OceanFirst Financial (OCFC) 26 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Jill Hewitt	Senior Vice President and Investor Relations Officer
Christopher Maher	Chairman and Chief Executive Officer
Joe Lebel	Chief Operating Officer
Mike Fitzpatrick	Chief Financial Officer
Frank Schiraldi	Sandler O'Neill
Matthew Breese	Piper Jaffray
Sean Tobin	FIG
Russell Gunther	D.A. Davidson
Collyn Gilbert	KBW
Frank Schiraldi	Sandler O'Neill
Stan Westhoff	Walthausen & Company

Call transcript

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Operator

Good day, and welcome to the OceanFirst Financial Corp Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Jill Hewitt, Investor Relations Officer. ahead. go Please,

Jill Hewitt

thank Hewitt, And at for us. joining Financial Good Vice you President Jill Senior Officer and I'm Corp. morning. all Investor OceanFirst Relations

cause Please with We Risk contain statements. today Factors results including materially where release based actual Refer XX-K, forward-looking morning's and begin expectations. statements, many you call in from current factors our will statements our our this forward-looking that disclosure. differ will the to forward-looking remember on remarks other that of filings, could our to find these press you. public Thank

I over and Chairman turn now, And Christopher will the to our Maher. Officer, Executive call host, Chief

Christopher Maher

today. Chief Officer, Mike And Jill. Lebel able our XXXX you, Financial This to Operating Thank and am Chief join call quarter morning, by joined Officer, morning have I to Joe our all who second Fitzpatrick. been conference good earnings

you. able to As our operating always, are and we pleased with appreciate performance your to discuss our in be interest results

we'll key As and our a results forward we for the items, to color to has the look practice, add then your quarter some questions. posted been highlight taking few

earnings terms merger-related impacted which results of second reported the diluted by per million net expenses, $X In totaled share charges, Quarterly $X.XX. Capital benefit. for earnings Bank executive consolidated expenses, were of branch quarter, retirement financial were all tax of

quarter an XXXX. were those second increase over XX% Excluding of earnings share core $X.XX core $X.XX, earnings the amounts, of in per

June. expenses change the elevated compared completed as the as flat were prior in and as Bank wasn't earnings the remained integration Capital in Core quarter there loan portfolio, to much we

and full-time staff consolidation favorably the in as time, equivalents. of our New reduction to that operating forward, seven result contributed a second the trend for XX to Greater costs Going of record in year. York, are At have sell Metropolitan the efforts same totaled tailwinds, expected with sell combined the the branches a a pipeline. are of be performance deposit bodes what to and well appears loan These traction flat gaining Philadelphia expenses and

declared Regarding a dividend XX% quarterly $X.XX, to capital a cash capital growth we variety earnings, opportunities company's the to represents Board XXth as of $X.XX That management of levels core of capital dividend cash us the allowing payout quarterly for initiative. build pursue the deploy consecutive that a quarter, dividend.

have the As throughout equity at shares to was XXXX XXX,XXX price the markets program. repurchase this at of under weighted-average a choppy share. been per times year, repurchase $XX.XX shares company remaining existing XXX,XXX able

that for year, have presents bit half quarter may share we second repurchases consider increase expanding efforts position on organic focus program as we company if to solid of the expansion the the capacity put a to Philadelphia pause earnings and us The the the half the Greater Bank, year. of in in second opportunity matured. of the a and presented integration New York ensure repurchase The Capital second itself, of the Metro

quarter, With are during made half. the second for the progress well-positioned the we

quarter. deposit the have high the quarter, third interest quarters. income quarter, And that signs margin interest we also moderate. Deposit opportunity the to a more net for the were the steady in cost growth trend for during than net in costs to more there we the outlook are expected near compressed or While bit at positive expect watermark throughout we cycle. improve we a are that loan With coming

of equity tangible X.XX%, the points second XXXX. of core than basis in XXXX. metrics core ROA of higher X.XX% performance second XX than basis on competitive XX.XX%, highly common XX posted return points the And level quarter in the other higher of Our the remain with quarter XX.XX%

common second to quarter points assets, X.XX%. company's from the Comparing equity XXXX, total tangible the X.XX% basis balance to increased the sheets to XX

to book $XX.XX, also share per value $XX.XX from rose X.X% tangible While a increase.

basis XX points from period nonperforming points addition, of XX to the decreased basis time. just In same over assets

growth demonstrated uncertainty. strengthen considerable While of balance earnings in the we're a second year, the period improvements to half of sheet the discipline economic and balance forward looking we've to sheet during

quarter, economic see the expansion. no last to near-term current As threat we noted

