
Less: Income tax expense on items | (3,569 | ) | (5,861 | ) | ||||
Core earnings | $ | 79,104 | $ | 68,113 | ||||
Core diluted earnings per share | $ | 1.56 | $ | 1.44 | ||||
Core ratios (Annualized): | ||||||||
Return on average assets | 1.32 | % | 1.24 | % | ||||
Return on average tangible stockholders’ equity | 14.37 | 14.40 | ||||||
Efficiency ratio | 55.47 | 57.87 |
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Total stockholders’ equity | $ | 1,144,528 | $ | 1,137,295 | $ | 1,127,163 | $ | 1,039,358 | $ | 1,029,844 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 374,537 | 374,592 | 375,096 | 338,442 | 338,104 | |||||||||||||||
Core deposit intangible | 16,605 | 17,614 | 18,629 | 16,971 | 17,954 | |||||||||||||||
Tangible stockholders’ equity | $ | 753,386 | $ | 745,089 | $ | 733,438 | $ | 683,945 | $ | 673,786 | ||||||||||
Total assets | $ | 8,135,173 | $ | 8,029,057 | $ | 8,092,948 | $ | 7,516,154 | $ | 7,562,589 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 374,537 | 374,592 | 375,096 | 338,442 | 338,104 | |||||||||||||||
Core deposit intangible | 16,605 | 17,614 | 18,629 | 16,971 | 17,954 | |||||||||||||||
Tangible assets | $ | 7,744,031 | $ | 7,636,851 | $ | 7,699,223 | $ | 7,160,741 | $ | 7,206,531 | ||||||||||
Tangible stockholders’ equity to tangible assets | 9.73 | % | 9.76 | % | 9.53 | % | 9.55 | % | 9.35 | % |
At January 31, 2019 | |||||||||||
Capital Bank Book Value | Purchase Accounting Adjustments | Estimated Fair Value | |||||||||
Total Purchase Price: | $ | 76,834 | |||||||||
Assets acquired: | |||||||||||
Cash and cash equivalents | $ | 59,748 | $ | — | $ | 59,748 | |||||
Securities | 103,798 | (23 | ) | 103,775 | |||||||
Loans | 312,320 | (4,542 | ) | 307,778 | |||||||
Accrued interest receivable | 1,387 | 3 | 1,390 | ||||||||
Bank Owned Life Insurance | 10,460 | — | 10,460 | ||||||||
Deferred tax asset | 1,605 | 2,224 | 3,829 | ||||||||
Other assets | 9,384 | (4,277 | ) | 5,107 | |||||||
Core deposit intangible | — | 2,662 | 2,662 | ||||||||
Total assets acquired | 498,702 | (3,953 | ) | 494,749 | |||||||
Liabilities assumed: | |||||||||||
Deposits | (448,792 | ) | (226 | ) | (449,018 | ) | |||||
Other liabilities | (827 | ) | (4,188 | ) | (5,015 | ) | |||||
Total liabilities assumed | (449,619 | ) | (4,414 | ) | (454,033 | ) | |||||
Net assets acquired | $ | 49,083 | $ | (8,367 | ) | $ | 40,716 | ||||
Goodwill recorded in the merger | $ | 36,118 |
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Document and Entity Information |
Oct. 25, 2019 |
---|---|
Cover page. | |
Document Type | 8-K |
Document Period End Date | Oct. 25, 2019 |
Entity Registrant Name | OCEANFIRST FINANCIAL CORP. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-11713 |
Entity Tax Identification Number | 22-3412577 |
Entity Address, Address Line One | 110 West Front Street |
Entity Address, City or Town | Red Bank |
Entity Address, State or Province | NJ |
Entity Address, Postal Zip Code | 07701 |
City Area Code | 732 |
Local Phone Number | 240-4500 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, $0.01 par value per share |
Trading Symbol | OCFC |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001004702 |
Amendment Flag | false |
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