TOMS RIVER, N.J., July 28, 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 were $0.16 for the three months ended June 30, 2016, as compared to $0.31 for the corresponding prior year quarter. For the six months ended June 30, 2016, diluted earnings per share were $0.39, as compared to $0.63 for the corresponding prior year period.
On May 2, 2016, the Company completed its acquisition of Cape Bancorp, Inc. ("Cape"), which added $1.5 billion in assets, $1.2 billion in loans, and $1.2 billion in deposits. The Company anticipates that core system integration and rebranding will occur in October 2016, providing for the realization of additional cost savings entering the first quarter of 2017. The results of operations for the three and six months ended June 30, 2016 includes merger related expenses of $7.2 million and $8.6 million, respectively. In connection with the acquisition, the Bank deleveraged the combined balance sheet through the sale of lower-yielding securities and the prepayment of existing term borrowings in order to improve the net interest margin, reduce interest rate sensitivity, and increase capital ratios. The implementation of this strategy resulted in an expense of $136,000 relating to the prepayment of Federal Home Loan Bank ("FHLB") borrowings and a loss of $12,000 on the sale of investment securities available-for-sale. Excluding the after-tax impact of merger related expenses and deleveraging costs, core earnings for the three and six months ended June 30, 2016 were $8.7 million or $0.38 per diluted share, and $14.1 million, or $0.70 per diluted share, respectively. (Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.)
Other highlights are described below.
- Primarily due to the benefit of the Cape acquisition, net interest margin increased to 3.55%, as compared to 3.32% in the trailing quarter and 3.23% in the prior year quarter.
- The Company’s strong deposit funding is reflected in the loan to deposit ratio at June 30, 2016 of 97.6% and the average cost of deposits for the quarter ended June 30, 2016 of 0.25%.
- On July 13, 2016, the Company announced it had entered into a definitive agreement and plan of merger pursuant to which Ocean Shore Holding Company ("Ocean Shore"), the holding company and parent of Ocean City Home Bank, will merge with and into OceanFirst in a transaction valued at approximately $145.6 million. Ocean City Home Bank is one of Southern New Jersey’s oldest and largest community banks with approximately $1.1 billion in total assets, $818 million in total deposits and $796 million in gross loans.
Chief Executive Officer and President Christopher D. Maher commented, "The Company achieved substantial improvement in core earnings, as we delivered the initial expected benefits of the Cape acquisition. We anticipate additional expense savings later in the year due to core system integration and rebranding which should be fully realized as we enter the first quarter of 2017." Mr. Maher added; "Our continued investment in deposit gathering capabilities, reflected in the Cape and Ocean Shore acquisitions, support our strategy of funding loan growth with high quality, core deposits."
The Company also announced that the Board of Directors declared its seventy-eighth consecutive quarterly cash dividend on common stock. The dividend for the quarter ended June 30, 2016 of $0.13 per share will be paid on August 19, 2016 to stockholders of record on August 8, 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 three and six months ended June 30, 2016, but are excluded from the results of operations for the corresponding prior year periods.
On May 2, 2016, the Company completed its acquisition of Cape and its results of operations from May 2, 2016 through June 30, 2016 are included in the consolidated results for the three and six months ended June 30, 2016, but are excluded from the results of operations for the corresponding prior year periods.
Net income for the three months ended June 30, 2016 was $3.7 million, or $0.16 per diluted share, as compared to net income of $5.1 million, or $0.31 per diluted share, for the corresponding prior year period. Net income for the six months ended June 30, 2016 was $7.9 million, or $0.39 per diluted share, as compared to net income of $10.4 million, or $0.63 per diluted share, for the corresponding prior year period. Net income for the three and six months ended June 30, 2016 includes merger related expenses, of $7.2 million and $8.6 million, respectively. Additionally, net income for the three and six months ended June 30, 2016, includes a Federal Home Loan Bank prepayment fee of $136,000, and a loss on the sale of investment securities available-for-sale of $12,000. Excluding these items, diluted earnings per share increased over the prior year periods due to higher net interest income and other income partly offset by higher operating expenses and provision for loan losses. Net income for the three and six months ended June 30, 2016 included losses of $138,000 and $417,000, respectively, 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 expenses, the FHLB prepayment fee and loss on sale of investment securities, diluted earnings per share increased $0.06 from the prior linked quarter primarily due to the favorable impact of the Cape acquisition.
Net interest income for the three and six months ended June 30, 2016 increased to $30.0 million and $50.6 million, respectively, as compared to $18.4 million and $36.6 million for the same prior year periods, reflecting an increase in interest-earning assets and a higher net interest margin. Average interest-earning assets increased $1,102.2 million and $668.5 million, respectively, for the three and six months ended June 30, 2016, as compared to the same prior year periods. The three and six months ended June 30, 2016 were favorably impacted by the interest-earning assets acquired from Cape and Colonial, which averaged $980.2 million and $545.6 million, respectively. Average loans receivable, net, increased $1,009.5 million and $644.1 million, respectively, for the three and six months ended June 30, 2016, as compared to the same prior year periods. The increases attributable to Cape and Colonial were $866.4 million and $483.9 million, respectively. The net interest margin increased to 3.55% and 3.45%, respectively, for the three and six months ended June 30, 2016, as compared to 3.23% for both prior year periods. The yield on average interest-earning assets increased to 3.92% and 3.84%, respectively, for the three and six months ended June 30, 2016, as compared to 3.61% and 3.60% for the same prior year periods. The yields on average interest-earning assets for the three and six months ended June 30, 2016 benefited from the accretion of purchase accounting adjustments on Cape and Colonial of $1.3 million and $1.4 million, respectively; the higher-yielding interest-earning assets acquired from Cape; and the change in the average balance sheet mix in favor of higher-yielding loans receivable at the expense of lower-yielding securities. The cost of average interest-bearing liabilities at 0.46% for the three months ended June 30, 2016, was unchanged as compared to the prior year period. For the six months ended June 30, 2016, the cost of average interest-bearing liabilities increased to 0.48%, from 0.46% in the prior year period. The total cost of deposits (including non-interest bearing deposits) was 0.25%, for both the three and six months ended June 30, 2016, as compared to 0.22% for both prior year periods.
Net interest income for the three months ended June 30, 2016 increased $9.5 million, as compared to the prior linked quarter, as interest-earning assets increased $909.3 million, of which $876.6 million relates to Cape, and as the net interest margin increased to 3.55%, from 3.32%. The yield on average interest-earning assets increased to 3.92% for the three months ended June 30, 2016, from 3.73% for the prior linked quarter, while the cost of average interest-bearing liabilities was 0.46% for the three months ended June 30, 2016, as compared to 0.50% for the prior linked quarter.