However, be surprise. discussion turn Lebel regarding downside prepared At details possible provide the of the to a this it's prudent I'll development business. for our more to Joe point, over

Joe Lebel

our Chris. significantly the our at been Year-over-year, pipeline production the and by highs, outperformed driven in all-time for more Thanks, York basically part to QX gaining quarter. acceptance. market our quarter, traditionally Greater traction and flat compared XXXX. Loan originations regions Metro we has quarter as was weakest And first what importantly, Philadelphia, New is

quarter of million $XXX was and above last New $XXX the quarter, At million commercial regions. from the Philadelphia included million $XX end, pipeline and York

last $XXX from to of pipeline million York. $XX night, including Philadelphia had million increased million, from $XXX the As New and commercial

we of progress remainder prior we for and newer as bullish XXXX our discussed backend remain the to earnings As had momentum that to the expect loan we the and originations calls, pleased are in for loaded see the be year. build regions

bolstered loan residential has solid to Strong results. the and it pipeline, continues deliver environment

of participation On the second have disciplined in approach hurdles. acquired loans the renewals we our exited the and not does meet our quarter to restructure due over that for credit from continued $XX credits borrowers amendments to requests front, pricing million in

credit sheet to we loans and our meet our opportunity don't recession, standards. with the enhance While uncompromising we expect strong balance value pricing near-term the economic that

President we announced Philadelphia earlier Greater Philadelphia time quarter, recall as Regional the new market. banker may addition You Svizeny, of for Susanne long the our this a

and to are have of caliber have begun momentum. She already and leader pleased We to build team Susanne's her a pedigree.

balances. business deposits. deposits to overall the government Moving Seasonal fluctuations and in impacted

increases versus some quarter. of are points we have we from To-date, capital the that on size X moderation only sheet. costs benefit basis X deposits, are of increases the the retained OceanFirst loan Bank While of increased opportunities clients the basis in deposits Bank size XX% our in larger overall and points dollar with last Capital balance saw cost seeing

given treasuries used the benchmarks purchase as impacted contraction a X slight the borrowings. we term our by dropped X points. NIM for experienced accretion assets and basis the earning challenging also NIM rate Yields points further by loans, reduced was As on we of external commonly forecasted reduced on basis environment accounting last hampered quarter,

operating expenses. more for the quarter quarter. Greater the to of additional Bank branches were were footprint buildout Metro Capital closed trend was third the York early in acquisition to our increased in Philadelphia, of the and should branches The Bank the and in June systems compensation legacy related Moving as New this three addition four and completed, conversion Capital closed

over call. With I'll back the to that, Chris it the portion of turn Q&A for

Christopher Maher

Okay, thanks.

Joe be would point Mike, I your pleased at this So and questions. to take

Operator

Instructions]. [Operator you Thank

Frank of Sandler come go Please from first O'Neill. ahead. will Our Schiraldi question today

Frank Schiraldi

the I with NIM. wanted to

quarter? I go I by contraction little deposit moderate costs contraction, side but understand So bps guess makes purchase yields you and But continued were to the was quarter. more of in think down loan linked surprised mean just deposit but if didn't linked the it I had up level about the bps bit on in -- X or about you X wonder is bps X yields loan sense, know I quarter. a could talk I accounting accretion, I the

guess base. that some is I LIBOR that of So

more you loan the If bit in on just little color give yields? can a contraction

Christopher Maher

the Frank, what's year say the seeing, the that year some last markets, are rates happened is the far this last, the been and loans, so the XX look year. is long-term on estate impact the -- five that market real be over for we so have five two or And what has which dropping tied the year. competitive think to to in commercial if that I you at quarters,

-- having a Joe seeing pullback was of When you shift. putting we're on think it's dramatic as prices can up little anything able overcome, loans, So stuff those get quarter. about think having we not in and I couple with a further that's little being the much and persists and on of don't and growth you that in I loan during the the some bit We to talked it not pay the round new mix downs weren't year.

it's year. rest think going dodge of something the don't for that's I us the So

rate position worth a of floating interest $X Although, we risk do have million run rate we very and balanced loans. about

our headwind have you timing issue we down in side. $X the have reset see make if be may a rate may have the the that up certainly we'll there is this to costs but as pull you quarter, there where billion you little finding So funding Fed out quarter decreases, overtime, on

up all not that to make get the in first there. You may quarter

Frank Schiraldi

that in is But mostly LIBOR? as opposed to billion floating, prime is that

Christopher Maher

It's it's amount both. the It's LIBOR, than prime LIBOR. a little of a but more fair

