OceanFirst Financial (OCFC) 18 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Alfred Goon	executive
Christopher Maher	executive
Joseph Lebel	executive
Patrick Barrett	executive
Frank Schiraldi	analyst
Daniel Tamayo	analyst
Timothy Switzer	analyst
David Bishop	analyst
Matthew Breese	analyst
Manuel Navas	analyst
Christopher Marinac	analyst

Call transcript

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Operator

Good morning, and thank you all for attending the OceanFirst Financial Corp.

Third Quarter '24 Earnings Release Conference Call. My name is Bree, and I will be your moderator for today. [Operator Instructions] I would now like to pass the conference over to your host, Alfred Goon, Investor Relations at, OceanFirst. Thank you.

Alfred. proceed, may You

Alfred Goon

much. XXXX and Alfred Earnings Development of very OceanFirst Goon, to Third Corporate Relations. Investor Quarter Call. and Good you welcome morning, the SVP Thank I am

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

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

Christopher Maher

morning, Chief Officer, Thank our earnings quarter third thank performance by our results Lebel; you, join in to interest all President, morning, joined with and you We XXXX to able our this who've discuss I'm Financial Good opportunity Joe and Pat our Alfred. Barrett. been appreciate our your conference you. This call. to and

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

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

discuss include nonrecurring respectively, Capital, investments Home Spring related both million to compared Garden Our later. support increased offerings, $X Operating the million quarter. which will in finance essentially modestly revenue and and of prior Loans Garden expenses expansion earnings earnings. remained and flat State to which at reflected to fee the our These be stabilization accretive to acquisitions specialty $X.X $XX operating will and we'll million net of income, of interest by expenses million $XX linked

loans XX remain XX $XX,XXX days points, as loans points a or receivable strong XX to metrics quality total increasing X Capital net and nonperforming respectively. in to company which and for XX.X% XX and estimated to continued continue as basis Tier recorded due of past ratio continue Asset tangible to the capital loans common our the And increased basis of recoveries equity percentage to book $XX.XX. loan growth levels $X.XX build by quarter. value with

last shares repurchase Tangible we was value period the has grown cost at as program. weighted the company's book average X.X sustained quarter X% company million share of $XX.XX. under September year. the compared Through XX, growth a XX,XXX shares incremental per an to this nearly while XXXX, Capital same repurchased repurchased

dividend $X.XX on With of company's the earnings. capital we represents cash a XXXX. QX are position, Board now is credit into approved solid Further management, and per consecutive quarterly capital GAAP quarterly focused dividend organic common in share. growth and the XXXth on and driving of XX% metrics This cash bolstered increasingly our

quarter and turn regarding to third increase efforts performance over our some provide At Joe the more this during rates. details I'll point, to our growth call organic the to

Joseph Lebel

directly in originations to $XXX of increase Home attributable of for $XXX million million $XXX acquisition with Talent The increase Loans. reflects Garden originations. $XX the Chris. the loans loan totaled million residential The prior that of Thanks, State to and company's compared C&I pipeline million significant a quarter, a included quarter the are

C&I hires of XX this lending Our in new the deposit expanding bankers continued has our teams channels this X C&I our gathering year, focus including and date to Northern additional onboarding and month. Virginia team deepening resulted in on

to growth in with business due the acquisition. our moderate of growth residential modest expect year I QX, in remained in C&I continued growth lending remainder the for recent loan net Talent While the

compared reprice X% on quarter. brokered retain in growth our net approximately This ability CDs. by expect remain additional planned consumer, this increase to of of recruiting to continued confident teams. increased of our from $XXX coming deposit and We in deposits commercial balances quarters, C&I was the also and million commercial runoff prior Deposit government bank environment in and focus

assets metrics remained low remain quality and respectively, criticized and strong nonperforming loans Asset with X.X% loans, while only delinquencies of X.XX% and classified at representing total levels.

pre-pandemic in These credit our to to metrics favorably and strong performance portfolio. continue compare reflect levels

total the commitments. for the As The Chris of for with net total company flat to of our ratio totaled being ACL coverage at the recoveries pipeline our of company's losses provision X.XX% remained credit noted, recorded half quarter, provision $XX,XXX and $XXX,XXX applied loans.

on word other last income. One

$X.X we build Trust of in income. of million continued nonrecurring quarter revenues largest sale charge on see a attributable improvement increase deposit nice our our to our business service linked and was sale other aggregated the did of which While to a gain and property a of income, sale, the portion vacant mortgage and and

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

Patrick Barrett

Thanks, Joe, deposit flat X.XX%, call. was essentially million to our of XX%. beta to the everyone and on respectively, interest were prior and the income morning $XX and cycle-to-date margin good as Net quarter

outlook funding $X As both modestly increased both loan million Noninterest during subject rates, anticipated, $XX mix to the interest at quarter. we and million in trends. our growth, expense believe but we're net could interest that and our to income for margin, trough shift

