OceanFirst Financial (OCFC) 1 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Jill Hewitt	Senior Vice President and Investor Relations Officer
Christopher Maher	Chairman and Chief Executive Officer
Joseph Lebel	President and Chief Operating Officer
Michael Fitzpatrick	Executive Vice President and Chief Financial Officer
Frank Schiraldi	Piper Sandler
Michael Perito	KBW
Erik Zwick	Boenning and Scattergood
Dave Bishop	Seaport Research Partners
Russell Gunther	D.A. Davidson
Christopher Marinac	Janney Montgomery Scott
Matthew Breese	Stephens, Inc.
Don Koch	Koch Investments
William Wallace	Raymond James

Call transcript

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Operator

Good morning, 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 ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jill Hewett. 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

Please with We risk contain today factors forward-looking including release differ based statements. Refer find factors you. forward-looking that cause morning's and begin materially expectations. statements our many call in from current our will will where to those statement our Chairman and I this over forward-looking you will now disclosure. the Christopher Chief to remember on remarks XX-K, other call that of filings Executive to our press Thank host, the And could the Officer, results turn Maher. our public

Christopher Maher

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

appreciate be the will outlook we financial always, provide morning your we operating and cover our discuss performance regarding color some with and This for to results for accompanied Please performance your We those that our that business. to As release a taking this operating call. company's earnings during and able pleased you. slides in we to quarter our interest slides our the are of forward set questions. may discussion, supplemental are was look the note on to our available by website. refer our After

bank our trends, Core pickup continuing interest economic earnings traction. and the earnings loan quarter. were Earnings a In second a with GAAP net gaining expansion indicates quarter $X.XX, commercial the terms that quarter, share earnings another diluted financial is strong demonstrating in company. a GAAP of per for pipeline approximated income, the this credit banking results reflect committed modest improved recovery for

common The The quarterly $X.XX depository that dividend common the declared share share $X.XX at remains of dividend preferred more will earnings. conservative cash management, trajectory dividend $X.XX year ratio The per later as per earnings represents a stock. XX% cash capital the evaluated established. consecutive in be dividend. common company's share share and XXth share a of the post-pandemic approximately the quarterly is of just dividend Board is Regarding common payout

the tangible value have a assets quarters, exceeds three Over past equity driven stockholder's increase robust to X%. and $X strong tangible share. earnings remained in Tangible per book now

low almost opportunity positive points a cash end. for Our business. provide sheet over balance sheet XX carried trends It at incredible XX% of by inflated just should an time. balance all-time quarter decreased of CDs Average to to in XX accounts. decrease decreased rotation point. remains bearing have a $XXX points in CDs costs On from quarter, million. high-cost the to by year-to-date non-interest-bearing purchasing basis, deposit Much $XX.XX. share a and during price to is million of XXX,XXX company by quarter and ended basis the costs $X.X continued activities with linked or direct our largely were the quarter second that points at result at build replaced purchase average increased in as the is non-interest $XXX XX cash accounts basis basis earnings the weighted excess as deposit entire shares we billion a have The of The

the base. repurchase of current additional for available the X million slightly quarter-end repurchase outstanding million be the than program, X shares a During X.X% more authorized to capacity leaving an share Board to of quarter, a or added the shares

outlook for I'll discuss spend we conditions market reviewing a the our our operating areas. business, minute in of Before some

and products supply where in Clients Manhattan of York to throughout geographies for strong continue City issues client conditions strengthen, notably base market to best services New second to report activity. in chain our metrics. our with show continuing delinquencies trends demand be the During one economic restrain begun other record output. by quarter, on labor of and Overall, has our local most signs season shore The levels record. credit the of indicated as an the to financial positive be as continues all strongest to low looks position New excellent is Jersey and Shore

Business employees and exceptionally first set Looking month efficiency. have time back-office internally, project employee has our decades. advancements core resilient, upgraded also for earlier the a for having completed additional conversion in the our that That this Process been in Automation systems stage infrastructure

the schedule without client importantly, well disruption. conversion More and of finished ahead

us core Country In the addition Bank important the allow final transition project. application an modern this systems, efficiency redundant the to achieve will from systems said will core long-term remove this we in the to benefits that September, bank,

at liquidity, deploying efficiency. administrative and offices on New our Investor online. remains these focus next in Day and forward complete improving on our building capabilities, available person efforts will our for Jersey more To Bank, event will in we context digital provide be The Our Red also event a be an available areas, holding week. operating

So many we of can join hope us. you

the a of growth, efficiency point, XXXX, past quarter, on bank. the update the walking Joe, the detailing We an network. through retail Day digital, expansion and this commercial to discussion our shift post-COVID turn distribution capitalize regarding of progress call our last since over including the I'll the on will At be our for to our to plans improve and discussing landscape, Investor this progress in increase loan