Frank Schiraldi

some fed the So cut, I well? saw that as front rate ran this you quarter of LIBOR so guess

Christopher Maher

Exactly.

our may the production So that key bit I Joe's we comments that's a out quarter. about is, to though in there. have some more having think But of of this little and

still And they're yields on are a got that. pretty bit down production, on good the new little we've Although, spread healthy.

be that the don't assault like under or to we anything So that. think going margin

maybe together. a as Just little pulls timing weak the

Frank Schiraldi

you if guess or if And think -- action just about the replacement assuming action, think and a for I about second, fed fed we about rates. forget

yield, gone, mean, end expect what Philly yields happened the given five that about new loan in contract balances curve mean the has and you loan just to I the So I gone would put where just thinking average quarter. York? longer where New and years say you of would this quarter-over-quarter as you on

Christopher Maher

you're to expect a growth, little that anything of be a like although, if overcome and to And contraction. which your don't maybe contraction NIM there. trend your see income in had but sheet positively the to net margin second half of a the bps. see going double-digits down could bit little I able We it's we couple could see the of or you that balance year, think in interest

Frank Schiraldi

it moderating? another you quarter? of And could moving do terms deposit deposit deposit down then, have in the message second quarter costs higher XQ be that versus you flattish, of costs or but average Is think costs. Or the

Christopher Maher

more pretty inter-quarter seems flat. The were numbers It flattish.

June I fact lower think something. basis X been or point In might have

the forwards saw So, quarter, flat. first had changes in they the I you pretty the that seem so happened price carry think

book. traditionally fourth up change to them more up quarter, seasonality the other of and pick thing that can Joe and borrowings pick the deposit what when that's happens mentioned as third The third deposits in is we be well. We start our favorable and in deposit the can quarter

be overall funding better. the little will a cost So

Frank Schiraldi

loan just about back thinking in pipeline strong. growth the very looks year, of then the the finally And half

the just the million $XX I at in near-term here, need, talked a it the given color assume like But us past, that. give that $XXX a front. if loans or I not about mistaken. I expectation that in little seem the of net could if would to you you're least I'm bit thinking towards on growing the would of guess of million quarter, you've in pipeline, think And higher-end

Joe Lebel

new the regions the Frank the online. some think in talk fourth I given bulk second million just quarter in And coming guidance think I of half came growth hopefully million have end high to as range we loan the of of we about of towards the well. the and think range, and $XXX in third the $XX as trending I we're definitely absolutely year that

Frank Schiraldi

about of thinking when that, And downs, think that about that's You're net pay growth? you right? net

Joe Lebel

Yes. growth? Net

Operator

Our Jaffray. next Breese question will come from ahead. Please go Piper Matthew of

Matthew Breese

to of the hopes perhaps I the into yield and the of comments wanted challenge Chris, just dive with equation, understanding. your loan side but

As little well yield I you're XQ suggest and bit the were quarter release, still they a this XQ for at basis the in points. provided your XX pickup, levels. And down origination the while quarter of off look pipeline

points? Was commercial points gain the noted couple or curve, there, is wanted And side, the that to; to compression. just like I reported? more some as it Seems one, understand basis so didn't so, a of basis follow some spread of yield in perhaps happened core compression. what down there you perhaps XX NIM And then particularly

Christopher Maher

I'm about? sorry, that, compression part the last you're the asking of

Matthew Breese

Yes, of reported? you'd core in your mentioned that a of in perhaps replies NIM the that near one basis points term. of Was compression couple or

Christopher Maher

core. be would That

we're going of or have against X to the basis fighting purchase X always accounting accretion. points So,

but a So we overcome quarter, or X, core. can in probably I was X that, when good that's talking the

it One, with your fell rate so see that comments versus instruments. lot to fixed to about the originations A yield of the of the them think or has much. floating changed. do of mix why I

estate So, putting what floating more rate real we've swap. is achieved been in do, putting, we like through stuff which on, we even we've rate we floating

But floating So little a the balance down better mix come we bit. as run. got that changes, the the long think over of a sheet fixed may yield have absolute we versus

down that the beginning you XX from I of I think also to at of was lot end look the treasury think quarter points, year underpins the real of deal. a five commercial quarter. basis estate the And

cut rate with well. as fed even the think think I So, don't I -- the fed

So you basis stuff, have of percentage quarter. The XX floating rates close higher average we did in that a the down was combination points. of stuff probably a rate on fixed to the coming

