OceanFirst Financial (OCFC) 21 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Alfred Goon	Corporate Development and IR
Christopher Maher	Chairman and CEO
Joe Lebel	President
Pat Barrett	CFO
Daniel Tamayo	Raymond James
David Bishop	Hovde Group
Matthew Breese	Stephens Inc.
Christopher Marinac	Janney Montgomery Scott
Manuel Navas	D.A. Davidson
Frank Schiraldi	Piper Sandler
Michael Perito	KWB

Call transcript

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Operator

Ladies and gentlemen, welcome to the OceanFirst Financial Corporation Second Quarter 2023 Earnings Release. My name is Glenn and I will be the operator for today's call. [Operator Instructions]

I will now pass you over to your host, Alfred Goon, Corporate Development and Investor Relations. Alfred, please go ahead.

Alfred Goon

Glenn. you, Thank welcome call. and OceanFirst quarter second Good to earnings XXXX morning, the I'm and Corporate of Alfred SVP Goon, Development Investor Relations.

Before like to earnings our website, oceanfirst.com. call, that the found off earnings quarterly be related release we our and company can on remind kick everyone supplement we'd

forward-looking Our may X-K, complete including filings, those statements on Forms contain and and non-GAAP a refer to statements SEC remarks measures. to All that from of actual our XX-K factors today XX-Q, discussion for to financial results you. participants those forward-looking could may should any refer found Thank statements. cause differ

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

Christopher Maher

on Thank morning, and earnings all thank XXXX Barrett. have I'm our conference you, call. to This in Financial by Chief you Lebel; second and Joe Good our President, morning, quarter been Alfred. Pat who Officer, joined our join able to

your with and to for performance interest the financial quarter and operating We morning, our brief about opportunity provide for forward some and This will you. the this outlook questions. in the the with remarks appreciate After results performance refer our throughout discuss We we earnings business. filed your in regarding color connection to the the discussion, our call. to release may taking look slides our we

results Our second earnings $X.XX. quarter for of the per financial included GAAP share diluted

has million of interest $X.X year. income the which quarter, prior while linked million, to net $XX.X reflect earnings Our X.X% increased as the from prior or compared down

will $XX.X a base, protected pricing peer over deposit industry has which Our we betas deposit XX%, costs, our second on our increased increasing group pressures believe deposit by Advancing to strategy more to impacted cycle. were our billion. which the competitive quarter results outperform

just to continues and basis points total representing basis XX balance loans Our assets assets, remain points solid respectively. of criticized XX nonperforming classified and with sheet

ratio of ending per and common XX.X%. value X build share the a with to a continue equity of $XX.XX capital, Tier We period tangible book

to of XXXth approved share. a quarterly company core represents Turning dividend the quarter. Board company's quarterly The capital the consecutive dividend of cash repurchase in common and per earnings. is not XX% did $X.XX cash The any shares management. second This a

provide regarding over progress At this to during to the I'll our the more details turn quarter. call Joe some point,

Joe Lebel

Thanks, Chris.

Deposit $XXX.X growth quarter the totaled for million.

We maintained last have the of deposit approach a particular to thoughtful in have our repriced QX. to were paid clients, pricing which attention valued and

We on in existing retaining are laser-focused manner. while clients our actively new clients profitable attracting a

the in with growth, QX loan to and ratio to QX us both growth XX.X%. reduce coupled Slowing loan-to-deposit deposit has allowed

a quarter clients gain to demand has the and increase for notice net to residential asset secondary slowed. has been incur are sale than originations borrow increased small and multifamily to reluctant muted Loan cost will as on to quarter the this in certain in classes You begin growth focus as other market. in the sale we residential construction

delinquencies maturity and asset The average and rate average annualized are at CRE be to low, as of $XXX X.XX%. book. set with wall modest zero well. Regarding Net us were credit percentage loans a effectively remain discipline, maintain Nonperforming basis. which quality, served our total an has on charge-offs we $XXX loans of loan continues the of million respectively, an on in X.XX% mature than less XXXX, and to investor XXXX million to continue

expenses over outlook. and With margin, that, Pat review call I'll turn the to to

Pat Barrett

Thanks, Joe.

XX%, at betas to to and period reflected X.XX%, compared liquidity and extent, respectively, Net impact cycle-to-date costs cost of interest higher lesser our mentioned, some of margin prior quarter. Chris and income of a and reflecting we're in the were deposits deposit funding Funding end. million seeing as $XX the costs excess stabilization

did portion be for longer, to of term our higher we expected borrowings. out rates FHLB a with Additionally,

expect QX third our further as quarters. impact the see be in could to two may the than past over, compression modest but in we believe stabilize, lower much roll quarter margin we time While deposits

to cash to continuing uncertainties liquidity combined the stressed the around with excess monetary environment We quarter maintain due second during continue policy.