Joseph Lebel

Baltimore are originations which the running pipeline More $XX $XXX in QX. ground loan at all-time in more talent Credit well. QX new commercial our our have LPO and a supplement in company. existing Loan lenders Regional activity, we is to million and credit seven lower Through highs calling originations impressively, hunting Efforts our residential last the million our for with geographies. the set all-time as with both also evident active All lenders successful our seasoned and regions Senior team record to XXXX. the the have well efforts Baltimore as add and added commercial President lead pipeline footprint including strong Boston the continued lenders XX in our continue new Chris. activity. were We've than business. for actively nine activity an weighted months new Officer of in commercial in momentum by in Positive quarter-end, market bank regional and hit team Thanks mortgage as members in

activity loan originations for We ultra-competitive business, we have environment. are second In been despite excited by only and about the solid, discussed growth limited the scarcity available half credit prior sale. the of as in residential calls housing have with pricing

a continue million contracted provides portfolio diversification loan the $XX stable and continues amortization. growth million $XXX amortization to in We PPP million book While commercial has quarter, while book expect of pay-offs don't low-risk normal I loans largely the loan the million don't offset our and product $XXX had loans. we the residential loan quality After of including $XX coupled from declined for consumer portfolio to year-to-date, to $XX available sales. QX, sound add as component grown book book and The in a for be substantially from of the in in million has with record due to expect properties to XXXX shortage to this but sale, originations portfolio. grow this

As QX increasing dividends growth we portfolio begin to in via the loan geographies pay in QX. forecasted new QX, and will adding

markets existing the to Our continue recedes. build as pandemic pipelines

interest low largely net help difficult accelerate to due was the environment. two basis to both core the margins margin, in demand and the Putting the points flat, work and environment, new this year. and record to contracting essentially rate half markets of of but income NIM pipeline in the impact second Turning cash is the loan in should

on focus XX points Chris cost, mix changing to the and on quarter-end. deposits as reducing basis noted earlier continue We which of the was at

total of in and three million deposits. at deposits. drift higher branch in expenses in two, due and compensation costs. consolidation new four. CDs Core benefit to lower Operating million now $XXX in in deposits while hires XXX,XXX, increased mature non-interest-bearing continue adding stand and to exclusive will CDs quarters $XXX merger-related XX% We another primarily We expenses, to $XX related of quarter million as exited

and as overhead the new hires get some before expect the added related XXXX. OpEx QX run fully increase and QX in into rate reducing in We in QX

four pandemic mobile, effects our in closed the via we and branches early in analyze and the online, to noted, our branches, center. our care behaviors continue Chris customer customers' of on As QX

to channels on expect these all our on it Investor details our back more provide for We plans scheduled August of services in delivery X. to for banking I'll Day of turn Chris. that, With

Christopher Maher

Thanks Joe. the we'll point, the portion to of this At call. Q&A move

Operator

will [Operator session. will And now Piper question from of the Instructions] go ahead. question-and-answer Sandler. Frank first Please Schiraldi come begin our We

Frank Schiraldi

wanted I atmosphere morning. there. the out ultra-competitive about ask Good to

is a half and just growth Thanks. of like in is referred the that I loan everybody pickup biggest imagine As fiercer the growth would talking half competition you the the about I it think in given Joe, in year of is the back seems risk to getting loan the back year? to

Joseph Lebel

Thanks Frank.

think right. I you are

I drives done for markets us, that new earlier, the will the think Freddie not as refer liquidity York, something of think as some can't activity. would but I think I as seen Chris the tell expanded continued and in speak do to probably addition core others, I'll and typically right. of you folk's I be would example us. competition, certain that's Philadelphia. give consider geographies for you folks in remarkably that I I but and The Fannie, We've the have market do mentioned well New of growth you resilience well. competition in is what will an that's what help to

to long aggressively permit very today fascinating but in very with and is money, which how multifamily is of marketplace XX-year long-term been market in. the that Mae finance be the the in to Fannie know uncommon a them just it's is banks see occurs, aggressive extended mid-twos don't good. have very they've loans aggressive I environment and So amortizations for not on

still So bullish other monetize clients of that's prospects. our also right. instead on or refinancing some But, all to I'm things. opt we've very seen do

Frank Schiraldi

me from Okay. And on one second then, deployment. capital is just

You got a authorization out pretty now. there big

been that look So through think, potential remind if Jersey? and back, buybacks you and of can repurchases of DL I for just you've looked in wonder M&A maybe The you have if you are deployment there recently us but the what kind talk of any priority out that. for just inked side you looking got to deals versus the at that on at about

Christopher Maher

things want you management of think couple here. capital to a in the Frank. a I share buyback. I have are mean, and make about M&A that on good there point optionality So We

to authorization the earn allows us back and to shares the two capital levels very past the that. and And we price, quarters the having have capacity have So comfortable certainly are more with earnings quickly today's quite we're we do buyback repurchase at dilution the and the in modest.