So to I But that's persist going year. watered that for bit. remainder are down see a of think don't little the you the

I to I those do. XX moved have think cuts the don't five the And to going the see XX fed and longer-term based cut is and five in fed the about think or and doesn't what in year, year July dramatic expectations the going the on moves the in year. you're later whether

I we're in to not So drop going think originations. a persistent have those

Joe Lebel

for we of thing there, core, item. clients the municipal them lend this a other needs, seasonal the short-term the We XX Matt, is is the short-term. on the loan lot originations on funding and have had a

come will X% off, receipts less at it So we August. for just and days XX that pave days million XX their $XX funding, in because about had than

the so it’s to that bit an that's respect. But in drag So that of that XX, really yield a anomaly combination. down

So little trend where yield that's where you we third see is, is the XXX, the loans bit so in quarter. pipeline be a closing the will

Matthew Breese

this can get is timing a back difference NIM perhaps the of deposits. versus tying that you you outlook, just yield loan out noted and compressions into what there NIM between And

there. where appreciate If happens? when it two And find gauge just three do give of, you of level? color it of north call some a quarters or of would I Is over it, could really that stability? that us And we NIM NIM point core still a seeing quarters? you the is XXX. Where

Christopher Maher

thing a I important have the think is most we business around lending do, strong relationship NIM. that models that engineered the

So XXXs, of or or and depending that have set being that's mid-Xs, that when define maybe a something XXXs circumstances. that XXXs as would -- I circumstance in great the like you on or XXXs

in I that. are going bouncing think be around we So to

anticipates think rates quarter I anyone think the a two. up only fed the don't or times. is cash cutting X I

I think balance I I the think naturally a Then you to improve are yield We'll have maybe to be we the cuts you then bring So XX two get you NIM little And on on scope delay, overall think rate growth down thing costs have then day deposit stuff. one good is to that. rate absorb the closer or of for sheet curve other the more put on the and that company. the you floating fine. will

have we we're we're -- NIM shop have So I a think we shop, wind and well place we NIM to of up shop. into -- a think never don't but the to we're that's been be a Xs, going persistent going X% X% don't not I in

Matthew Breese

The other State been that and does rate. from what for tax recent to changes, corrections just New is tax technical the the There's the remainder wanted of the outlook you was touch thing some How Jersey. impact year, on the rate and I of some XXXX?

Joe Lebel

bit the of a including little was there quarter, an So second increase.

part to slight of You in related, or see state rate taxes. of Most to was XX.X% that increase up was effective that from the XX%. went related

maybe the now should a XX.X%, touch but and So low so XX% not it for just what XX%, than more is a in year, impact. big this it

be For an of next year, will there more impact.

about anticipate about XX%, probably state we and for ended impact. X% we So the tax in

Matthew Breese

do you down there XX%? that good a that's that are to forwards or beyond And carry think level are XXXX, loss bringing

Joe Lebel

muted somewhat go will the the no impact this assuming towards we cash less there's -- that's keeping the effect full this NOLs somewhat -- number so away next NOLs Those are year, what's year. Well, year. be

a Although, bit might to say. over we little carried we'll get have

full the be impact. should XX% the So

Operator

come will from ahead. Tobin go Please The [Janney]. of next Sean question

Sean Tobin

you in Capital also near-term? any you, you getting potential systems the would deal I'd on integration or how of guys a updates whether the I Bank And your not the look you then front, interested now guess of the out if M&A be M&A on at have you another consider behind in that can us acquisition for Thanks. road? remind to just down criteria start

Christopher Maher

we've XX% by the the out saying off indicator Bank our That important whole integration completed. I'll is to bank us. we're And on think pleased for very integration. retention pointed very fifth as pleased, side, really be which I got deposit start very, will that Joe Capital have

that. to us feel time, So, with acquisitions we over There additional including good very now. no making barriers right are

actively execute at And the are market. we certainly the we we on right it. in things looking have So would if opportunity,

To way New all meaning relationship based your we on second important That's in New question run our very that an think want the about thing banks. what's York, commercial first to the is important us shops really Greater we acquisition, focus Philadelphia like I geography, and Jersey. to Metropolitan quality us. We do to

opportunities is on anything within else. prioritize focus our more circle. than we that So earnings And probably

We to can strongest the earnings is our shareholders the think contribute by strongest that value having time we platform. over possible

the would quarter been then we this performance XX%. our or any tangible so expense ROA little to that be of So a larger. allow prioritize strongly to as things we up core that build contribute ROA. being We was give return of The to just improve save We've on a want earnings to able criteria weigh We to we at X.XX%, opportunities, was look things, maintain us And discriminating. the don't the for our little that. sake post company. have

make that The run fully company would to we're prepared other without I this is any comment M&A.