For the three and six months ended June 30, 2016, the provision for loan losses was $662,000 and $1.2 million, respectively, as compared to $300,000 and $675,000, respectively, for the corresponding prior year periods. Net charge-offs were $198,000 and $1.3 million, respectively, for the three and six months ended June 30, 2016, as compared to net charge-offs of $185,000 and $458,000, respectively, in the corresponding prior year periods. The increase in net charge-offs for the six months ended June 30, 2016 was primarily due to first quarter charge-offs of $886,000 on two non-performing commercial loans. Non-performing loans decreased to $15.3 million at June 30, 2016, as compared to $16.2 million at March 31, 2016 and $20.9 million at June 30, 2015.
For the three and six months ended June 30, 2016, other income increased to $4.9 million and $8.3 million, respectively, as compared to $4.2 million and $8.2 million, respectively, in the same prior year periods. The increases from the prior periods were primarily due to the impact of the Cape acquisition which added $951,000 to total other income for the three and six months ended June 30, 2016, as compared to the same prior year periods. Excluding Cape, other income decreased $238,000 and $848,000, respectively, as compared to the same prior year periods. The decreases, excluding Cape, were partly due to higher net losses from other real estate operations of $196,000 and $623,000, respectively, as compared to the prior year periods. The losses were 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 currently engaged in a sales process with qualified buyers. The results for the three and six months ended June 30, 2015 included gains on sale of loan servicing of $30,000 and $111,000, respectively.
For the quarter ended June 30, 2016, other income, excluding the impact from Cape, increased $557,000, as compared to the prior linked quarter. The increases were related to a lower net loss on other real estate operations of $138,000 and a $187,000 increase in fees and service charges.
Operating expenses increased to $28.6 million and $45.4 million, respectively, for the three and six months ended June 30, 2016, as compared to $14.4 million and $28.1 million, respectively, in the same prior year periods. Operating expenses for the three and six months ended June 30, 2016 include $7.2 million and $8.6 million, respectively, in merger related expenses relating to the acquisition of Cape, as compared to merger related expenses of $184,000 and $234,000, respectively, in the prior year periods relating to the acquisition of Colonial. Excluding merger related expenses, the increases in operating expenses over the prior year were primarily due to the operations of Cape and Colonial, which added $5.3 million and $5.8 million for the quarter and year-to-date, respectively; the investment in commercial lending which added expenses of $339,000 and $780,000 for the quarter and year-to-date, respectively; the impact of new branches which added expenses of $391,000 and $722,000 for the quarter and year-to-date, respectively; and the FHLB prepayment fee of $136,000.
For the three months ended June 30, 2016, operating expenses increased $6.1 million, as compared to the prior linked quarter, excluding merger related expenses. The increase was primarily due to the additional expense from the operations of Cape of $4.9 million; the FHLB prepayment fee of $136,000; higher compensation and employee benefits expense of $387,000; and higher marketing expense of $212,000.
The provision for income taxes was $1.9 million and $4.4 million, respectively, for the three and six months ended June 30, 2016, as compared to $2.8 million and $5.5 million, respectively, for the same prior year periods. The effective tax rate was 34.5% and 35.8%, respectively, for the three and six months ended June 30, 2016 as compared to 35.1% and 34.7%, respectively, for the same prior year periods and 36.8% in the prior linked quarter. The variances in the effective tax rate were primarily due to the timing of non-deductible merger related expenses.
Financial Condition
Total assets increased by $1,454.4 million to $4,047.5 million at June 30, 2016, from $2,593.1 million at December 31, 2015 as a result of the acquisition of Cape. Loans receivable, net, increased by $1,159.3 million, to $3,130.0 million at June 30, 2016, from $1,970.7 million at December 31, 2015. Excluding the Cape acquisition, loans receivable, net, increased $2.4 million. As part of the acquisition of Cape, Colonial and the purchase of an existing retail branch in the Toms River market in the first quarter of 2016, the Company has outstanding goodwill and core deposit intangible at June 30, 2016 of $67.1 million and $3.9 million, respectively.
Deposits increased by $1,289.6 million, to $3,206.3 million at June 30, 2016, from $1,916.7 million at December 31, 2015, including deposits of $1,248.4 million acquired from Cape and $17.0 million acquired through the purchase of an existing retail branch located in the Toms River market. The loan-to-deposit ratio at June 30, 2016 was 97.6%, as compared to 102.8% at December 31, 2015. The deposit growth partly funded a decrease in FHLB advances of $11.8 million, to $312.6 million at June 30, 2016, from $324.4 million at December 31, 2015.
Stockholders' equity increased to $409.3 million at June 30, 2016, as compared to $238.4 million at December 31, 2015. The acquisition of Cape added $165.9 million to stockholder’s equity. At June 30, 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 decreased to $13.14 at June 30, 2016, as compared to $13.67 at December 31, 2015 due to the addition of intangible assets in the Cape acquisition.
Asset Quality
The Company's non-performing loans decreased to $15.3 million at June 30, 2016, compared to $18.3 million at December 31, 2015 and $20.9 million at June 30, 2015. Non-performing loans do not include $9.7 million of purchased credit-impaired ("PCI") loans acquired from Cape and Colonial. The Company’s other real estate owned totaled $9.8 million at June 30, 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 June 30, 2016, the Company’s allowance for loan losses was 0.53% of total loans, a decrease from 0.84% at December 31, 2015. These ratios exclude existing fair value credit marks of $27.3 million at June 30, 2016 on the Cape and Colonial loans and $2.2 million at December 31, 2015 on the Colonial 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 108.79% at June 30, 2016 as compared to 91.51% at December 31, 2015.
Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income, excluding merger related expenses, loss on sale of investment securities available for sale and Federal Home Loan Bank prepayment fee, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
Conference Call
As previously announced, the Company will host an earnings conference call on Friday, July 29, 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 10088668 from one hour after the end of the call until October 29, 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 $4.0 billion in assets, $3.1 billion in loans, $3.2 billion in deposits and 50 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 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)
| June 30, | March 31, | December 31, | June 30, | |||||||||||||||||||
| 2016 | 2016 | 2015 | 2015 | |||||||||||||||||||
| ASSETS | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Cash, due from banks and interest-bearing deposits | $ | 66,222 | $ | 34,261 | $ | 43,946 | $ | 40,359 | ||||||||||||||
| Securities available-for-sale, at estimated fair value | 12,509 | 30,085 | 29,902 | 30,030 | ||||||||||||||||||
| Securities held-to-maturity, net (estimated fair value of $520,971 at June 30, 2016, $378,613 at March 31, 2016, $397,763 at December 31, 2015, and $420,409 at June 30, 2015) | 513,721 | 375,616 | 394,813 | 414,625 | ||||||||||||||||||
| Federal Home Loan Bank of New York stock, at cost | 21,128 | 16,645 | 19,978 | 18,740 | ||||||||||||||||||
| Loans receivable, net | 3,130,046 | 1,996,993 | 1,970,703 | 1,772,879 | ||||||||||||||||||
| Mortgage loans held for sale | 5,310 | 3,386 | 2,697 | 1,454 | ||||||||||||||||||
| Interest and dividends receivable | 10,143 | 6,036 | 5,860 | 5,550 | ||||||||||||||||||
| Other real estate owned | 9,791 | 9,029 | 8,827 | 3,357 | ||||||||||||||||||
| Premises and equipment, net | 49,392 | 28,322 | 28,419 | 24,931 | ||||||||||||||||||
| Servicing asset | 664 | 544 | 589 | 487 | ||||||||||||||||||
| Bank Owned Life Insurance | 105,929 | 57,868 | 57,549 | 56,858 | ||||||||||||||||||
| Deferred tax asset | 37,052 | 16,786 | 16,807 | 15,234 | ||||||||||||||||||
| Other assets | 14,581 | 10,485 | 10,900 | 10,596 | ||||||||||||||||||
| Core deposit intangible | 3,903 | 310 | 256 | 0 | ||||||||||||||||||
| Goodwill | 67,102 | 2,081 | 1,822 | 0 | ||||||||||||||||||
| Total Assets | $ | 4,047,493 | $ | 2,588,447 | $ | 2,593,068 | $ | 2,395,100 | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
| Deposits | $ | 3,206,262 | $ | 1,971,360 | $ | 1,916,678 | $ | 1,761,675 | ||||||||||||||
| Securities sold under agreements to repurchase with retail customers | 67,673 | 83,913 | 75,872 | 71,687 | ||||||||||||||||||
| Federal Home Loan Bank advances | 312,603 | 251,917 | 324,385 | 295,616 | ||||||||||||||||||
| Other borrowings | 22,500 | 22,500 | 22,500 | 27,500 | ||||||||||||||||||
| Advances by borrowers for taxes and insurance | 9,828 | 7,271 | 7,121 | 7,845 | ||||||||||||||||||
| Other liabilities | 19,369 | 10,410 | 8,066 | 9,242 | ||||||||||||||||||
| Total liabilities | 3,638,235 | 2,347,371 | 2,354,622 | 2,173,565 | ||||||||||||||||||
| 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 25,748,898, 17,358,005, 17,286,557 and 16,722,632, shares outstanding at June 30, 2016, March 31, 2016, December 31, 2015, and June 30, 2015, respectively | 336 | 336 | 336 | 336 | ||||||||||||||||||
| Additional paid-in capital | 308,460 | 271,003 | 269,757 | 267,248 | ||||||||||||||||||
| Retained earnings | 230,895 | 231,016 | 229,140 | 223,644 | ||||||||||||||||||
| Accumulated other comprehensive loss | (5,798 | ) | (5,923 | ) | (6,241 | ) | (6,587 | ) | ||||||||||||||
| Less: Unallocated common stock held by Employee Stock Ownership Plan | (2,903 | ) | (2,974 | ) | (3,045 | ) | (3,187 | ) | ||||||||||||||
| Treasury stock, 7,817,874, 16,208,767, 16,280,215, and 16,844,140 shares at June 30, 2016, March 31, 2016, December 31, 2015,and June 30, 2015, respectively | (121,732 | ) | (252,382 | ) | (251,501 | ) | (259,919 | ) | ||||||||||||||
| Common stock acquired by Deferred Compensation Plan | (308 | ) | (305 | ) | (314 | ) | (309 | ) | ||||||||||||||
| Deferred Compensation Plan Liability | 308 | 305 | 314 | 309 | ||||||||||||||||||
| Total stockholders' equity | 409,258 | 241,076 | 238,446 | 221,535 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,047,493 | $ | 2,588,447 | $ | 2,593,068 | $ | 2,395,100 | ||||||||||||||
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
| For the Three Months Ended, | For the Six Months Ended | ||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
| -------------(unaudited)------------------ | ------------(unaudited)------------ | ||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||
| Loans | $ | 30,521 | $ | 21,035 | $ | 18,548 | $ | 51,556 | $ | 36,577 | |||||||||||||
| Mortgage-backed securities | 1,708 | 1,415 | 1,519 | 3,123 | 3,142 | ||||||||||||||||||
| Investment securities and other | 912 | 623 | 509 | 1,535 | 1,026 | ||||||||||||||||||
| Total interest income | 33,141 | 23,073 | 20,576 | 56,214 | 40,745 | ||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Deposits | 1,771 | 1,271 | 967 | 3,042 | 1,922 | ||||||||||||||||||
| Borrowed funds | 1,356 | 1,243 | 1,176 | 2,599 | 2,257 | ||||||||||||||||||
| Total interest expense | 3,127 | 2,514 | 2,143 | 5,641 | 4,179 | ||||||||||||||||||
| Net interest income | 30,014 | 20,559 | 18,433 | 50,573 | 36,566 | ||||||||||||||||||
| Provision for loan losses | 662 | 563 | 300 | 1,225 | 675 | ||||||||||||||||||
| Net interest income after provision for loan losses | 29,352 | 19,996 | 18,133 | 49,348 | 35,891 | ||||||||||||||||||
| Other income: | |||||||||||||||||||||||
| Bankcard services revenue | 1,211 | 851 | 899 | 2,062 | 1,682 | ||||||||||||||||||
| Wealth management revenue | 621 | 550 | 629 | 1,171 | 1,157 | ||||||||||||||||||
| Fees and service charges | 2,502 | 1,817 | 2,059 | 4,319 | 3,949 | ||||||||||||||||||
| Loan servicing income | 95 | 56 | 59 | 151 | 111 | ||||||||||||||||||