ever can So we appetite own shares strong our for that's you probably a the M&A do. and have best

the smart been sure we're push to deals, make because we that, that has beyond can't but we want to and comment looking will tell for very around exploring some all I institutions are though, commit you do in now Looking on and the are opportunities market individual repurchases thing and our active partners M&A. that it's far that high-quality there capital we too before that

M&A are in M&A but the different have not On shy we we what the the been past, in for in have the than side, a looked things past. for little would we look

billion I we quality $X.X business, our in our building have really do for reason we interested about our provided of funding funding less and treasury did, commercial are is banks. sheet that we a in organizations funding back M&A. We're deals cash was go super-high momentum few at securing maturity go said So bank to first and love out we commercial balance low it if Obviously, and to products, the the looking in we costs. our with were the business. That funding

an found opportunity shy we it. that, further wouldn't we if So about be to

the We probably then think if landscape, want that have thought an we we're aggregate all the shares and about the structured I quickly. next to two they and also or have to you say makes through and understand I down that when you saw that were opportunity quarter So management. not the going sense, M&A and we capital well make get done, deals. were deals constructed as ahead sure just I'd back buy think really push something to and go properly identified more

be it's use disciplined to We and to I book balanced value. up pleased very last to willing about protecting terms our realities how we and we're three have moved We're $X the want really and to currency be that. careful in the them. to about quarters. am we very acquisition, book thoughtful and are our of We about of what in an price tolerate be going

Frank Schiraldi

Sure. of just tolerate there back earn you're a willing - any last us on the side? to can And just what then sort follow-up dilutions to of you that, is remind

Christopher Maher

that So hasn't changed.

too enough I'd rare, could are in dilution. there provide share then earn per general very getting you'd other less backs, on three are three a said, years. earnings momentum, So year earn some the earnings really really year a per be then appropriate of within is in much three that cases side, economic can say faster risk horizon. they reason if outlook that strategic to earnings years think five start you conditions And the three ideally, saying really even at change opportunity over a can kind your our like if that the also is back to see I looking is tell the and could you for And there that not That be your is makes you're what share. horizon to

at So getting look scale the dilution sliding as to the accretions it a deal. out back many we how of on relates you're

you're three if going or So have less. EPS otherwise, three better is to worth momentum stretch, to that stretch it years years, keep you that beyond

that helps. So I hope

Frank Schiraldi

thanks Yeah, color. the for all

Christopher Maher

Frank. Thanks

Operator

Michael question next ahead. KBW. The from go Perito of Please comes

Michael Perito

guys. of loan accelerate color originations kind probably growth guess, for question, wanted I closing just, my expectation next or moderating the I as questions. a to are I the net half to pipeline of of changing but maybe that increasing or of expectation on taking rate know all provide about for simplistic guys the of the is the back year, an going side. the all the or Thanks a pay-offs appreciate But I Hey, think in mixture start we week. you color. more to three. growth

Just slower we little assumption that the trying past to saw kind XX as bit of quarter understand better over the what's a days? growth beneath

Christopher Maher

Mike, normal decelerating. It's kind have been amortization. first, the we're a them seeing reasonably so pay-offs Let's say, of not stable of accelerating or either level

had to So the that we've for meeting the ourselves of And markets effort new all that the we very net number, that $XXX is we and I resource a and a of going per quarter, growth a the with million limited producers hopefully in ourselves grow engineered to New be. company and get in the certainly stick range know new to to to because is $X growth. have third if important task. was about bankers do would us want quarter, kind competitive fourth is much so call certainly and an it the billion that the saying world we that's in I it billion a loan resourced year year company to markets pace to and quarter but how in we're just what been That a tougher the think by going Jersey, to we've in

quarter Joe in Looking $XX at last big mentioned help. with chipped in even and as just, Baltimore million that's a folks the

trying be loan quarter growth be get especially We're your concisely. we have third hit a able the question the to in to $XXX that the and range to of quarter in the answer million given pipeline. might of So we to kind repetitive

mentioned a pipeline Joe at the of we million end have June. As $XXX

lines Some credit biggest not going full and to drawdowns of our still, bullish. during that pretty so just it's but get is we've the pipeline of quarter ever you're

Michael Perito

like one, in me, where income, kind just then third trend? that rebounds things could is thoughts Helpful. run there rates for mortgage of ones term just that core is any and maybe, about your where quarter? quick kind I on And other Thank swaps the from given mean, room that. you rate two for are non-interest some of

Christopher Maher

of a certain that is go a are swaps really loan swap, your of curve the yield function bit. portion a just moved will little commercial loans closings Definitely, so

volumes as it's for ago. to was and do attractive a low So you're not But for increase quite quarter us. was think as I loan it swaps as it a year going see see you swaps particularly increase,

Also so XX put opportunity. be very for that's XXXX. the Durban the not in that think until know another to a X won't note I be months that but we I'll note, just for of July cap us release subject I effective So to big it pleased we will

continuing had so think One think card that's we line up, it's the came nice and debit only positive this I a of items trend I and income build. as should quarter a probably

the The two They So spots. hot bit pandemic. those are been fees deposit little flat. have hurt a in were the

and of hot-line a for engine of Some never It's been that is particularly fees not an that on being relying item us. overdraft we're growth.