perfectly got pipelines if as Joe walked things through we're growth, the the think for outlook way great the So there. metropolitan happy in that's We areas grow organic out. I just to organically expansions think we've and a the and work

Sean Tobin

of the in nice noninterest-bearing new to that? affiliates saw New and color what new you you teams York? in on the little a relationships us Was from some switching guess the I uptick then deposits. give Can And drove that gears

Christopher Maher

take of productive, we're C&I been that space. better think have advantage Philadelphia opportunities teams to, able especially in new in the I where Certainly,

while and happy cash more fluctuations things wave corporate So accounts, have about the like producing it's it's of being the just quarter-to-quarter fluctuation added. you management or any been treasury they we're is really would big than services, have new seen, accounts seasonality

Sean Tobin

you run And wondering you'd if say, consolidation, than in number year, would even another the helpful branches could you to then close I next further on goal know out go branch mind one at to that that, the I you plan a four the was total just be the more, if had just full or want for of mentioned too? quarter. branches was for

Christopher Maher

that's to got hard with time. in all we is our that's that number market as industry And our to value will very in to visit to an branch, for how think as branch, to customer to the we you And retain on a a quick is continue ask I I a that. it car. than fewer our where though, that into it's industry ourselves if our be ability branches. about question good changing think quickly intensive put surprised a customers especially coming all other excellent relationships I things get you're purposes, say,

getting the doesn't miles you to or or car X and or car and to you're us. whether you X.X if X mile into branch, matter, driving it's a mile mile X.X came in So got a

that. there's be we're to going to think envelope the around to continue I opportunity. going push So And additional

the relationships there's in sensitive those new have On new open be relationships that the with people that other a a hand, branch. majority are in opening our bank, of still you to industry,

millennials, groups need they incredibly purpose about, generation. get they including important relationship when their serves a branch ranks an new access issue. about desire to also an in resolve where in to have branch all to It consistently can the around demographic So

think through feeling I it. we're our So way

the very going we're pace with we're happy think at. I

high. satisfaction Our remained customer scores very have

think I in have we're But that a northeast. have of certainly XX our shy. deposit be this With consolidate -- think the very maintain profile one branches to will So we've I we best not base. I will continue still mean, and well. robust balancing been we deposit the

of our deposit has high have not it base. to So impaired a quality ability

a see hesitate are transaction that's it, and year, reevaluate would than But it, So they look would what you once are are, trends I doing number you're doing, that they a though. dollars going the more tell to more, I what I customer to at think where our something on are put where we deposits.

think a it trend. I term expect to be you long just can So

Operator

Please will from from next Russell Our come question D.A. ahead. Gunther go Davidson.

Russell Gunther

questions have And of deposits purchase amount the a funds, year? fed the have be of around conversation assumptions then of would you margin half indexed earlier. to update interested I'd back any to ticky-tacky I the any? for and had not there if that margin your to contribution the we is be the whether couple or accounting to know

Christopher Maher

very Those are two questions. good

went effort concerted an a we question, through to external back number first all of The de-link deposits index. years from

managing maintain the index. cost we product do So not important an the went external was to that's set --we of a of linked a through don't cycle. rising that have we really rate And part deposits as our

that. we a have So don't to exposure

down, to On to have the our bit, then, come going negative to if because side own those index. we're index a linked we're little lag

that. that's So

Mike the loan In NIM going I'll -- side, chime to on we terms and ask of where are in in. the

Mike Fitzpatrick

on big accretion, And QX. not year's decrease QX from declined a so your and $XXX,XXX be quarter, QX It also modest. could another headwind. in $XXX,XXX it's rate To $XXX,XXX a is then about question it's the about next the the in

Russell Gunther

happy read running to Philadelphia Greater for I and then very was guess Susanne's hire about guys. I And you

other Just or of year? additional any in or were teams half the those plans York in New the wondering those you any to teams to the folks back there Philly Metro in quarter, if added to add

Christopher Maher

just we today We'll team through have over see are as -- Joe of that how you time. walk they kind the and

Joe Lebel

added both teams. So we have folks to

by well. other we another New added Philadelphia in folks as and another competitors, especially. added TD folks added benefited hired the have In there there early we folks Dan's we team So region, couples Philadelphia that so dozen to about in York, now person from up half region Susanne especially on of have we've

we'll this as to So, the additional add any we've well, continued to them Russell. have we teams both build stop find plans talent, to if solid don't teams and