| Net loss on sale of investment securities available for sale | (12 | ) | — | — | (12 | ) | — | ||||||||||||||||
| Net gain on sale of loan servicing | — | — | 30 | — | 111 | ||||||||||||||||||
| Net gain on sales of loans available for sale | 170 | 179 | 185 | 349 | 377 | ||||||||||||||||||
| Net loss from other real estate operations | (313 | ) | (406 | ) | (72 | ) | (719 | ) | (51 | ) | |||||||||||||
| Income from Bank Owned Life Insurance | 542 | 319 | 364 | 861 | 810 | ||||||||||||||||||
| Other | 67 | 10 | 18 | 77 | 11 | ||||||||||||||||||
| Total other income | 4,883 | 3,376 | 4,171 | 8,259 | 8,157 | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Compensation and employee benefits | 11,432 | 8,466 | 7,700 | 19,898 | 15,239 | ||||||||||||||||||
| Occupancy | 2,011 | 1,626 | 1,242 | 3,637 | 2,696 | ||||||||||||||||||
| Equipment | 1,184 | 969 | 813 | 2,153 | 1,611 | ||||||||||||||||||
| Marketing | 543 | 251 | 415 | 794 | 689 | ||||||||||||||||||
| Federal deposit insurance | 723 | 529 | 506 | 1,252 | 1,004 | ||||||||||||||||||
| Data processing | 1,881 | 1,265 | 1,101 | 3,146 | 2,189 | ||||||||||||||||||
| Check card processing | 505 | 420 | 423 | 925 | 898 | ||||||||||||||||||
| Professional fees | 700 | 498 | 539 | 1,198 | 934 | ||||||||||||||||||
| Other operating expense | 2,217 | 1,277 | 1,469 | 3,493 | 2,636 | ||||||||||||||||||
| Federal Home Loan Bank prepayment fee | 136 | — | — | 136 | — | ||||||||||||||||||
| Amortization of core deposit intangible | 125 | 13 | — | 138 | — | ||||||||||||||||||
| Merger related expense | 7,189 | 1,402 | 184 | 8,591 | 234 | ||||||||||||||||||
| Total operating expenses | 28,646 | 16,716 | 14,392 | 45,361 | 28,130 | ||||||||||||||||||
| Income before provision for income taxes | 5,589 | 6,656 | 7,912 | 12,246 | 15,918 | ||||||||||||||||||
| Provision for income taxes | 1,928 | 2,451 | 2,779 | 4,380 | 5,523 | ||||||||||||||||||
| Net income | $ | 3,661 | $ | 4,205 | $ | 5,133 | $ | 7,866 | $ | 10,395 | |||||||||||||
| Basic earnings per share | $ | 0.16 | $ | 0.25 | $ | 0.31 | $ | 0.40 | $ | 0.63 | |||||||||||||
| Diluted earnings per share | $ | 0.16 | $ | 0.25 | $ | 0.31 | $ | 0.39 | $ | 0.63 | |||||||||||||
| Average basic shares outstanding | 22,478 | 16,906 | 16,401 | 19,694 | 16,433 | ||||||||||||||||||
| Average diluted shares outstanding | 22,880 | 17,118 | 16,593 | 19,996 | 16,613 | ||||||||||||||||||
OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
| LOANS RECEIVABLE | |||||||||||||||||||||||
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | $ | 222,355 | $ | 141,364 | $ | 144,788 | $ | 129,379 | $ | 111,229 | |||||||||||||
| Commercial real estate – owner-occupied | 523,662 | 308,666 | 307,509 | 317,438 | 281,178 | ||||||||||||||||||
| Commercial real estate – investor | 1,011,354 | 536,754 | 510,936 | 486,625 | 417,108 | ||||||||||||||||||
| Total commercial | 1,757,371 | 986,784 | 963,233 | 933,442 | 809,515 | ||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| Residential mortgage | 1,096,091 | 796,139 | 793,946 | 789,517 | 749,416 | ||||||||||||||||||
| Residential construction | 48,266 | 54,259 | 50,757 | 51,580 | 52,428 | ||||||||||||||||||
| Home equity loans and lines | 258,398 | 190,621 | 192,368 | 193,587 | 191,708 | ||||||||||||||||||
| Other consumer | 1,586 | 570 | 792 | 719 | 643 | ||||||||||||||||||
| Total consumer | 1,404,341 | 1,041,589 | 1,037,863 | 1,035,403 | 994,195 | ||||||||||||||||||
| Total loans | 3,161,712 | 2,028,373 | 2,001,096 | 1,968,845 | 1,803,710 | ||||||||||||||||||
| Loans in process | (13,119 | ) | (15,033 | ) | (14,206 | ) | (14,145 | ) | (16,073 | ) | |||||||||||||
| Deferred origination costs, net | 3,441 | 3,253 | 3,232 | 3,216 | 3,230 | ||||||||||||||||||
| Allowance for loan losses | (16,678 | ) | (16,214 | ) | (16,722 | ) | (16,638 | ) | (16,534 | ) | |||||||||||||
| Total loans, net | 3,135,356 | 2,000,379 | 1,973,400 | 1,941,278 | 1,774,333 | ||||||||||||||||||
| Less: mortgage loans held for sale | 5,310 | 3,386 | 2,697 | 2,306 | 1,454 | ||||||||||||||||||
| Loans receivable, net | $ | 3,130,046 | $ | 1,996,993 | $ | 1,970,703 | $ | 1,938,972 | $ | 1,772,879 | |||||||||||||
| Mortgage loans serviced for others | $ | 145,903 | $ | 152,653 | $ | 158,244 | $ | 164,488 | $ | 173,090 | |||||||||||||
| Loan pipeline: | Average Yield | ||||||||||||||||||||||
| Commercial | 4.14 | % | $ | 48,897 | $ | 57,571 | $ | 53,785 | $ | 71,944 | $ | 58,613 | |||||||||||
| Residential mortgage and construction | 3.79 | 30,520 | 28,528 | 31,860 | 39,894 | 26,854 | |||||||||||||||||
| Home equity loans and lines | 4.38 | 5,594 | 8,082 | 5,481 | 8,859 | 8,059 | |||||||||||||||||
| Total | 4.03 | $ | 85,011 | $ | 94,181 | $ | 91,126 | $ | 120,697 | $ | 93,526 | ||||||||||||
| For the Three Months Ended, | |||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||||
| Loan originations: | |||||||||||||||||||||
| Commercial | 4.25 | % | $ | 59,543 | $ | 58,005 | $ | 72,534 | $ | 70,378 | $ | 52,037 | |||||||||
| Residential mortgage and construction | 3.66 | 40,295 | 34,361 | 43,616 | 35,994 | 47,261 | |||||||||||||||
| Home equity loans and lines | 4.32 | 10,067 | 10,915 | 10,431 | 13,841 | 13,259 | |||||||||||||||
| Total | 4.04 | $ | 109,905 | $ | 103,281 | $ | 126,581 | $ | 120,213 | $ | 112,557 | ||||||||||
| Loans sold | $ | 10,303 | $ | 8,901 | $ | 9,784 | $ | 11,063 | $ | 16,788 | |||||||||||
| DEPOSITS | |||||||||||||||
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||
| Type of Account | |||||||||||||||
| Non-interest-bearing | $ | 554,709 | $ | 351,743 | $ | 337,143 | $ | 362,079 | $ | 328,175 | |||||
| Interest-bearing checking | 1,310,290 | 860,468 | 859,927 | 883,940 | 794,310 | ||||||||||
| Money market deposit | 366,942 | 163,885 | 153,196 | 151,657 | 123,017 | ||||||||||
| Savings | 489,132 | 327,845 | 310,989 | 310,009 | 306,079 | ||||||||||
| Time deposits | 485,189 | 267,420 | 255,423 | 260,086 | 210,094 | ||||||||||
| $ | 3,206,262 | $ | 1,971,361 | $ | 1,916,678 | $ | 1,967,771 | $ | 1,761,675 | ||||||
OceanFirst Financial Corp.