we it not starting numbers meaningful NASDAQ, in So have number now hybrid there it's us aggregate very and large are to an we point our I a that's growth performance think still to And I advisor. also robot is that but NASDAQ, is opportunity. would in an had produce the strong

AUM great up so about to in this past and there. grew adoption $XXX customer the So quarter XX% been million has

Michael Perito

And do can once next in it impact quick, year? real kicks Chris, you just remind Durban you approximately me, expect

Christopher Maher

It's changes go a all hard the - doesn't are types, the across does transact so doesn't some because it the mix revenues and all up cap of fees card but apply. it transaction transaction across already little the not cap, below fees debit as - applies really apply

next that it grows bit July best depends million fast Our on or the a X. how at say, this little $X could point $X million, be between guess is now deadline and

Michael Perito

that's And pre-tax annualized?

Christopher Maher

Correct.

Michael Perito

OpEx down number any jump you and that other step lot in I in $X.X have early kind number mentioned, I in think then two, digital obviously there, that year. lastly up just to in adequate more from Joe, investments of the step expect million the you questions then, XXXX. the mentioned And million back is range, And it to $X that a kind expect I me, of bankers, one, making, up you of you're guess overhead one? I to think you all of capture half two to to as

lot should plan now months guys hiring was six that it maybe budget pipeline read for more we than of you has a that that is So into the place a little and ago? active less that taken

Joseph Lebel

pieces There's of a parts. and moving couple

you point hires. on out expenses a of as made, So we are full got the couple there we've quarter them more and hires get to

hiring We tapering kind at have been we will so hiring be of not that's pace off. at the

fourth little So a catalysts, in little show bit a the two we one year. of because the up next expenses drift that. the will Then in other will bit have beginning quarter,

is which The country conversion I the Bank referenced. first catalyst

core set supporting about $X itself the application set that a the today people So and costs between us it year. application million

de-converted the third but be So be investment management well, tailwind how digital and going then trailing a that's both we're a overall the getting that's to that there'll some in in happened. able provide talking our And week nice quarter, we'll four the is tailwind. and second thing in expense in be quarter next walk about network retail you as to expense through that and going

trying quarter. down as before million of beginning know could high models about in quarter to terms as quarter. peak first guys the We have trend by this think in you absolute all quarter, I $XX in fourth So and next to the you're numbers

and outer for that's quite So but that probably be range the that's QX. kind magnitude of not the may order high,

Michael Perito

I you appreciate my guys That's for helpful, very questions. thank it. taking

Joseph Lebel

Thanks Mike.

Operator

of from The go Boenning and Please Scattergood. ahead. Erik Zwick question next comes

Erik Zwick

Good everyone. morning,

Christopher Maher

Good morning, Erik.

Erik Zwick

two questions today. Just me for

stayed commercial over looks it quarters and the the pipeline impressive pretty the pipeline past three three yield quarters level. constant The as the first see of yield at in three build percent that looking and like to just well, the has one, commercial

come or a able pipeline that a in of you're portfolio yields for that to of just quarters, else two there the at is at competition it's I'm what little lower the actually origination lower reflection seeing play past you're is bit something that in is the close kind yield. Looking the than the that curious, there?

Joseph Lebel

think it's we're of on thing approved versus down a And curve One you the the is go that plays I loans that the approved I in. think bit, we've been when There combination factors, they've it's other then and environment closed by absolutely the - we done mix. yield after negotiations is it or that go have transactions competition. Erik. the that given are into seen even a time so

So what and closing as Chris being funded. mentioned earlier, what's you're depending on

variety those the impact the be that to fund end projects tend and don't is so aren't bit. better But like same as of loans more construction the construction of can to Fed, and tell of we appetite. do higher aggressive those loans at credits a we to be of be actual and cents for funded yielding blowing than - types we and the time, So fully tend or the them lenders projects at dollars we a always BPS XX that willing our anything remind to we're this the we're our credit stage lower-yielding

in market So we're play that I'm be happy at. the to the negotiating in

Erik Zwick

Joe, And quarter a revenue time-to-time Thanks in not the at in the investments investments I noticed bank appreciate last and were just the I there. balance equity from guys, source for and million that opportunistic made you then it's sheet, nice year. looking a up the trade primary but some color $XX you've been of I know

that QX, that is reflect provide color new to if curious, those any does can in investments, you so, what Just might maybe be? some here increase and

Michael Fitzpatrick

investing regional Last the banks those you It and recall in we we beginning straightforward. of - Yeah, Mike. positions we had were Eric, stock it's out year. is of common year pretty of sold

stock investing we're Now companies. service of preferred financial in

that's So that million all in growth to is $XX of the related the strategy.