Russell Gunther

rate, the would from going last then on question be run And forward. expense me

relief the for just You target? could trend million you you'd some to core ratio could on perhaps XQ. of was the that year. that if expect guys And mentioned where maybe any half an get XQ, back wondering us I $XX in in size update efficiency up

Christopher Maher

Yes.

expenses two quarters. expect we trend down to So next in

legacy We And cost of phase end from from Capital, at some have phase then the the saves employee of OceanFirst. branch from capital the quarter. branch exiting the the

So second have from increases and fully build been we're York going quarter. within the out incorporate that, we the into some New Philly to City that

probably $XX next And million about maybe $XX in so, we million think about core million this quarter $XX.X and going QX QX. then down quarter

Russell Gunther

And be into look and What and an early then is we target to tax is efficiency as it will margin rate. too out XXXX? ratio XXXX core higher for digest after a you pressure

Christopher Maher

think NIM the towards have the the is as single going of couple questions, up we which going over biggest to contributor wind that's raised curve I well And loan a the that is shape ratio, yield efficiency determine time. important down the which growth. most up on the to side you as points basis or

So it's I too early. think a little bit

changes get path see closer ratio, get to down XX%. hoped certainly all I we the that. The a take we XX%. so on it that longer XX%, longer But rate tax glide XX%, big you'll to ourselves towards tax still think think there. I trending may doesn't affect may efficiency and to take us below But the have impact a us I that, little below prior XX%. to us that a had now it to to see get won't

Operator

Please question Our next come Collyn of Instructions] will ahead. from go KBW. Gilbert [Operator

Collyn Gilbert

once see expense being back follow-up realized? Mike, What you growth everything just in this Do all you the XXXX? in of -- year, sense the half expense comment. of a get on phase in have folded could the we expense core a here

Mike Fitzpatrick

fourth into little compensation quarter, cost we're million. that. phase So over and but things $XX then that There's to like increases probably annual QX, a said I back carry about bit of

million range bit first is where the So in or we'll little that's higher. maybe be even probably quarter the at looking $XX

Collyn Gilbert

no growth I can really core -- expense you that no line -- then it. So imply XXXX? that in does not flat think

Mike Fitzpatrick

I the just Well, was into first quarter. looking

merit that phase little compensation be a of nature. and quarter, carryover first increases things but that'll offset there's think into I bit of by and annual the increases

QX a other see million. next another $XX than year, maybe and structure we'll -- So increases. to mitigate at then we'll would take be try And probably bit the any look our little brand higher --

Christopher Maher

Mike's think this on new about if make, York we Philadelphia. Collyn, it of we nothing we need be investments net terms think in for the and add those. I'd can significant doing for scale along you would that, also there's We done of horizon we've New to comments year to what that that the grow

person You kind we're again need those might next things always security year. all be adding and in, a cyber you that but or two, not starting of from stuff. invest There's scratch to like

the line add is is add a couple So major bucks, quarterly going item pressure, there's a wow, this going to million expense rate. to little bit of but there's million bucks a no projects the that few say, we'd to

Collyn Gilbert

And I give missed gave in and XQ. But this for Mike, this. expect quarter was was XQ. in what number? what dollars then, you reduction you for sorry to it said that XQ the Did you actual if know accretion I the

Mike Fitzpatrick

It in $X.X QX. was million

Collyn Gilbert

core -- guess guys I have higher you segments? and sense in of a a then can what one internal account terms NIM. in declining are still higher we your moving thing. flowing of is But a fed through? just encouraging, risk do account consumers some paying just the all deposit Do And offering the of the into rates base as cost within type thing migration the that of dropping of and It's you see and risk to is

Christopher Maher

that. in see big a We don't risk

them have regard. at of had we don't side, really sides both migration were deposit to seen base, the you not our look the We consumer go that If to accounts in to. significant on those for

side So consumer to the don't going that. I think is see

already made migration. we have On that the side, commercial

to the we internal cash So quarter of OceanFirst. through else, something there and run. they to had where of fourth some clients out at here them need conversations series to what And of quarter incenting first in XXXX alternatives sweep XXXX instead with worked sat provided them the treasury a it our we we with

we So the of those those what We've restructured majority happened. to vast conversations do. do to needed

hangover, So forward. a think I don't that's going

Collyn Gilbert

quarter the And goal too think I performance I growth, organization maybe growth saying where supplement targets now you structured I not then organization. asked EPS case that But a XX% and performance think whatever need by rate. comments And M&A would just you Chris, then mentioned the taking and intrigued the where last you'd taking be back again and you've your a that broad are this finally, thinking or step would like about might in to be.