While about, nonrecurring. the to this of majority the was million Chris related that of nearly and talked $X acquisitions increase Joe that was

see capabilities, which production to $XX some quarter. fourth our expense volatility including expansion impact acquisitions, mortgage originate-to-sell the expected, you the million with Our as of expected quarterly primarily in be should volumes. rate, is both should new that the of continued companion the Note million to in be run full projected range, reflected a quarter $XX to mortgage

near stock improvement CETX earlier, appreciably in growth, we expectations quarter, XX,XXX registration the shelf our repurchased see that security housekeeping, expect of our update of term. shouldn't our matter to as XX.X%. strengthened a with to combined the as organic capital Chris did share morning. you Note in material additional growth price, with this mentioned the We given repurchases early an Finally, in in shares but ratio recent

While plans near-term capital repricing any maintain And equity issue to May to posture issuance. preferred we readiness sub should refinancing next both accordingly, we in and want of debt any choose do a year. have have of instruments, do to we no

At this the portion begin question-and-answer of point, we'll the call.

Operator

Sandler. [Operator with from Instructions] Your Schiraldi question Frank first comes Piper

Frank Schiraldi

to ask albeit just I wanted acquisitions, X small.

talk walk a lending real specialty of if about through you on And bridge But their mortgage group. like of kind is the Garden, their just balance up that. around specialty. wondering little bit estate maybe pretty they're business expectations Spring Just could business more sheet? could and seems guess, I a It you that if size straightforward. us ramps

Christopher Maher

Frank. Sure,

head on about a on gain -- primarily really business. Garden State, efforts it gain hit an mortgage to just our it's augment to convert You the sale into business origination our

a provide feel that augments direct-to-consumer they and doing, So channel what we about that. we're of kind very good

Garden. been In terms for has bank Spring Spring the many client of of years. a Garden

So the operation really well. known we've

infill of predominantly they joining upgraded. Former you've banker, to really got in where for need ran it it renovation an and housing of where Jay housing units to and the be Goldstein, rehabilitation Really, the who us. run that that is need urban markets us for there's provide financing ran be well, kind continue will company, will

Philadelphia, additional they're They they Baltimore, Washington, Originally, dynamics Philadelphia. subsequently some important doing Pittsburgh. beyond X that. to D.C., expanded in to and And growth this. started The

First, really very business. it years. a the profitable managed it's They've over well

are Nearly assets, they as The which their is of well. thing borrowers XX% pretty women-owned attractive borrower this their of good And X/X what about second CRA are do composition important or is businesses. qualifying to minority to us. close is

up it kind in credentials those So helps of our areas. beef

grow This to the this be stay is a will But the careful on not growth top in very fast. have business in terms of of. and U.S., rate you

wouldn't we sheet. under do It's grow that. more of I growth being to balance wouldn't probably significant a forward. expect a than I rate grow much our going to it year. think going So expect it XX% But

Frank Schiraldi

Okay.

missed it, business? what Sorry but sort that footings the are if the currently I in of

Joseph Lebel

About $XXX Frank. million,

Frank Schiraldi

that. guess, Okay. And last on I just question

seems there's frame, obviously production that pretty inflation in rate and certainly levels a change of capital then back was since obviously, business concern you the kind it business, XXXX, had now. time that interest curious, Just around coming significant There in like a of where bit levels. XXXX into with

that So sheet What just sort of the this curious about $XXX of were how what -- on came it's -- balance over? is million footings stuff originated? that these where still -- in kind years

Christopher Maher

sheet business be model, months. So been our around for you're years. on tends Based that. This let duration, XX it on this their talking funder the balance company. about We were for loan warehouse to XX clarify me just to on has

experience in cost -- these cases, spectacular, has net units balance the able sheet the rehabilitated X really, So they're that's a years. delivering in credit now the in originated last stuff affordable pretty The and at to is are most housing markets. on been

not have any they or these long-term doing either finance So had loans. renting on difficulty

they of projects borrowers is borrowers, their this are all folks a repeat And a So and have lend a and not This multiple almost of years. hold business. done know kind bridge business. so over is that the

in they credit a have modest margins. interest couple beat of very costs, strong missed the So net not years. And very last

Frank Schiraldi

Got you.

Okay.

in it sheet. for already of the on incorrectly being about terms balance Sorry the thinking stuff

of some So the loan fourth the see we'll growth now thought in I I'm that quarter, the some about acquisition. thinking was that when idea here, pickup

we'll still of customers? well are pickup brought new of that new a Just and it the some do over, get combination are just color that around of a catch-up seeing there's what expectation all teams amount And brought or once your bankers bring decent starting here, up curious terms give as Joe, that the little we is a election, just ramp of to if you've you of over in just XQ. that strong as But thoughts can demand? in think pickup you in you of the XQ just terms kind through some see pent-up

Joseph Lebel

Sure.