Erik Zwick

Got questions it. my Thanks Mike. today. for Thanks taking

Joseph Lebel

Erik. Thanks

Operator

come Research of will Bishop go [Operator Dave from question Instructions] our Please ahead. And next Partners. Seaport

Dave Bishop

Yeah. Good for questions. taking my thanks morning gentlemen,

Christopher Maher

Dave. Good morning

Dave Bishop

Hey, terms Chris, deployment. of capital in a quick question for the you

targeting there mentioned return and sort You relates as of maybe us Thanks. ratio just managing maybe positioning remind towards? TCE to strong just it or to ratio or capital Any of curious inclusive targeted of the capital dividends. sort shareholders you're buybacks but

Christopher Maher

about long-term that Sure. to ratio. answer the TCE is Probably the best way think to

we'd the where be in like to right we're So mid-eights.

and X, approach more start your as to approach start much carefully. capital, as X, then to you capital think better too getting start we So maybe manage you you're you to little a

stock, is tangible and equity So the preferred of X%. our ratio because

and to tangible is excess TCE of feel X.X that the the to equity starting got ratio bunch to between we've get certainly point where X we a So capital.

capital The not of billion we for to other growth cash what is mean I we any by do $X and organic important foreseeable the deploy. need that for thing have future is

we billion And underpin as that right. to internal to capital all we're it. capital be we're any generation So deploy cash, while doing need be more of capital, higher. of $X actually don't The additional we that, would going even producing

So to typically I think ratios of They the at. more feel look cash. be because understated actually our capital are higher we level than

mentioned So we cash sure to great a that be shareholders. to as we're I that this before, get back is but to it our M&A going we with it, to deploy if do that in and try not, market make want active could a way if effectively, would

the both dividend buybacks. going to we're look at common at and So

through million You acquisition certainly very organic the feel direct provided have from alternatives shares put we can exhausted do growth. we we additional see repurchases meaningful signal X the a on, we could that

Dave Bishop

curious a at maybe some here, in here. on the net then current for credit terms the you allowance losses current just quarter, And backdrop informing do just it. here, the with Got loan least trends economic growth expect question of positive as obviously, in credit the

ratios maybe the balance at you as be grow out you'd Thanks. curious loans rate Just do what reserving sheet?

Christopher Maher

loss works our history. the think way I and quantitative about think when CECL you

be We operating have of side conservative on the period to for credit a the been pretty time. long bank

our decade. say lower if us XX% you look group than about over credit a our losses peer at So over run

quantitative. reserve the And to gives not fact, that under think have look to in So ours. fact that to the us is big of hard number opportunity portfolio ACL our more up. like get than our reserve it's It's on the the Interesting heavily. a our CECL, to quarter construct of that you is book hard if we ACL, end at qualitative all within

time say think based as pick how be were it for net reserve level. be you credit were on point it's about number, not against if probably new I that should - number, normalized say If to I a some period to running So growth, of reserving area. long - our exact in but growth, probably at the X% performance. somewhere that's loan basis XX Certainly, going a saying we've been a you

Dave Bishop

Appreciate it. questions. Got answering the Thanks.

Christopher Maher

Thanks Dave.

Operator

question ahead. next D.A. from Russell go comes of The Davidson. Please Gunther

Russell Gunther

Hey. guys. morning, Good

the Just - a question on

Joseph Lebel

morning. Good

Russell Gunther

Hi, question on the margin.

heard talked fair that it quarter I longer-term is sounds become about more to you're thinking with loan if And curve competition the in to then right, a expected guide, that that XXX how a the since this should you've has NIM trough. so characterize any as is like margin perspective? you the shift you or yield So laid the growth XXX inhospitable improve reported from intensified, magnitude timing out, about

Christopher Maher

to right You're point that. the into out, Russell, yield plays curve

discussion. we setback in curve since a quarterly the So saw yield little our last

into highly to to So us numbers we the get a well the up the going I even curve And think still threes. get time going confident I'm to the us. XXX give and really between is little talking XXX that to we what it last may take longer the we're difference were about spoke, previously yield XXX better. is or

we're of more that, right. hopeful would five deployment you're yield little cash that need have end little curve. curve steepness but of might quarter the And guess absolutely So we think that above a this X.XX, I event, a the of to the So we get more by steepening we in the is four, yield

Russell Gunther

you. me. That's Thank Okay. Got That's for guys. helpful it it. very

Christopher Maher

Russell. Thanks

Operator

Marinac The Scott. next comes go Please ahead. from of question Christopher Montgomery Janney

Christopher Marinac

morning. Chris X, just to expenses. technology drill Slide about Good I on and wanted talk Thanks. down to team,

metrics a articulating kind kind change of to, asset-based technology of over efficiency that that technology other the relate core of at one be look other slow sub-component we that should you've So the expenses or rises, ratio while will mix as and time? you would

Christopher Maher

very that want customers sure position metric what us back spending our Obviously, you're just spending how the And we to make our years following is we're important now where not to this money. spending, think because it. it's be goes but a you're it's