Just the I do it given having go really where starts here backdrop margin, and you're and bullish like you additional without EPS this to the growth way. despite from are M&A able maybe XX% but growth, mean wake can you it in understand like on backdrop to I the growth along loan not certainly sounds folding up of feel be in? fits EPS achieve setting better the of

Christopher Maher

on think organic confident side, feel EPS we build I the that way. that can we

much organically at it consistently XX% maybe building in to this just do too Now environment.

growth next that thoughtful or can year over have keep bit risk it are need well. better if that. steady don't even see we think The We two, remain comments of look to of can look do numbers trouble. that can prepared we say this And organically, a economic do know in we is, it at ourselves been and disciplined -- as little just could we that trying terms we change. the think other can EPS if Certainly, stay mentioned one produce we that that acquisitions I tomorrow. big to acquisitions in But I any is we our we trend quarter-after-quarter, do very market and thing do don't set building in out we down

not in jump not we we're the But at steps economic this in going looking where the going to it or EPS regret to point -- if we're a the a are took two we year to is turn there to cycle. push year

way building steady play think you've we've value. think book why that's balance is equity -- up. We're We seen So the we protecting tangible tangible to built sheet the common it.

a acquisitions that's we of really in organically. X%, the do environment comfortably range that maybe changes. remains can if will supplement but XX%, get a EPS over deliver company way positioned both We well are to that X%, improvement, X%, trying X% but that, do, the still We maybe

Operator

with a from Please question ahead. Instructions] Piper go Matthew follow is [Operator Breese up next Jaffray. Our

Matthew Breese

do see could I basis of out have you margin more then hop the to to points In back appreciate if get happen? core allowing me of expansion. go couple now. more take Chris, had but to what If you expansion you What right a margin I go. your order of you compression the NIM. of oppositely, need were guess in. here, from we to would And to you would expansion had back maybe curve? perhaps a dynamic some how than expect mentioned perhaps we to view contraction,

Christopher Maher

of the to depending I cut sheet us be think fed by help fed So or the conditions rate little cuts. fed we've got maybe view. looking let's be action on point positioned just would for pretty that's one no I your either are, or guess because the you neutral. say, balance Less just more would rate A

come cuts price through for those of .We're going bit to that pay So little a that. a

So determine And on is of this. fed weigh and where can reactions I going rates the actions to take then go, how quickly short-term number think we markets' the the grow. we

come different. could outlook the down can rates but very continue grow to short-term faster, be if we So

variables to I Fed rates So projections. those together and combination we what look and does our tend them and it's the mixing those rate do growth think cluster. a to, how what projections of react them do is Those at

So range. up have two favorably to things we're for as And the But fall low absorbing us. the tend loans certainly in well. competitive a be down wind to end, maybe pulls and similar fed end, on high that for the to increases in more be they're to all market seeing rate

Matthew Breese

for $XX million this ceiling year million, million, period place, because floor And just that you thinking $XXX growth $XXX of end there's expectation? the the million the about team feel a then think a that But in for rate. can to team of time loan or $XXX year? if longer to in become and established, place you XXXX see million the we next year? $XXX of of getting perhaps, million And in net period Is obviously, about the near-term about growth you have for $XXX the ramp bullish and high the

Christopher Maher

side, runoff that's about. off. and say we taken the run the to loan Yes, the not I it's In the might be opportunity, would markets, production certainly you lower. do that that We've bullish that participations possible. might to very interesting, feel alluded we Joe allowed worth and $XX certain of million

things have that. the bit the United ability the a market is market a we same need little So, metropolitan I there. think favor at terms that we largest largest think Philadelphia advantages one in the States, have to in access in of and trends company like and the I time. sixth MSA great capacity But productive We of as is of

much to every those there operate not has aware are that ability I'm in And -- bank markets. very the

are the We those pick of based ability be to company in the each markets. we also the want which have deals of on we choose size to and

of about of So in much a growth both capital. we those that in areas could is and we're access are responsibly part growth got if just Jersey. the our could Southern well, the The economic both doing we've presence good, be markets larger Central in rates those rate than do of thought ever we feel establishing conditions New

competitive loan yield outperform We're staff we the a So we the the have right of have those of to at positions. possibilities. we've with quality it of added, both could certainly And opens curve. markets have wide growth But think disposal to up in side. our and the right range to have going the I