normalize As modest those continues impact cash net which but risks levels, ease we to to capital interest positive in expect a will third the banking have and on ratios sector margins stabilize, and quarter. the

real the noninterest to expense, recruiting $XX increased nonrecurring compared million just For under to includes expenses. of charges quarter. $X related to increase This prior million and corporate estate

prior core charges, with right the expense these Excluding quarter. line is in noninterest

with effective tax going and Our range XX% in the expect we to guidance, prior periods for our line of remains and this forward. rate quarter in remain

improving benchmarks at the During which We're last execution includes branch businesses, the detailed project, our processes to revenue automation and of plans processes infrastructure C&I of all business. quarter's evaluating to earnings call, we relative residential a support improve this aimed phase network, and bank-wide developing internal deposit contribution project performance. in lines and briefly introduced across of lending, increasing improving gathering of spending internal our now

hopeful which we operating the year. which onetime project, $X be quarterly scenario, by costs based range been it's will believe it $X these finalized, assessment, approximately FDIC to million the approximately expected fourth proposed will this the a million some has $XX of could will costs, additional does quarter the basis. but the proposed not decline million think be include of expenses While self-funded million onetime initial we to initiatives but by it's of This worst-case not to guidance. $XX on be lower the special require on We're potential

strong and grow remainder to CETX remain ratio improve additional operating above revenues opportunities the through course capital leverage half. to modestly XX% XXXX. to We finally, into and second further the we move of the on both the our to expect of and as over with earnings through expenses we And year continue work levels remain

call. this At begin point, the portion of the we'll Q&A

Operator

Raymond now Thank question from line James. you. [Operator Instructions] from We Daniel, have our your comes is Daniel open. Tamayo first

Daniel Tamayo

for guys. good questions. taking morning, Hi, my Thanks

Christopher Maher

Daniel. morning, Good

Daniel Tamayo

Yes, morning. good

second this but in And to I guess be I kind confirm, said but the fully impact excess on of backed quarter, the will third think on Pat then was is that that the First, quarter? for what just particular, out in - you in right? the margin, the liquidity, that,

Pat Barrett

point get call itself back point to be, some We're during the trajectory. margin. X point that are probably normal quarter. single-digit pre improvement on We've basis a We're wait Xx right, the how cash through that quarterly It point had down going see that in the that already bank impact of X but operating and to expect season levels basis overall to started kind and and at expect levels a goes, reduce failures That's to to would the margin Xx or to basis February. maintaining normally we of yes. that or it, earnings

Daniel Tamayo

Okay.

if the think we for got still third expecting thinking in margin liquidity, we the guidance stable should the And as in in about relatively mentioned. from trying compression So further the just the to of compression -- about things. quarter, be I'm but offset the two you kind that what's third fourth ex-liquidity quarter, you're as those quarter? the you've reconcile

Pat Barrett

I compression, points say points basis X maybe X lower. basis or Ex-liquidity would

of frankly, So with like expectations the that quarters. we're quarter be next going it of than loan debates carve about or being out trying flat of never about the whether makes we've being of it an stable points margin got as rather internal as right margin. trends. And forward broad deposits demand to two to around in and we now, as each it this is decimal plus/minus loan But I for really as is, low bush growth talking unpredictability exercise kind printed X% it

plus basis get things points, if but year So or minus, second lower. don't half the we're angry for stable X of higher or the

Daniel Tamayo

noninterest-bearing of it. And in from you're Got XX% that will I contemplation, terms at? not. concentration what, the range

Pat Barrett

stable. Pretty

lot We COVID. have that movement not guess, seen of in mix I a since,

definitely in we which bit call think whatever liquidity three surge a but them, you pretty want runoff XXs acceleration it's that last slowly down last I some excess over customers, deposits, of for - years, were low six gotten it's nicely. over little and has of the that was months, an stabilized the pre-COVID, moved reflective to

very nature that's deposit of look, base. granular the reflective And of our

and We lots have low operating accounts. are that lots accounts balance of

that that us deposit investor slide an a base our saw turns flagged year. approximately over You presentation XXx for

people back. put So actually the then spending it and every are day, month every money

So chase these rate. are not accounts that

be that be tough I environment higher. would stable for to for would incredibly an that, deposit noninterest-bearing finished just hopeful it we It's the will love remain year. we're and XX% So how growth.

Daniel Tamayo

more the I one that And guess the kind question Okay. given high-level for significantly environment. range loan then tightened Chris on of year obviously the I appreciate color. side, you've this growth

would you're of hire lenders how back quickly curious, more Just that at reduce the having a ramp that you work. anticipate people? you had number all? up? for better able how Or process environment becomes would to to curious it to growth, Just when Have

Christopher Maher

quickly. We could up pretty ramp

that have folks not We obviously. some staff but strongest have reductions among relationships, the made client the

time But XXXX. that a I into quickly. way the the comes, we're it's So But the turn now soon time as maybe we'll turns I it. of capital, bit turn lean we Maybe could look able this just think ready. we're and that's be the we late to think we when very building of kind of we'll watching market little at right. excess that would as and into world deeper is year, Part be when is

Daniel Tamayo

Okay.