So they've that. they sure and like apps want to make edge got digital cutting things

I how the has a increase it think years as expense So increases you to a - dollars and technology and that, both increased rate. slower in can at percent, but continue absolute see will over

it's core million to So is the about to going mentioned a big now. was deal. $X systems. of the I moderate vast bank year. that people-related, The Interestingly, a majority I lift think country not

IT to is the that right of rest It's people. will XX% probably So be number the going down. come

our especially I slower to more been every growth comments see that, they're reducing this see rate, those dovetail demanding capabilities doing branches next the it's still using have customers, things the our going channels look that is today. but consolidated and growth and treasury, investing - and we've you're So in into quarter. nicely like will you What customers investment week, a think digital and will at XX our more been are in we that deliberately less, corporate we've

of - proportionately So particular a this don't we the a in have - Morgan benchmark. Chase, out point and you more same as one I about would anything JP is on we're that than curiosity benchmark. some terms to give spending IT

be you Now obviously, investor is think be in balance they've the should that plan I sheet do, more heavy point do got a you than future. to slightly IT a but for spending larger if we little the so around

Christopher Marinac

Then tell? should a Boston it. large you and Thanks a is would additional England, or like it to Philadelphia, I quick of the over New early just on that to for appreciate time, think initiative, be market too Chris. follow-up Good, like that and how it we Baltimore color.

Christopher Maher

These to talk the way Amtrak able in about. I are which north go The be which an all Joe tailwind and you're we you I but and to best talent will find bank just led of banking thrilled touch in going or a talent can it of people comments, sure the to want never be markets. is we are we right. mean, couple expansion kind a great of train the can has it south been at get and exactly we've of millions to I hours couple commercial find on of the look by make some markets, and to planet. of then markets what the literally

we it But Tom. in a to opportunity you And people process the found the the how through the we know So didn't are folks for you we And a Boston successful work some talk but thought Baltimore delivering - frankly again be Dan as were could about and and question. priority the the question and a bit a on is of you the relationships exceptional us, a find how because was especially hire, had not bring markets board. backgrounds bring going we the need. we slower people little to talent It's know market the be. became maybe on. the the happy process would we you can we that Joe, talent

Joseph Lebel

of Bancorp Heller, BMO Santander, that very Officer former time. Marcucci newly from is a dollar Up a Griggs Dan lender, Harris Senior Senior very there ran Regional successful all-season in is our folks Lender, U.S. Boston, a David on Board who multi-billion of TD. really just for before business who's few at up been the strong, the marketplace. QX, end for June. Michael He came end Look, the days President a long Credit hired there, around

they thoughtful, be York. going to give support in we need us to of positions into tell the can people, few be to built right at in years put officers autonomy, successful, people appropriately, we've to and years look Hire need patient, in X.X tend the in but some what you these them a lot I'd we're them Philadelphia they what grow. as in a look do, and going That's be ask them New them tell what do do, markets, I do our As just to to we're regional at go blueprint.

quarter. think I outstanding in under last about four it we in is just loans billion years. the now and $X Philadelphia talked

So York about New is and X.X.

dense the folks markets lies is right that front just it's markets actively have the we pick we a vibrant And fill Boston we're to with of in for there these you that reason It only in these is are folks. the opportunity and up more again looking have them So talent. few and there.

Christopher Maher

get dollar eventually a multi-billion can So to do And be the answer directly, think market. a we take into we're dollars, couple question your a we not getting to I billion years guess, we're over a going could be to if markets market, years of may into don't us going each to that. of Chris,

talent we've are a to investments we think we So we're and not you that hires. some it our market extraordinary we unless to know and the into has got be feel go going not had potential going sizable unless

we're So pleased. really

Christopher Marinac

Thank it. Great. I appreciate Chris. you, you, Thank Joe.

Christopher Maher

Thanks Chris.

Operator

Stephens [Operator Breese from will of come Instructions] ahead. And the Matthew next question Inc. Please go

Matthew Breese

versus morning. you to wanted this horsepower that you of have And contributing the is comment of you're pipeline? now get that field? back then exceptional team to greatest pipeline the little robustness used you're Is go bit which to Good the geographies and have? origination on should on I comment seeing could the could or to you the level we maybe type a for I the pipeline. team strength the hoping was the that this on an you

Joseph Lebel

think to takes to QX, new to actually compared some acclimate, into low clients to acclimate bank. Matt. QX. of is your time I own We going expect met opportunities probably culture their period prospects and the new not new pipeline by what at only I also lenders, It to a really prior but

York. the Baltimore and saw was to markets, grow. New Baltimore vast Southern the quarter, $XX in I So Boston Philadelphia, a yet in New consistent that lot going by pipeline totally I existing end grow. speak activities, pipe, million is it the or been on. expect the rate resi At and driven commercial environment the than last book, do other Jersey, to the put the has the the think because but of our and years. from the fairly resi few of can't I is a the majority resi Central pipe you In about guys do Not

end Our at May. Baltimore lenders on came the of

or another two You expect them to quarter really ramp. take to

opportunities new really folks in on we've I'm So that with hired. bullish our markets the the