ASSET QUALITY
(in thousands)
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||||||||||
| Non-performing loans: | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | 964 | $ | 909 | $ | 123 | $ | 115 | $ | 115 | ||||||||||||||||||
| Commercial real estate – owner-occupied | 4,363 | 4,354 | 7,684 | 15,666 | 13,139 | |||||||||||||||||||||||
| Commercial real estate – investor | 1,675 | 940 | 3,112 | 1,391 | 1,462 | |||||||||||||||||||||||
| Residential mortgage | 7,102 | 8,788 | 5,779 | 5,481 | 4,288 | |||||||||||||||||||||||
| Home equity loans and lines | 1,226 | 1,202 | 1,574 | 1,738 | 1,899 | |||||||||||||||||||||||
| Other consumer | — | — | 2 | 3 | 2 | |||||||||||||||||||||||
| Total non-performing loans | 15,330 | 16,193 | 18,274 | 24,394 | 20,905 | |||||||||||||||||||||||
| Other real estate owned | 9,791 | 9,029 | 8,827 | 3,262 | 3,357 | |||||||||||||||||||||||
| Total non-performing assets | $ | 25,121 | $ | 25,222 | $ | 27,101 | $ | 27,656 | $ | 24,262 | ||||||||||||||||||
| Purchased credit-impaired ("PCI") loans | $ | 9,673 | $ | 376 | $ | 461 | $ | 1,019 | $ | — | ||||||||||||||||||
| Delinquent loans 30 to 89 days | $ | 15,643 | $ | 6,996 | $ | 9,087 | $ | 8,025 | $ | 7,258 | ||||||||||||||||||
| Troubled debt restructurings: | ||||||||||||||||||||||||||||
| Non-performing (included in total non-performing loans above) | $ | 2,990 | $ | 4,775 | $ | 4,918 | $ | 3,819 | $ | 3,832 | ||||||||||||||||||
| Performing | 28,173 | 26,689 | 26,344 | 26,935 | 27,618 | |||||||||||||||||||||||
| Total troubled debt restructurings | $ | 31,163 | $ | 31,464 | $ | 31,262 | $ | 30,754 | $ | 31,450 | ||||||||||||||||||
| Allowance for loan losses | $ | 16,678 | $ | 16,214 | $ | 16,722 | $ | 16,638 | $ | 16,534 | ||||||||||||||||||
| Allowance for loan losses as a percent of total loans receivable | 0.53 | % | 0.80 | % | 0.84 | % | 0.85 | % | 0.92 | % | ||||||||||||||||||
| Allowance for loan losses and fair value credit marks as a percent of total loans receivable (1) | 1.39 | % | 0.91 | % | 0.95 | % | 1.01 | % | 0.92 | % | ||||||||||||||||||
| Allowance for loan losses as a percent of total non-performing loans | 108.79 | 100.13 | 91.51 | 68.21 | 79.09 | |||||||||||||||||||||||
| Non-performing loans as a percent of total loans receivable | 0.48 | 0.80 | 0.91 | 1.24 | 1.16 | |||||||||||||||||||||||
| Non-performing assets as a percent of total assets | 0.62 | 0.97 | 1.05 | 1.08 | 1.01 | |||||||||||||||||||||||
| (1) The loans acquired from Cape and Colonial were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for loans losses, was $27,281,000, $2,013,000, $2,202,000 and $3,046,000 at June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively. | ||||||||||||||||||||||||||||
NET CHARGE-OFFS
| For the quarters ended | |||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||
| Net Charge-offs: | |||||||||||||||||
| Loan charge-offs | $ | (223 | ) | $ | (1,172 | ) | $ | (236 | ) | $ | (210 | ) | $ | (331 | ) | ||
| Recoveries on loans | 25 | 101 | 19 | 14 | 146 | ||||||||||||
| Net loan charge-offs | $ | (198 | ) | $ | (1,071 | ) | $ | (217 | ) | $ | (196 | ) | $ | (185 | ) | ||
| Net loan charge-offs to average total loans (annualized) | 0.03 | % | 0.21 | % | 0.04 | % | 0.04 | % | 0.04 | % | |||||||
| Net charge-off detail - (loss) recovery: | |||||||||||||||||
| Commercial | $ | (84 | ) | $ | (1,073 | ) | $ | 12 | $ | (47 | ) | $ | (3 | ) | |||
| Residential mortgage and construction | (69 | ) | (24 | ) | (117 | ) | (51 | ) | 11 | ||||||||
| Home equity loans and lines | (45 | ) | 28 | (109 | ) | (98 | ) | (192 | ) | ||||||||
| Other consumer | — | (2 | ) | (3 | ) | — | (1 | ) | |||||||||
| Net loans charged-off | $ | (198 | ) | $ | (1,071 | ) | $ | (217 | ) | $ | (196 | ) | $ | (185 | ) | ||
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
| FOR THE THREE MONTHS ENDED, | |||||||||||||||||||||||||||||||||
| JUNE 30, 2016 | MARCH 31, 2016 | JUNE 30, 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 | $ | 40,567 | $ | 41 | 0.40 | % | $ | 48,501 | $ | 28 | 0.23 | % | $ | 28,636 | $ | 6 | 0.08 | % | |||||||||||||||
| Securities (1) and FHLB stock | 571,463 | 2,579 | 1.81 | 445,696 | 2,010 | 1.80 | 490,760 | 2,022 | 1.65 | ||||||||||||||||||||||||
| Loans receivable, net (2): | |||||||||||||||||||||||||||||||||
| Commercial | 1,471,159 | 17,783 | 4.84 | 972,050 | 10,998 | 4.53 | 790,055 | 8,759 | 4.43 | ||||||||||||||||||||||||
| Residential | 1,076,557 | 10,225 | 3.80 | 830,840 | 8,039 | 3.87 | 791,603 | 7,799 | 3.94 | ||||||||||||||||||||||||
| Home equity | 236,937 | 2,498 | 4.22 | 191,355 | 1,990 | 4.16 | 194,250 | 1,982 | 4.08 | ||||||||||||||||||||||||
| Other | 1,011 | 15 | 5.93 | 501 | 8 | 6.39 | 436 | 8 | 7.00 | ||||||||||||||||||||||||
| Allowance for loan loss net of deferred loan fees | (13,146 | ) | — | — | (13,645 | ) | — | — | (13,349 | ) | — | — | |||||||||||||||||||||
| Total loans | 2,772,518 | 30,521 | 4.40 | 1,981,101 | 21,035 | 4.25 | 1,762,995 | 18,548 | 4.21 | ||||||||||||||||||||||||
| Total interest-earning assets | 3,384,548 | 33,141 | 3.92 | 2,475,298 | 23,073 | 3.73 | 2,282,391 | 20,576 | 3.61 | ||||||||||||||||||||||||