Joe Lebel

hired I'd year Daniel, --we've new residential bankers thing. and one already C&I it's add five more new this Lebel. added Joe We've seven lenders.

for planning standing same So the we're the pat. We're not at time. future

Daniel Tamayo

guys. you, Thank helpful. That's Great. right. All

Operator

Thank Daniel. you,

Group. Hovde your next We is comes David, now David from line Bishop have question open. our from

David Bishop

morning, Good gentlemen.

Christopher Maher

Dave. morning, Good

Pat Barrett

Good morning, Dave.

David Bishop

back circling liquidity. just terms question of in the to Pat, excess Daniel's just

Curious Does normalizing? or a edification is cash cash of and Is assets? of coming the Just think sort as as level how coming from securities that investment down that measure? of or both. how that of is down percent should we that of well purposes, of combination our is securities sort that

PatBarrett

on It's balance purely securities Right. not That's liquidity. driven. sheet

$XXX of So expected for not generally hand, cash that need period a we we weeks less but days, million. flows than keep typically on will

and early up just It's ramped focus have at not liquidity that $XXX period, that's on the obviously $XXX and million, of a peaked for that down. all continue banks, point it kind about think us. in nearly down to stress out for and come million We to to, regulators will dropped for I

Reserve competitive hurry kind leave at to I basis. want that benefit are account Federal And environment that - so the And a gradually. reduce that money we're on it. a big of that and we getting and environment actually parked our overnight little are rates up an do don't to the looking in pretty we've be guess of is tightened rate to in bit We

basis as back hit effective significant nearly XX the would So earnings been have not days a of point Fed as the is of kind it rate. funds in

David Bishop

CDs, of And the on the it. broker I CDs. the retail maturation disclosures continued Got appreciate the then

two Just those could average rate between curious upon reprice classes if bifurcated the roll-off? you or that maturation have

PatBarrett

CDs the - and weighted CDs an primarily average we've brokered have the of X%. are a on have little about to of year closer the X.X%. retail those rate majority this rate books So, the retail, a average and The put they

our think again, best offer X.XX%. promotional, at But it's current not accurate. is rate I

Christopher Maher

Promotional being new money.

money. New Correct.

David Bishop

Got XX% where you of terms of it. maturation the the really hadn't And hold circling factored you credit, in it. that still the Does market rates population in over then, Joe, assumptions maybe rental of rates, had to Xx. calculation. of terms as that the the slide service true theory of quarter in rising waterfall Got debt last

JoeLebel

does. extent, But it's really, you a And that, expect. about still it we're happy certain to would Yes, pretty as David. evident

rate has If got at the average So right? rate of X.XX. the a actual underlying the maturing average sub loans you the moment, at weighted weighted that's of look

underlying So word in than they in were markedly maturity, the rate, space get shock booked. these the are And putting higher. many closer use multifamily not as the the is on rents, loans market to different we're when stress the loans significantly or especially instances, that I'll

David Bishop

know the sort and And tourism of but it. Got the in tourism, business and in I final then the any that hearing your early terms question, health from of early Jersey read Shore one into season, customers? it's you're what season

Christopher Maher

we're really mean, I I yes, hearing positive things. David, I'll you tell we're tell Yes, you hearing -

indicators occupancy, on quite been of So, early strong. have the

you if of So they're and renting then are. in money is when that. rooms so people question and hotel and the the they all will next we're think hearing spend they far, kind houses And town

So it's all positive.

David Bishop

hear. to Thanks. Good

Operator

Thank you.

Stephens Inc. line We have our is from your next Matthew now open. question comes Breese Matthew, from

Matthew Breese

Hi, good morning.

Christopher Maher

Matt. Good morning,

Matthew Breese

some progress progress perhaps you of of to Chris quarter? NIM or June the how the us just us things through June month sense give margin Pat, end of NIM did the the curious I or And was can the for just give how quarter? through kind

Christopher Maher

Well, certainly you I'd that tell the Matt the in more was beginning it acute quarter. of

response to all forward April, changes were made we carrying So in events for the March. the month example, of the we for in rate late

So not April but it in much acute flat. June was May. flatter, more and was

in So slight compression a just June.

ended. front certainly was it So

we signs but stabilization renew, about talking be any when we as and changing to pricing are we've we the bearing also of don't degree. And repricing. were in maturing seen a we although lot loans And seem up of accounts, earlier those think non-interest great CDs have

they're don't exactly you off margin So, a monthly think far that. but that not I not Pat, in on to numbers, basis. have feel they're equilibrium, But any share managing them. free we're if