Matthew Breese

historical could the is rate pipeline, As the pull-through pipelines? through the idea you've rate gone on what of us you give just success some

Joseph Lebel

XX%, probably the point, commercial Once the Typically low-to-mid XXs. The in substantial. pipeline probably is commercial. The approved. well pipeline reported it we gets rate XX%. is to for way as residential over pushing is pipeline the the only It's pull-through in report commercial us, we're pipe in conservative

of the credit any that our and So see on and work-in-progress you It purpose. is underwriting include do pipeline. stuff the pipeline not only does we approved

Christopher Maher

real not They're work in Those Matt. progress. commitments, are

happen So strong. the to million be pretty sides and commercial one that $XXX pull-through careful the does of from both we lines. time rate in million is on want to have The time thing about $XXX

Joseph Lebel

projects. Construction

Christopher Maher

Yeah.

draw-downs pace pointed be even of we but pick little up lending do the Joe expect on lower as that. a very beyond bit So that's And still will healthy the to out, pipeline. that a

Matthew Breese

Okay.

themselves. changing landscape. the beyond competitive of here yield lot sold either peers Another are is factor and curve or just involved your just being the A deals competitors former in

balancing the So home how market and might Boston with about a you your in do be newfound right Baltimore, state what D.C., expansion, think nearby? opportunities

Christopher Maher

opportunity. name be it's we - might is in a have look announced I'm the of to in I going different them to more of each the them, to banks. of and were think not kinds deals that and you be at months, think sizes, all think there six bunch I there stuff disruption and of going last different that few right With

to other think Some much of don't the ones or difference be that there's much opportunity. that going we

going for them in are either-or. cut years. core we've be their They folks been in to the and markets existing need an have execute to they're for mission that and out our So won't

it I'm of look, And was Without to Baltimore outgrowth itself opportunities. our hand, wouldn't I that comfortable think that be the should team. deal, we folks know but see deal. expect have in PNC-BBVA where they that an

wouldn't we be and Baltimore. in So

Joseph Lebel

market added up former, in banker we've which the in environment. we level paying senior And dividends for lenders I because Matt, stood of some the markets already is that us disruption. by led And, mentioned existing vertical, of last construction new a quarter very a our current

from fronts. them all approaching we're So

Matthew Breese

that. ones, robust. new pretty is authorization buyback quick appreciate I Two it. other the Got

terms in appetite the expect where or near stock of year? given is, authorization full balance amount full should over execution the we curious the of and on the Just of

Christopher Maher

Yeah.

you metrics overall though for be that aggressive. the should good that hard At earn-back be to execute. us. There to are the pretty can think expect extremely times price, current thing I we're going are

can you authorization shares purposely rules there many And block but periods. our have an seller much that we seasons. would right And M&A position, buy but we of both outlook find do, you could faster issue the wanted the think to if are going message support buybacks. can all you can we stuff happens a You be you're want, think that I earnings of things the capital to amount send a back in that these in bit a can different how

announcements. bunch We've seen of carefully. watching the You've a market been

happy by opportunity are a might find bit, continue organic, the make to not material buyback a do We that We to we're not own but rather too. M&A. for distracted that not mean we little doesn't be material careful shares us, looking it's to that our and with thing. but just We're at won't going the move needle If right to be have a opportunities difference.

Matthew Breese

rate? me, rate good little from bit is year-to-date us quite that a could one you what's a just just tax Last run Okay. higher, for recalibrate the

Michael Fitzpatrick

it's but Jersey in they year between New consistent that Matt, been increase some New bouncing has year pretty Federal etc., XX%. around. the New in Yeah. and number surtax. in rates York, Mike. had of the It's came a QX the state New had state why I mean, surtax Last York. York, and Jersey, is the a happened New bit because QX little up this That's starting part,

still it's XX, XX.X So like I'd say that. something

will Some are supposedly, temporary, time of surtaxes surtaxes these are mostly but tell.

Christopher Maher

point I out would just Matt. too,

we One states Jersey we a New a in derive the income of of so of least bit the the reasons the is tax diversifying are strategy little by is New shot long efficient. took out Jersey highest

growth some doesn't So elsewhere. have it hurt to

Matthew Breese

Great.

See it. Thank you you appreciate much. next very I week. Okay.

Christopher Maher

Matt. Thanks Appreciate All it. right.

Operator

of go next comes Don The Koch Investments. question Please from Koch ahead.

Don Koch

competitor the three off Is questions. One, people going you sort curse of was a have do that pickup to group or really but been major but new talent? board. local are you been has taken can of think fight that going you market better more blessing some or or a you've that not quick much only a got to some struggling I has on color given be always share will fiercely a

Christopher Maher

Yeah.

from announcement the to earlier week? you're we Sorry, this Investors referring probably assume

Don Koch

Yeah.