Matthew Breese

in do And favor. not then prepays work your

common XX% offset now. loan we You buybacks? do have with How see tangible aggressive growth might you to slower close

Christopher Maher

alluded I the expanding comments we're in buybacks. considering think my that I size the of

So all us authorization buyback math at to market obviously, we the periods we year within dilution back to exercise. tangible view earn has we've it. as that demonstrated this that that the And window. have book And that. a the and look about operate for and we And provided opportunities

good The in plenty of have is capital. balance We really shape. sheet

If look very non-accruals, at the we're pleased where net is. you and charge-offs company with

into if the depend have conditions. on buybacks market it's really going opportunity. we So to we But go can

Operator

Our go Please Sandler a is follow-up from O'Neill. question next Frank of Instructions] [Operator ahead. Schiraldi

Frank Schiraldi

looking buyback know bogie what I what It expectation get we're just as a actually, the bought aggressive might year-to-date. still where back had that's or where well a seems the you at more thinking you follow environment right up like for about. on you decent think a about you spoke about knowing you've Do $XX the math reasonable or now? under be

Christopher Maher

starts I we think outlook, and confident it good about we pretty are with that. how feel longer-term earnings about

this the we ratio price at, the a the think back So trade we've earnings decent price prices been bargain at we paying, is year. we're buying

confident So at level. in you that keep are to you're if buying going earnings, your

in we from And time-to-time. so, understand our that a favor at sector comes

fall if shares. So sector pull the out and is those back favor bit cost-effectively of and multiples we can little

have a than us allow existing repurchase We capitalize higher our much on. would capacity plan to

being got if way. do so So in that's head and authorization maybe We've we're that position. a being it, dollars adding market thinking about to to that act a position conditions the to how in

Frank Schiraldi

it to capital you'll And about you to position, your if say, build think continue you special then given were it. what like Just dividends seems do here?

think well probability? guys low something that as that you about is buybacks? So Is as

Christopher Maher

we our We our and References disciplined so get the over there. pretty set for can past special and And to do we owners see have six kind did if of to is discussions you thought this of about and with shareholders dividends great it. the seem or institutional reasons dividend a the favor. and that it regular months buyback buybacks about the primarily,

the increase there. give and positive EPS, has a opportunity So it you momentum to

much capital, So growth excess as we in of the how we an can out initiatives. terms build we get things potentially prioritize through how we will see

long-term, have or build to be capital, if a next clarity was into productively not consider a to is really you and buyback. buybacks. year regular continue dividend. economic it. environment, as the more CECL prefer buyback you've we for it special get providing behind We little But opportunity thought market growth, there got certainly deploy dividend and lower a you, the you've in repurchase Once you can excess that around you But priority got than no would then that capital we would and ability the

Operator

[Operator Instructions].

question Westhoff will and next go Company. Please Walthausen Our from ahead. come of Stan

Stan Westhoff

they last or or to quarter. missed just quarters? downs maybe last I elevated Were they wanted quarter, I in more the something, than -- during couple the pay it were of

Christopher Maher

No, I think they were similar.

And elevated. not non-stabilized being of covenants, a some larger the continue some and do in take lose certain us this say see point to things, for on where do which exit us. financial uncommon of particular additional those are We a in wouldn't for whether in it'd take opportunities be criteria some most we are of did the lead on just couple I asked of that in to didn't that we Although, participations, little an opportunity proactive to at of not cycle, pressure to form stay some it. transactions banks opportunity provide meet exit provides instances those is they're and dollars stabilizers, but advantage the to credit return in equity. projects of us to

Stan Westhoff

entirely. last pay lost accretion from be -- done any here. refinanced some you've impacts were mean There there Is some downs? that had Was years the I any obviously, few to acquisitions probably over there

Joe Lebel

Yes, there accretion. accelerates the is. Actually it

real big a something because or number from up a mentioned payoffs So of that. thousand -- have at and couple spike a that accelerates pay time-to-time, the last happens of I hundred some earlier, bit but a obviously purchase you bit numbers. fluctuate where accretion down, we that's little little accretion, of as that $X.X And not a and like we're the it's accounting quarter volatile million in might

Operator

and remarks. CEO, closing time, question-and-answer At like to session. Ladies over Chairman Maher, and Instructions] gentlemen, this will for turn this conference conclude [Operator the our I'd Christopher to back

Christopher Maher

call on the to like We throughout Thank year. I'd look this that, for participation everyone morning. the updates With additional your forward to thank you. you providing

Operator

thank The We you all conference presentation. now attending today's is for concluded.

your You disconnect may lines. now

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