Pat Barrett

our sector in look Yes, in as so the two prepared to months one spread remarks to And at April. bit. it a basis say account of of his of primarily was quarter. of quarters municipals of that of if the rest the not you referred a quarters the across Joe evenly did important compression, XX necessarily first thing it little week the being last of We I'd April. note And came reprice commercial points the programmatically three and

expect pretty impact of maturing base. and then And so, our immediately, rolling after new that effect just by anyway. didn't I because And things the and largely we the XX% really in that of rolling had answer rolling, promotional said, loans are a dramatic it that but over it's kind would that question, of as it's will are Chris say you that deposit that, that's I'll And coming that ask to offset continue. money -

dynamic cycle not that not think to and for on of liabilities of similar material hikes the same kind the repricing. on Fed - impact assets rate the of I is really of the all that be that are is expected

basis we that in, margin impact September $X or rate hike another a point wouldn't million on if to So, I two get well do call impact. it, more under expect have than

Matthew Breese

of cost all presentation, changed? it likely expense be that I plan decline, kind curious, be mid-June amount I 'XX In in it's that to benefits the X% decline fully intact? that still cutting do Great. the expect believe to has the XX% presentation, amount more the I could color. was the was outlined it the versus late in we of when you Okay. you see appreciate the a that And before. it early noted baked? is from XXXX

Christopher Maher

have the quarter. of Sure. short-term, in outlook hedged about is which end $X rate, as a little what And It took bit Which of a migrate on absolutely we to and our which decline sight low we range. of of intact fourth with million X% of the in the results third and we reduction $X we through the line in the print quarter. million to the run quarterly expense expect is

hopefully $XX months or So million from about quarter. the call expense a talking be exactly we'll and having $XX million now, six

that it's broader about up. we add The still and the also is other initiatives fairly X% XX% large pinpoint X% of the range, small number good timing so very little result feel that. a bit to of harder The a to and

of And quarter. steadily pretty the so, throughout second I in think bleed those first and will kind

right possibility rule next to do first will the year, early us we be staff for of into reduce to but have year now it's the against of inflationary caveat That out that material. envision Now, able we half end. it think little a little bit what all will But get the of I don't to about I for third we further may stretching as at - that closer think to wouldn't kind a quarter, being incur address costs. increases we we'll

Matthew Breese

Got it.

and geographies pretty the me, across The just last you two you around is point, diverse Okay. this and credit, markets Mid-Atlantic. first touched the the one for the really at that. Northeast from footprint Thank

the are categories about those valuation think markets, maybe market there some areas color you pronounced? real seeing movements have commercial any that? been estate what more the provide could across And where you As you’re on if

Christopher Maher

A things, Sure. couple Matt.

country. parts First, say fall and more the That's as I to of much. than up tends not much in Northeast to bad. be lot go don't that we other would to We surprisingly don't valuations and good a the tend tend as stable

give concern not portfolio none all footprint there's - So, any in of the the the if out all across Northeast and would are under really are the at indications loan seeing classes that pressure. that us of we're those anything

markets the Probably point market, you That different be very strongest say markets I in said, out. they're Jersey overall as would and Boston. the would New

reasons, two lack properties a there has some For New cities. migration of is well Jersey. doing certain Jersey of from New in Jersey to from benefit Shore and the continues out been the

the So like suburban has around even inventory remained low stuff office.

think Boston, York, same the looking in kind classes. up bit across office much comments maybe New markets have I'd where Obviously, just there. seeing And it's don't board being areas market metrics to more a asset and about would at in spotty. of the all We're cautious. Philadelphia, some Joe kind a I be ask make of some we those little But strong although very you're of you in extra

Joe Lebel

loans. we've that I business many million. number clear $XX We don't Yes, think around pretty about been about district somewhere earns have think I central is

you If York vacancy interesting lows out medical pretty in and a Boston, office lot, The have think I space multifamily. Chris thing we've but much numbers near ridiculously relative some it in New the on seen - to all-time point. time all lab the and carve is

So people are in the city.

that areas classes some be So might outside adversely retail the be been other you really haven't of about other or office, asset that concerned it whether affected.

Philadelphia of performed softer a stuff we markets, though admirably. little I majority have vast the is downtown the think

non-recurrence with which you'd of have everyone as - to I questioning normalization, - you one-off the is good been the the in when exception what think events line folks. other quality I for hear been of these kind the is when any industry refer asset there is all think biggest and of so challenge has

what to consider close normalized a you even not environment. We're

the but do increases, with there may expect So road, some definitely be We aren't. the nobody's seeing down rate that you yet. it stress

Matthew Breese

lines in Fed, I all like? the disclosed? are does those it outlining from ultimately June, was the at that follow-up the disposal? end do the along guidance provide we think And customers, Right. earlier, banks your and with What looks being curious up And combinations. the work CRE can FDIC, you that the tools had interagency OCC, what how

Christopher Maher

normal I used our than with forbearance. Look, restructure times. them, a use when of put reminder we Hurricane whole industry would we hit that's during Matt, a the kind to more Sandy the and them on of used in If tools market think during loans that COVID. just anything, for example, people borrowers, have We them all used work

think we support don't I a a we're that got going if And structure path to gone. you new think talking anything know, you good have and But credit can that. that I be that, decent that you've responsibly reminder you you're have it, that restructuring a be forward but think want the it's the I like just borrower TDRs you disclosure has disclosing stressed since that going you're that. if are rules, is to to

things So interesting seen that rolled have our thus required that. year any the that credits we've have one of is of said, not this far

we're a situations, flows that we're having loans maybe rolling little may net generally service but support into little a rolling cash folks speaking. stress not are So lower seeing their seeing -