Christopher Maher

lot of them since And Investors at the incredible for we competitors, time public. best and company in really as so they just look, we took about And, wish folks they respect the what the think we a built have to of think and right. them the

too to it. Webster It's will In opportunities, for And exactly of opportunities deal deal when to opportunities it it's happen. what changes these that respect you tell a there be, compete others deal be early with tends sometimes you them. there have early deal like to is there where in that too great or fewer the and and any but things come are people more the tell are Sterling and not might

model reexamine the Just important loan start them, geared business what's banks everyone compete officers, is to our to customers there. because with XXX% to largest out

win So from Wells, trying we TD, Boa, clients to PNC, others. everyday to go market and

investors are bought in remarkable. out bank is for terms, competitor, general anytime a we people that good can anybody and by us, So be count a don't and giant the but

best sure the are change and So them very to much. - not going things I'm I not wish all I'm

Don Koch

of last rationalization, Second That the a be quarter. is branch X quick tremendous job question, in over after you wonderful a focus. this that got time, in of I should a done period burst have XX that one more

is do continue you run does that rate something going to you think can of work on expect? that is that that to So are we or right type

Christopher Maher

more they going absolutely down operating power as Investor week have detail the XX to five on that look sheet X.XX%. fallen basis give that work and at just the we'll that, Day. of points, assets, to in years to percent you And about our continue expenses at net last next almost you on the on We're balance have a to if

digital. we we've like is, to the at are to we look switched and So following that you it can as way customers our see

put customers our now our lot into solutions, of a that. money are us want So better day telling It's they have every that expenses XX.X% us bank to with and ways IT. operating we are even of easier

what result, to rationalize new use. have branches building you that get those have a we're to investment channels channels But interestingly, in in and your over-invest new as So the you do less is too.

going is up and a branch that We've already. them got concept well. new have of quite We running a couple

the in been building the are process two as We next of well.

but every to investment in have levels invest reflect needs customer you - what it's channel, think I So your your are. just

Don Koch

last And brought footprint time your in your about But up footprint know of immediate people. the of every New I times half greater Jersey, has coast question New in those on finally, looked, Florida, Mike. especially of this couple and souls, The XX winter. I Jersey last western with X I've million posted my has million the people

kind some presence go to of region. You've that in that to have got that to locals follow or will the migration

keeps something than now million. York. last beachhead XX rate that Florida larger to Some Northeastern because New states your XX to eventually high million years going of those with It's the sort customers, governance, tax or those England blue New is has from the in or gone X

You've got follow money somewhere. that to

Christopher Maher

banks. mistake, the that in switch details to will ways, And on think with changed customers has next when agree limiting I to astounded New absolutely decide point right. this and I little Digital the is you'd be including week will a more have bit terms digital. Jersey overtime. of share of opportunistic is in say that in a game to a lot how We geographies, ourselves get we your we

the who the one successes we've customers So leave is in biggest had number us. of of is reducing digital

but them OceanFirst places, the three four move So go the customers they of down is leaving last to all to years. to California, Florida, over of materially or they move sorts likelihood

Boston. day for maybe off down but We we Baltimore a lot and a that in sure get right. to want Florida, make there'll now, those, we've for be in bitten So

Don Koch

Thank you. Okay.

job, nice You did a nice quarter.

Christopher Maher

you. Thank

Operator

And of ahead. come Wallace will the next from Raymond Instructions] William Please question go [Operator James.

William Wallace

margin Xs try to gets Hi, that or of getting to margin or purely expansion? going I brief. be be Are whether just function about talking you back cash drivers sort of deployment I'll relief, pricing benefits the and that of to are of the underlying there funding, trends, there this cash are deploying it's a just on circle concepts wanted we on commentary, thanks. into NIM. the

Christopher Maher

the drive mix to has It's that shift it. really

points. about and make a expectations and down you go they'll XX it loan the They about the deposit go market down given rational have bit continue but they to at going not basis funding think more, little are costs, we on If side, to yields. conditions, we're competitive

picking yield not we're our going not up move up, to is be going So to materially. loan

a cash replacing So really XX just with with X%. loans of as over the little it's result, basis points

William Wallace

Thank Okay, my sure. only great. I That's wanted just make you. thought. I what That's question. to

Christopher Maher

Wally. Thanks

Operator

any I session. question-and-answer like turn Maher, our over remarks. back Chris the to conference for concludes would to This closing

Christopher Maher

I'd focused those call attend do and that, business, like Investor week. to you. We thank earnings. the to building deploying morning. this for the our improving cash, everyone you that look next can seeing on participation We their of Day With forward in Thank remain

reservation and a look our to results third with in we please So and call you ahead you. also make discussing quarter October. forward Thank

Operator

Thank has for conference today's now The you disconnect. now concluded. presentation may attending and you

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