| Non-interest-earning assets | 262,554 | 129,719 | 112,445 | ||||||||||||||||||||||||||||||
| Total assets | $ | 3,647,102 | $ | 2,605,017 | $ | 2,394,836 | |||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Interest-bearing checking | $ | 1,166,298 | 503 | 0.17 | $ | 899,883 | 305 | 0.14 | $ | 845,871 | 187 | 0.09 | |||||||||||||||||||||
| Money market | 298,530 | 180 | 0.24 | 156,326 | 70 | 0.18 | 122,668 | 26 | 0.08 | ||||||||||||||||||||||||
| Savings | 434,438 | 41 | 0.04 | 316,148 | 26 | 0.03 | 305,173 | 25 | 0.03 | ||||||||||||||||||||||||
| Time deposits | 417,301 | 1,047 | 1.00 | 263,722 | 870 | 1.32 | 212,166 | 729 | 1.37 | ||||||||||||||||||||||||
| Total | 2,316,567 | 1,771 | 0.31 | 1,636,079 | 1,271 | 0.31 | 1,485,878 | 967 | 0.26 | ||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 76,907 | 26 | 0.14 | 83,506 | 28 | 0.13 | 67,873 | 22 | 0.13 | ||||||||||||||||||||||||
| FHLB advances | 287,171 | 1,201 | 1.67 | 266,234 | 1,084 | 1.63 | 270,432 | 952 | 1.41 | ||||||||||||||||||||||||
| Other borrowings | 22,500 | 129 | 2.29 | 22,500 | 131 | 2.33 | 27,500 | 202 | 2.94 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 2,703,145 | 3,127 | 0.46 | 2,008,319 | 2,514 | 0.50 | 1,851,683 | 2,143 | 0.46 | ||||||||||||||||||||||||
| Non-interest-bearing deposits | 529,230 | 343,371 | 307,528 | ||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities | 26,033 | 13,328 | 14,705 | ||||||||||||||||||||||||||||||
| Total liabilities | 3,258,408 | 2,365,018 | 2,173,916 | ||||||||||||||||||||||||||||||
| Stockholders' equity | 388,694 | 239,999 | 220,920 | ||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,647,102 | $ | 2,605,017 | $ | 2,394,836 | |||||||||||||||||||||||||||
| Net interest income | $ | 30,014 | $ | 20,559 | $ | 18,433 | |||||||||||||||||||||||||||
| Net interest rate spread (3) | 3.46 | % | 3.23 | % | 3.15 | % | |||||||||||||||||||||||||||
| Net interest margin (4) | 3.55 | % | 3.32 | % | 3.23 | % | |||||||||||||||||||||||||||
| Total cost of deposits (including non-interest bearing deposits) | 0.25 | % | 0.26 | % | 0.22 | % | |||||||||||||||||||||||||||
(1) Amounts are recorded at average amortized cost
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.
| FOR THE SIX MONTHS ENDED, | ||||||||||||||||||||||||
| JUNE 30, 2016 | JUNE 30, 2015 | |||||||||||||||||||||||
| 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 | $ | 44,533 | $ | 70 | 0.31 | % | $ | 28,443 | $ | 11 | 0.08 | % | ||||||||||||
| Securities (1) and FHLB stock | 508,590 | 4,588 | 1.80 | 500,326 | 4,157 | 1.66 | ||||||||||||||||||
| Loans receivable, net (2): | ||||||||||||||||||||||||
| Commercial | 1,221,604 | 28,780 | 4.71 | 765,396 | 17,058 | 4.46 | ||||||||||||||||||
| Residential | 954,059 | 18,265 | 3.83 | 785,079 | 15,530 | 3.96 | ||||||||||||||||||
| Home equity | 214,146 | 4,488 | 4.19 | 195,384 | 3,973 | 4.07 | ||||||||||||||||||
| Other | 756 | 23 | 6.08 | 434 | 15 | 6.91 | ||||||||||||||||||
| Allowance for loan loss net of deferred loan fees | (13,396 | ) | — | — | (13,269 | ) | — | — | ||||||||||||||||
| Total loans | 2,377,169 | 51,556 | 4.34 | 1,733,024 | 36,576 | 4.22 | ||||||||||||||||||
| Total interest-earning assets | 2,930,292 | 56,214 | 3.84 | 2,261,793 | 40,744 | 3.60 | ||||||||||||||||||
| Non-interest-earning assets | 195,768 | 112,176 | ||||||||||||||||||||||
| Total assets | $ | 3,126,060 | $ | 2,373,969 | ||||||||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing checking | $ | 1,033,091 | 808 | 0.16 | $ | 859,312 | 382 | 0.09 | ||||||||||||||||
| Money market | 227,428 | 250 | 0.22 | 111,860 | 46 | 0.08 | ||||||||||||||||||
| Savings | 375,293 | 67 | 0.04 | 303,717 | 49 | 0.03 | ||||||||||||||||||
| Time deposits | 340,511 | 1,917 | 1.13 | 208,324 | 1,444 | 1.39 | ||||||||||||||||||
| Total | 1,976,323 | 3,042 | 0.31 | 1,483,213 | 1,921 | 0.26 | ||||||||||||||||||
| Securities sold under agreements to repurchase | 80,207 | 54 | 0.13 | 67,260 | 43 | 0.13 | ||||||||||||||||||
| FHLB advances | 276,547 | 2,284 | 1.65 | 256,511 | 1,812 | 1.41 | ||||||||||||||||||
| Other borrowings | 22,500 | 261 | 2.32 | 27,500 | 402 | 2.92 | ||||||||||||||||||
| Total interest-bearing liabilities | 2,355,577 | 5,641 | 0.48 | 1,834,484 | 4,179 | 0.46 | ||||||||||||||||||
| Non-interest-bearing deposits | 436,300 | 302,490 | ||||||||||||||||||||||
| Non-interest-bearing liabilities | 19,836 | 14,701 | ||||||||||||||||||||||
| Total liabilities | 2,811,713 | 2,151,675 | ||||||||||||||||||||||
| Stockholders' equity | 314,347 | 222,294 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,126,060 | $ | 2,373,969 | ||||||||||||||||||||
| Net interest income | $ | 50,573 | $ | 36,566 | ||||||||||||||||||||
| Net interest rate spread (3) | 3.36 | % | 3.14 | % | ||||||||||||||||||||
| Net interest margin (4) | 3.45 | % | 3.23 | % | ||||||||||||||||||||
| Total cost of deposits (including non-interest bearing deposits) | 0.25 | % | 0.22 | % | ||||||||||||||||||||
(1) Amounts are recorded at average amortized cost
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.