Matthew Breese

that's, last fact, cash LTVs? in And necessary borrowers seeing follow-up. a if me, provide from just for support in Are one willingness refi to a you

JoeLebel

to a - an very borrowers so few the and is they've far, We reservation, we've rightsize which loan, without limited attribute. asked in Yes. Matt, done it a basis

are best new relationship cognizant the think that they to in have course we are environment for borrowers may be relationships tend a this that very of other not the sophisticated fact action. the deal the of I looking outside with bank with also there

to good that we're it's if may do that want understand day want faith, to they X. and of from even a we operating relationships. So not something They those continue perspective

had so not we've So adverse those impacts any far. of

Matthew Breese

Thank all appreciate my I Great. taking questions. you.

JoeLebel

Matt. Thanks

Operator

Marinac question now Montgomery Scott. Janney open. Instructions] [Operator from next Our comes Christopher, line from Thank your Christopher you. is

Christopher Marinac

morning. Good much. very Thanks

in regulators want Just sort of real from years looking in you ago. us at of question. these commercial follow really anything are up changed tests on to terms give how years Can old on and the update your Matt's Has concentration estate mind? an

Christopher Maher

don't has anything Chris. that I changed, know

In the and you're they're has just make there's they markets years would your that be ago, a to looking going now. at expect sure I expected reminder same are disciplines few think change stress portfolio to when this, what proactively particular, they looking a questionable things testing that have you're like changed.

being little handle is or a bit have able are. that The will in risk those another. risk And your sometimes most direction on important whatever look, position one you positions, your shift demonstrate thing to a

their I ones risk regulatory can making wall is that which higher the is think might the portfolio way be in expectations in discussion advance. enough there at you the where this would individual of early know high banks having the you be done rather that loans, is but maturity are And see around loans looking going sure one homework, your important. existing so that guidance, they fund the

CRE does risk sure that issue. like investor risks make fold cause So capital plan. relate liquidity because into ultimately, an wouldn't And liquidity going to you look to you're to

stress in the now you a out, So know of have we're we're earlier in that actively year about if might solid and that 'XX, the loans in courses the action a right two you're 'XX put or to rolling loans at talking position. looking and bank you 'XX, rolling taking

new, a So In more lot have do you I The you're expectations more that get focus meaning to change. cases, the to will intervals may new, think level reporting but some going the don't are be certainly questions. reporting. may

strikes me the are have you exactly says. But expecting monitoring do So a do not you you before. change in sentinel certain But a more cases, there some I that's of expectations. to process, stats have monthly guidance may or to in report or what quarterly reported wouldn't it that just know

Christopher Marinac

going stress up mentioned. and as Chris, when I you not on test is And other Great. you interest liquidity It just that's guess the CRE factors, helpful. about more loans, rate. it's

Christopher Maher

to example, looking We're that - think to relying guarantor. hasn't They're they're want if position guarantors for case. going The are the we're done and When in see figure we're - flows we're at want hard the rates one the guarantor, liquidity we've as that you homework that upon cap verifying Yes. our little it, of they're around about sure out to any right loans look, the over to a going going now. stressing to to is make rolling we're that all challenges that cash changed. have

they a have history rates there I think environment, feels lot you given not can some everybody like rich increased have are transactions pull should in of cap appraisal. the but don't markets, so a into you of

to So that thoughtful, to work they're things. on look a have and you've that that going sure make you're documented your handle you

Christopher Marinac

you follow-up Great. disclosure has sort just slides of made the the do about the of And long-term to relationships. in sort customer my with

was the in the eight numbers that of one I was think years slide.

funding at deposit to hopefully kind we deposit valuing we way that rates, of time you given look going or the that have? relationship of as your of to sooner on think through resetting what's end the base kind As advantage best sort the forward

Christopher Maher

more acquisition Yes, I around having than very for were served the that the history we thoughtful acquired think through of long acquired and years. to their in substantially each we of was keys one and which communities our XXX built were the very companies several had base a deposit of it we is banks of

went we were institution. particularly we in that when impressed in, multigenerational by due relationships diligence, So these with

those that folds base. of into our majority of relationships deposit of vast quality the kind We the and have held over

We have a bit split in think do of little we about Second markets. the is thing deposit have metro we deposits a base.

So areas Jersey. rural. and have we Jersey a I more characterize have flavor there's different and And populated the in York those well. deposits that as to But Philadelphia in lot we as in would of of deposits densely New little in New markets parts a New

Zelle our the see longevity have what were levels service base, think Pat We're relationships of very I our So and times value acquire, to what most mean accounts Debit was which in that's think up intact of that these over that Wire a to produce referring it we allowed of chose kept helped that's Visa XX all doing when we their heck and reflects of I for. our turn thoughtful year. fact data. that deposit And those dollars we and you and lot what's a the customers and us Venmo a I the ACH to. with they're to deposits and

Christopher Marinac

Thanks for all taking questions Chris. the morning. this Thanks

Christopher Maher

Thanks right. Chris. All

Operator

Chris. you, Thank

next question Manuel now from line is your Davidson. Navas D.A. from comes open. Manuel, Our

ManuelNavas

good morning. Hi,

Christopher Maher

Good morning.

ManuelNavas

I understand kind potential benefit liquidity that of clarification In be loan the just in type the high NIM. the deck, that low upside Is growth. contemplated deployment justifying liquidity that - slide benefit like and of offer the about to potentially talk to could you it to single-digit guide kind not towards great. the of Any demand Or end is of range? benefit? would deployment

JoeLebel

think seen those the have companies profitable slowed costs just a both that sides, activity. say run I start has borrower the cancel fiscal double I'd right? I'll So that C&I bit has and wouldn't say they that So demand on it's - evident borrowing

for growth. delaying they're activities think I some

loan impacting that's demand So in C&I.

house, the the I most On the CRE side valuations of important thing. think are

is really buyer, If vetted buy. to this fully Is you're this on opportunity the an be to you're bottom? a wanting

you're with If normal higher adjust still a rates. trying seller, may be to you're newer what to

the good the So - for we that happy gotten doing with that loans news doing, markedly us is at yields that. that are we're have we're

like today that we'd put in be you perspective. do think know good loans quarterly good So higher. if that's just I do them to it can on and volume But news. the don't you actual like I the basis, a a

PatBarrett

take demand the just Joe side So gave I'll the side supply you answer. answer.

we year, our If are. loan-to-deposit ratio from course And you of down think about how quarter fourth we've heights. this our moved liquidity brought pretty over the where we has meaningfully like

any come part, banking most seen severe and rapid system to change have the most without for of deposit base. through seeing of the that We any behavioral arguably our us have in shocks one the

and we're need to so, going a see try things out and find - change growth not kind we're keep very a lower as think resume of But don't If sake to, we're a of to loan start going we're well at appetite liquidity that point we emerges. ratio. just not and to we go And higher our our where risk kick the loan-to-deposit driving for right printing the spend positioned loans. higher

Manuel Navas

thinking you a pipeline far right yields to Can comment yields pipeline on a yields noticed of the question And month? close so Is have of you have bit improved the were in I that liked be about if that's would to the pipeline. - origination mix? have I your pretty Just what demand, higher. this type little

Joe Lebel

a how higher. pipeline be yields fast come origination I'm yields you to the Well want have happy look, little always up. with

it. I customer think on we're of yields just of that have the end the we now six one costs ago, in dichotomy sevens. look were in pushing of course, higher the origination other substantially. fact you're it, and if end about even that talking you low always months on the But up And gone between relationship at sixes, there's funding

see where X% will yields the lot you we I a in that tell book of us, plus. activity for are those construction

spreads through we to continue the quoting see remainder have pipe, pipe that today, you'll bled of the may older stuff stuff that those we we're that yields as as have think had I was remainder through where treasury the below rise. So, the in in bleed was

Manuel Navas

was talking I in any from of how about has been the available, much the how color We've come? still from per line it's se. utilization. Like added on much for a quarters. of what pipeline not is that there Is been construction that to kind couple know

Joe Lebel

availability. to construction utilization would come. of don't book what's it's pushing of XX% C&I average, I XX% their on I is utilize on better C&I. But borrowers to their XX%, exact tell a you, availability. typically still the of bit a than for from The us little perspective, XX% availability have about tend Yes,

that do And you projects of because of to construction to of has kind in to selling for-sale some with of And course, converting stuff. at that they the that the off, the are any or those finish, that paying tends fact as to properties. are stuff those multi they're end other be perm, tend they're

XX%. So on XX%, over maybe little a average exposures

Christopher Maher

And are book construction mix the to the very quickly. is moving properties

look, saying, possible loans a the term I lower construction is finish want rate, to lot rates rate. at than cost. it's as ironically, are So the this construction not that project Folks quickly because surprising the right, as

a to or it, whether markets of the Northeast, this can for if get stabilized. And you means for our throughout there done. things is can rent, it's rush you lack So thing it sale in get finish inventory that

duration kind we an it not a upset And I'm love sold out little have early, the bit. see But impact come seen bit faster have projects of that. So, on the you get know of about finish yield. to than a think. what, little I'd down perspective, from a credit does you

Manuel Navas

know update the more fee last as my I trends - if that you resi year. any are on be just part of started strategy. fee But is newer resi can there's just can you side of on leverage those the mortgage mortgage full that any in initiatives can And kind of of plan, especially this operating if question the touch trends? and other of light the