OceanFirst Financial Corp.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share amounts)
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||||||
| Selected Financial Condition Data: | ||||||||||||||||||
| Total assets | $ | 4,047,493 | $ | 2,588,447 | $ | 2,593,068 | $ | 2,557,898 | $ | 2,395,100 | ||||||||
| Securities available-for-sale, at estimated fair value | 12,509 | 30,085 | 29,902 | 30,108 | 30,030 | |||||||||||||
| Securities held-to-maturity, net | 513,721 | 375,616 | 394,813 | 392,932 | 414,625 | |||||||||||||
| Federal Home Loan Bank of New York stock | 21,128 | 16,645 | 19,978 | 15,970 | 18,740 | |||||||||||||
| Loans receivable, net | 3,130,046 | 1,996,993 | 1,970,703 | 1,938,972 | 1,772,879 | |||||||||||||
| Mortgage loans held-for-sale | 5,310 | 3,386 | 2,697 | 2,306 | 1,454 | |||||||||||||
| Deposits | 3,206,262 | 1,971,360 | 1,916,678 | 1,967,771 | 1,761,675 | |||||||||||||
| Federal Home Loan Bank advances | 312,603 | 251,917 | 324,385 | 233,006 | 295,616 | |||||||||||||
| Securities sold under agreements to repurchase and other borrowings | 90,173 | 106,413 | 98,372 | 105,493 | 99,187 | |||||||||||||
| Stockholders' equity | 409,258 | 241,076 | 238,446 | 234,688 | 221,535 | |||||||||||||
| For the quarters ended | |||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
| Selected Operating Data: | |||||||||||||||
| Interest income | $ | 33,141 | $ | 23,073 | $ | 23,149 | $ | 21,970 | $ | 20,576 | |||||
| Interest expense | 3,127 | 2,514 | 2,461 | 2,395 | 2,143 | ||||||||||
| Net interest income | 30,014 | 20,559 | 20,688 | 19,575 | 18,433 | ||||||||||
| Provision for loan losses | 662 | 563 | 300 | 300 | 300 | ||||||||||
| Net interest income after provision for loan losses | 29,352 | 19,996 | 20,388 | 19,275 | 18,133 | ||||||||||
| Other income | 4,883 | 3,376 | 4,118 | 4,152 | 4,171 | ||||||||||
| Operating expenses | 21,457 | 15,314 | 15,885 | 15,117 | 14,208 | ||||||||||
| Merger related expenses | 7,189 | 1,402 | 614 | 1,030 | 184 | ||||||||||
| Income before provision for income taxes | 5,589 | 6,656 | 8,007 | 7,280 | 7,912 | ||||||||||
| Provision for income taxes | 1,928 | 2,451 | 2,777 | 2,582 | 2,779 | ||||||||||
| Net income | $ | 3,661 | $ | 4,205 | $ | 5,230 | $ | 4,698 | $ | 5,133 | |||||
| Diluted earnings per share | $ | 0.16 | $ | 0.25 | $ | 0.31 | $ | 0.28 | $ | 0.31 | |||||
| At or For the Quarters Ended | |||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
| Selected Financial Ratios and Other Data(1): | |||||||||||||||
| Performance Ratios (Annualized): | |||||||||||||||
| Return on average assets (2) | 0.40 | % | 0.65 | % | 0.81 | % | 0.75 | % | 0.86 | % | |||||
| Return on average stockholders' equity (2) | 3.77 | 7.01 | 8.85 | 8.02 | 9.29 | ||||||||||
| Return on average tangible stockholders' equity (2)(3) | 4.30 | 7.07 | 8.93 | 8.07 | 9.29 | ||||||||||
| Stockholders' equity to total assets | 10.11 | 9.31 | 9.19 | 9.18 | 9.25 | ||||||||||
| Tangible stockholders' equity to tangible assets (3) | 8.51 | 9.23 | 9.12 | 9.10 | 9.25 | ||||||||||
| Net interest rate spread | 3.46 | 3.23 | 3.27 | 3.16 | 3.15 | ||||||||||
| Net interest margin | 3.55 | 3.32 | 3.37 | 3.26 | 3.23 | ||||||||||
| Operating expenses to average assets (2) | 3.14 | 2.57 | 2.55 | 2.56 | 2.40 | ||||||||||
| Efficiency ratio (2) (4) | 82.09 | 69.84 | 66.51 | 68.05 | 63.67 | ||||||||||
| Wealth Management: | |||||||||||||||
| Assets under administration (000’s) | $ | 221,277 | $ | 203,723 | $ | 229,039 | $ | 205,087 | $ | 216,533 | |||||
| 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 | 15.89 | 13.89 | 13.79 | 13.58 | 13.25 | ||||||||||
| Tangible stockholders' equity per common share at end of period (3) | 13.14 | 13.75 | 13.67 | 13.46 | 13.25 | ||||||||||
| Number of full-service customer facilities: | 50 | 28 | 27 | 27 | 24 | ||||||||||
| For the quarters ended | |||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
| Quarterly Average Balances | |||||||||||||||
| Total securities | $ | 571,463 | $ | 445,696 | $ | 456,486 | $ | 468,707 | $ | 490,760 | |||||
| Loans, receivable, net | 2,772,518 | 1,981,101 | 1,960,099 | 1,875,458 | 1,762,995 | ||||||||||
| Total interest-earning assets | 3,384,548 | 2,475,298 | 2,457,812 | 2,399,212 | 2,282,391 | ||||||||||
| Total assets | 3,647,102 | 2,605,017 | 2,587,109 | 2,521,481 | 2,394,836 | ||||||||||
| Interest-bearing transaction deposits | 1,899,266 | 1,372,357 | 1,371,415 | 1,319,106 | 1,273,717 | ||||||||||
| Time deposits | 417,301 | 263,722 | 256,378 | 244,325 | 212,160 | ||||||||||
| Total borrowed funds | 386,578 | 372,240 | 357,171 | 355,639 | 365,804 | ||||||||||
| Total interest-bearing liabilities | 2,703,145 | 2,008,319 | 1,984,964 | 1,919,070 | 1,851,681 | ||||||||||
| Non-interest bearing deposits | 529,230 | 343,371 | 349,473 | 354,411 | 307,528 | ||||||||||
| Stockholder’s equity | 388,694 | 239,999 | 236,498 | 234,173 | 220,920 | ||||||||||