Joe Lebel

- driven a have really a a to availability marketplace. actively residential inventory, more really the to news - it's especially the of have valuations, are into as by for bad in in as in especially of of That's drive the and year, that our least news inventory looking at prop space we've being perspective, those perspective, sell originate to else. the time can. we is in we turn something X.X% in as good sell folks try want I lack We each mentioned, an Look, our mean think to best activity. to I opportunity -

run I that in corporate but us additional to go do for a significant fee are the clients amount as through our our the relationships. that we treasury of treasury our the have deepen we're opportunity revenue from we drive - management, to clients, business, bank we way and think initiatives those trying

One is little commercial of take lower the our consultants when management loan out. opportunities treasury is a bankers and have to be demand we now bit and

and that how Have think into 'XX. that, to for best will And income head more choose conversations fee of to cash we'll they and their with I products we us. generate about and cash can help wallet that use we as deepen and of treasury clients share see maximize start as we if them more our use help monetize

Manuel Navas

guys. Thank That's you, really helpful.

Operator

Thank you.

comes open. from Schiraldi Frank our your line next We now is have from Piper Sandler. question Frank,

Frank Schiraldi

morning. Good

Christopher Maher

Frank. morning, Good

Pat Barrett

Frank. Hi,

Frank Schiraldi

ratio? I here in under mentioned XXX% you remain the deposit that it on just you ratio loan governor of be - know, funding just growth Is loan that as to growth, just, - and the but being that or much Just to that as this on that a kind comfortable the don't the there. do is below talking about seems XXX% expect like though see Pat, demand as you expect pullback from to issue

Pat Barrett

- ahead, think guess I I go Chris. sorry, it's pretty

Christopher Maher

say where I'd fully what always has an comfortable we're that XXX% where been area Frank, Well, is we're rent.

better get XX, don't events favor XXX year, whether we all under we or but hung the up of to XXX%. it's given being thought this So, on

watch we'll situation eases. it this So, as liquidity

drive We above get that company a never show occasionally wanted XXX% we've or like but that might to XXX and up quarter, that much XXX%, a to been remains.

a we're our conservative So, just be on little to bit going end.

We haven't really changed our overall outlook.

Frank Schiraldi

ramp to therefore given reducing then ability quickly loan to Is - to exposure driver what have levels? to kind the side sense. pre. on likely you do makes come be C&I sort could if up if what do up and growth that and you And mentioned see you it ramp say main Okay. more you think back you the - normalized of would again growth of more And the

year? the you that thoughts are Fed it rates? back comfort what Do Is demand growth the system? leverage done ramp kind more up is for having as think the loan raising your Or as a see of simple into - brings lot on to that

Christopher Maher

walk that? don't Joe, maybe, And why through you

Joe Lebel

absolute and when it's I you, understanding they clarity. certainty would the - the about corporate a worried finished that Frank, the feels be they raising, and Yes they little tell bit if if conditions Fed more - client I don't of lower. If the if sort is economic see

Loan-to-deposits, or loan-to-deposits, I one I made whether two about right? think franchise matters. with loan-to-deposit, comment comfortable stability, it's and same XX its if the you're deposit Chris your deposits, don't think it

what around comfort there. is more your It's factor

the the least. to us want the not stuff borrower. corporate time They're shelving being. borrowers think telling Corporate putting see all that of lot is not which had I rate rates. it's they're for adversely where They just think I on me it's solely They're hold with at driven, things projects. out. a fascinating. on tell the I same shake And corporate are affected haven't borrowers

corporate end, not said, think from at looking by the Can these too result is us. the low We It's that knew in lot for by game? revenue. have end benefited it a I they projects, do our look, that. if borrowers They're rates were which see other intimidating too we long. of what's they

we see the also the borrowings So, to see I space if have space. think certainty. C&I do think if in can construction we get I the residential some in opportunity that get, we'll increased more we

think the recently opportunity benefit I a I more treasury. really a because about builders do bit because around just also is typically an inventory. lack if been home off XX-year there they think to they're them rates starting for there's to some there's articles new of clarity get more driven

rate more little Xs, stable, Xs, rates bit bit little end I think I less a in high if low is we'll a the more that see activity. think or Even get if mortgage you If volatility. up

Frank Schiraldi

point continues curious your forward I we inflection do as where don't year. the XXXX. just about think to a early the NIM, book that color. normalized talked you you Fed, would in an for through get NIM have we if of end mean of get And since the more a Great. curve sort is, That's get it I XXXX. kind if higher? rate hikes loan about where mentioned talking the you figured environment would that of then imagine We be stays from or you reprice kind ask you And - the rate one Pat, great then I'd expectations like about of I two

PatBarrett

Yes. Impossible to know.

thank be hikes. much, framing Street curve But to going where go, actually are very to are forward Fed thinks trends by So as way. expect and stability would I and telling deposit you going lower. influenced be behaviors rate that us by rates to already margin it's much are they the is that it deposit as The going

for X.X% X% have between We somewhere good history of operating and a margin. pretty operating

if changes So it dependent midpoint of I revert be on is just behaviors. something say versus of much to hard could surprised to rate timing happen expectations of that that we the that fast how is going in and how to wouldn't range, of that kind can But really back range. deposit in be

We are leveraged.

$X go out fund incrementally to liquidity. And than had did back billion, billion we more so we of and $X excess we have do when

Frank Schiraldi

the question, just front. at but of No, end I about appreciate it, repurchase way lower repurchases at seems and I of that a obviously it's here? are think it to imagine tough lastly, the I color. know priorities that just of and kind kind would stock least on -- is the like term near through the

Christopher Maher

Yes.

that's how market We're would we to way that. the going Frank. even to not think right consider unfolds I the watch it, before - think about we're

We deploy things. other to and growth have that over opportunity time organic an and capital

radar next quarters? the our in on as So couple right unfolds it's Obviously, not of market now. we watch the things

Frank Schiraldi

right. All Great. guys. Thanks

Operator

Frank. you, Thank

line Michael open. now question next from KWB. from Perito We our is your comes have Michael,

Michael Perito

good. KWB, you? Good I That's morning, like that. guys. How're

Christopher Maher

you? How're Mike. morning, Good

Michael Perito

Good.

appreciate a the Just you Obviously, ones. I all two so guys quick lot, covered color.

guidance with this three the back possibly point it low fees on theoretically business is the two or you coming for and I if sale kind backtrack a the is then think, I to some first to Just of little a year, know this think rates fair picking mortgage up on maybe hopefully on fees. to, stabilize? ago guys side income gain this swap Pat, specifically, the don't questions on but half you provide like about to of

PatBarrett

Yes.

very a that's think assumption. I fair

suppressed. So everything was depressed or

Michael Perito

reach still efficiency the you making these were guys of - of you I if what the aspire or before look we does speaking then and at might are talk for any variables the the into guys this, this, bank of period pull a getting you answers largest to of But eventually great. range the what you managing to, kind together of you And one. there think mean that low Is mean, of you the how And be provide the back normalized probably few NIM but a are time? moving it. second, a willing just secondly, to or know to kind other assuming around few guys that here. that XXs. kind into over if are Or kind updated - is guys all bank of margins Got a questions of there your would was come forget to I the like does expense to? win obviously context initiatives. ratio if updated about NIM any there's I could NIM context of the

Christopher Maher

don't to leverage change, it's a we Mike, I to answer, operating we're trying all hard given this, in but things say improve would when know question might obviously environments.

to to NIM So came to get below if back we expect possibly XX% X.X ratio even the would or be XX. more historical the X.XX the down efficiency rate, to

Michael Perito

Perfect. guys. it. Appreciate Thank you,

PatBarrett

the and kind Maybe and little take thinking - a a of it NIM about of in little of rate maybe changes more about more of out the it ratio, terms Mike, the revenue overhead think volatility equation. impact

bring So continue we range of And working we're that assets, a as and we in that Xs expenses, further, bring into the down - percentage on low it. to think percentage keep total can assets. maybe of X.X the

Michael Perito

this morning. that's guys. color the Yes. perspective No, Thanks that well, and sense. as it helpful all makes Appreciate it, for

Christopher Maher

Mike. you, Thank

Operator

And apologies, Michael.

is We last line have Davidson. comes D.A. from now Manuel from open. Manuel, your Navas our question

Manuel Navas

some Hi, do been back details wholesale I of you're What answered. and half jump the about any the kind across my questions back question. deposits But FHLB? of were have the out And broker of just have that? of you smaller thinking a of I terms on and year? borrowings Can give on the how term

Pat Barrett

Sure.

it earlier in four XX% a and range in termed two, year did across the of FHLB early the our maturities of year we three out about borrowings - we and So year.

differential and like only was four those So two, 'XX. overnight than starting maturing the between rate 'XX three, basis be points. will XX late Interestingly, 'XX,

borrowing if level So of couple we'll next of for need X%. we're in the that years. kind comfortable longer for the assumption, at you take just below wholesale we locked least of higher And that of all

Manuel Navas

broker or year Any helpful. on half the seasonality. Okay. That's of thoughts back deposits, using the thinking about

PatBarrett

which channels through work or to continue be able and our are initiatives that generally to to billion over last at Yes, and time, $X other away where types going organic year whether that that we of to to goals which be I and where CD of institutional about a non-broker is today, the on is zero have levels of operate. think growth it's the first we we back were we get other deposits, combination brokered down chip quarter

improve. for avenues watermark brokerage high a CDs as as they this roll of we'll continue other funding think as to So and those and take off

Manuel Navas

Thank Appreciate that. you.

Operator

you. Thank

remarks. We have now hand closing for questions Christopher to no back further the on line. I will

Christopher Maher

Thank We the and October. the OceanFirst look care. forward summer. with published your we you. in quarter rest Thanks, of are to results Take Financial time appreciate your of and support after third Corp., enjoy today and speaking you our

Operator

for joining. and you concludes Thank Thank call. Ladies today's gentlemen, you. this

You your disconnect may lines. now

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