| Total deposits | 2,845,797 | 1,979,450 | 1,977,266 | 1,917,842 | 1,793,405 | ||||||||||
| Quarterly Yields | |||||||||||||||
| Total securities | 1.81 | % | 1.80 | % | 1.74 | % | 1.69 | % | 1.65 | % | |||||
| Loans, receivable, net | 4.40 | 4.25 | 4.31 | 4.26 | 4.21 | ||||||||||
| Total interest-earning assets | 3.92 | 3.73 | 3.77 | 3.66 | 3.61 | ||||||||||
| Interest-bearing transaction deposits | 0.15 | 0.12 | 0.11 | 0.12 | 0.07 | ||||||||||
| Time deposits | 1.00 | 1.32 | 1.30 | 1.28 | 1.37 | ||||||||||
| Borrowed funds | 1.40 | 1.34 | 1.39 | 1.39 | 1.29 | ||||||||||
| Total interest-bearing liabilities | 0.46 | 0.50 | 0.50 | 0.50 | 0.46 | ||||||||||
| Net interest spread | 3.46 | 3.23 | 3.27 | 3.16 | 3.15 | ||||||||||
| Net interest margin | 3.55 | 3.32 | 3.37 | 3.26 | 3.23 | ||||||||||
| Total deposits | 0.25 | 0.26 | 0.25 | 0.24 | 0.22 | ||||||||||
(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. 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 quarters ended | ||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
| 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||||
| Core earnings: | ||||||||||||||||
| Net income | $ | 3,661 | $ | 4,205 | $ | 5,230 | $ | 4,698 | $ | 5,133 | ||||||
| Add: Merger related expenses | 7,189 | 1,402 | 614 | 1,030 | 184 | |||||||||||
| Loss on sale of investment securities available for sale | 12 | — | — | — | — | |||||||||||
| Federal Home Loan Bank prepayment fee | 136 | — | — | — | — | |||||||||||
| Less: Income tax benefit on items | (2,311 | ) | (171 | ) | (173 | ) | (316 | ) | (33 | ) | ||||||
| Core earnings | $ | 8,687 | $ | 5,436 | $ | 5,671 | $ | 5,412 | $ | 5,284 | ||||||
| Core diluted earnings per share | $ | 0.38 | $ | 0.32 | $ | 0.33 | $ | 0.32 | $ | 0.32 | ||||||
COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||
| Total stockholder’s equity | $ | 409,258 | $ | 241,076 | $ | 238,446 | $ | 234,688 | $ | 221,535 | ||||||
| Less: | ||||||||||||||||
| Goodwill | 67,102 | 2,081 | 1,822 | 1,845 | — | |||||||||||
| Core deposit intangible | 3,903 | 310 | 256 | 269 | — | |||||||||||
| Tangible stockholders’ equity | $ | 338,253 | $ | 238,685 | $ | 236,368 | $ | 232,574 | $ | 221,535 | ||||||
| Total Assets | $ | 4,047,493 | $ | 2,588,447 | $ | 2,593,068 | $ | 2,557,898 | $ | 2,395,100 | ||||||
| Less: | ||||||||||||||||
| Goodwill | 67,102 | 2,081 | 1,822 | 1,845 | — | |||||||||||
| Core deposit intangible | 3,903 | 310 | 256 | 269 | — | |||||||||||
| Tangible assets | $ | 3,976,488 | $ | 2,586,056 | $ | 2,590,990 | $ | 2,555,784 | $ | 2,395,100 | ||||||
| Tangible stockholders’ equity to tangible assets | 8.51 | % | 9.23 | % | 9.12 | % | 9.10 | % | 9.25 | % | ||||||
| Net accretion/amortization of purchase accounting adjustments included in net interest income | $ | 1,267 | $ | 164 | $ | 177 | $ | 140 | $ | — | ||||||
ACQUISITION DATE – FAIR VALUE BALANCE SHEET
The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Cape, net of the total consideration paid (in thousands):
| At May 2, 2016 | ||||||||||
| (in thousands) | Cape Book Value | Purchase Accounting Adjustments | Estimated Fair Value | |||||||
| Total Purchase Price: | $ | 196,403 | ||||||||
| Assets acquired: | ||||||||||
| Cash and cash equivalents | $ | 30,025 | $ | — | $ | 30,025 | ||||
| Securities and Federal Home Loan Bank Stock | 218,577 | 361 | 218,938 | |||||||
| Loans: | 1,169,568 | — | 1,156,980 | |||||||
| Specific credit fair value on credit impaired loans | — | (7,256 | ) | — | ||||||
| General credit fair value | — | (19,069 | ) | — | ||||||
| Interest rate fair value | — | 1,982 | — | |||||||
| Reverse allowance for loan losses | — | 9,931 | — | |||||||
| Reverse net deferred fees, premiums and discounts | — | 1,824 | — | |||||||
| Premises and equipment | 27,972 | (6,249 | ) | 21,723 | ||||||
| Other real estate owned | 2,343 | (408 | ) | 1,935 | ||||||
| Deferred tax asset | 9,407 | 12,647 | 22,054 | |||||||
| Other assets | 61,793 | — | 61,793 | |||||||
| Core deposit intangible | 831 | 2,887 | 3,718 | |||||||
| Total assets acquired | 1,520,516 | (3,350 | ) | 1,517,166 | ||||||
| Liabilities assumed: | ||||||||||
| Deposits | (1,247,688 | ) | (679 | )(a) | (1,248,367 | ) | ||||
| Borrowings | (123,587 | ) | (879 | ) | (124,466 | ) | ||||
| Other liabilities | (7,611 | ) | (5,340 | )(b) | (12,951 | ) | ||||
| Total liabilities assumed | (1,378,886 | ) | (6,898 | ) | (1,385,784 | ) | ||||
| Net assets acquired | 141,630 | (10,248 | ) | 131,382 | ||||||
| Goodwill recorded in the merger | $ | 65,021 | ||||||||
| The following provides an explanation of certain fair value adjustments presented in the above table: (a) Represents fair value adjustment on time deposits of $1,024, net of reversal of prior acquisition purchase accounting adjustments of $346. (b) Represents accrued liability related to the Pension Plan. | ||||||||||