OceanFirst with or I active months to they've it's activity X to C&I the Typically, have to combination, earlier think that are been going and prospects on need a client Chris from pretty the the of bases above, years that I the say but talk to of sort And Frank. proposition. a hired meeting get footing, seeing for bankers. bankers catch those sell in is We're it I the think bankers that -- all and or I hate them all X had in year. we

in started to So numbers, in you're in and that the that we've some has seeing guys year stride their the seeing some of recruited of those pipeline. early hit the it

have clients navigated activity? Can the through clients they right? the in especially especially seeing What's it own that if chain this pass their fairly into doing? the like? supply years, -- also the we're What's at they demand, positive. almost You're bullish price from heading inventory they're a year, looking consumer What's is along increases that through the have uniformly which So hearing 'XX, them?

yet, there's that well. sell We're trying direct-to-consumer bump Home Garden down doubt I rates don't of side that business we're bit. with of originations see pipeline that market, secondary a on seen segment balance that to And some think some we've resi We've the income. of that to has us I happy in State obviously think of Mortgage no as volatility of the though. helped the course, then, seen XX% in Loans the the but And helped little in all activity. actually a bit has in and the sheet

Operator

Tamayo comes Raymond question with next from Your James. Daniel

Daniel Tamayo

side. Maybe we on start just funding the

know bit little in in of all has a kind just I the fourth the on about the cuts repricing then and future with -- quarter. you how the thinking You you're about rate how that the cuts? And in gone prepared how but your rate touched maybe margin the -- how out how remarks, quarter plays since talked it third

Christopher Maher

Sure.

XX mean, something I point want to I deck. just first show Page -- of the to would I slide So you on

that several which might can rate at more see CD the favorable. our we've the wanted we push there point become running really be You quarters. down, will fire portfolio knowing a to that last And been down over that

or about talk a Joe to million can then for So I'll And let position year-over-year recent the that was down and bit cycle. this about Pat it's repricing, XX%. down margin. $XXX little by comment us about

Joseph Lebel

We've fortunate. been

that expectation more the be was primarily we aggressively bps little reducing did. at a but about were rates that rates reducing bit by least there on, early to the XX think Fed have you'd the wary I

CDs maturing and to retain -- been So that over the been able client the to pretty well we've has stable. of retain. wanted we XX% And

broker us So to to valuable happy want business. to And we're on continuing allows to which that. more base, grow lessen about is dependence we're Anything client any add it our important because even that? and you

Patrick Barrett

you term to reprice talk the think letting whole my you that which boss would rate projected and further for cuts thank we combined near know we thing me able mix and least industry deposits guys to is. growth get, scenarios interest Yes. of how and my to margin, there's what favorite about in down, the is are kind net do. a I growth first, I just Look, with say, of importantly, what about quickly of the roll range

but for I think So could way that could forward, either that be as say now, we expansion going could term. I see we're other, near direction optimistic stable go modest move cautiously we think I but of the fairly some the would right very be kind it's to that that or -- one

as thing in we next see important the we amount and that the good that be year. to through the of we're And start a growth that and like we're not pretty but steady move to able about dependent into feel achieve. level that more the to fair of volumes revenue. will probably is do again, on of talk wild growth to And dollars going NII

right how So with momentum once Things the XX good, out some and Fed. all about that we're to think rate XXX% deposits. everything of tried lined see now. in look start get to of now be effect easier lot from repricing everybody see right plays that point trying I do the And to growth will to start it but the on up is just the reprices We'll the on a cut time. fullness down first basis take we

Daniel Tamayo

touched little of capital as bit maybe if much and it opportunities Chris, the that buybacks, But capital the there. you appreciate you talk the a you're follow-up. about deployment about All just how right. release I about crux in -- all the everyone. those color a a from kind seeing of on opportunities Maybe could think of plug being -- considering. deployment

Christopher Maher

Sure.

rates. on in So is thing growth rates a comes board, is the leaning pick towards little a bit I our organic what think of capital we're growth up that, as to we best can do think, that use -- growth we cushion

lot can would rates current The second But and Pat different it repricing about, little with next things of those. thing instruments we're referenced a there's have comments, we his we some in thinking And do expensive. a they be at May. bit today,

some is So may optionality. we're a of over little all the keeping effective capital. on use of pretty side give time, to capital us some We decide or a to that redeem

the the look, So backs little around organic a our including pretty buy going and -- and is own optionality our appreciated, favorable, for repricing at to we but backs And keep anything, when next we're as but we earn always May. earn lengthened bit price for stock. capital now, still have the look instruments growth

Operator

Tim KBW. now have Switzer We with

Timothy Switzer

I references impact business do income expect it, quarterly I'm one other missed Your clarify increase million there. mortgage a million a for but that's guys $X sorry from to something your acquisition? noninterest you income in on misunderstanding I if in or if if I'm section. the expenses the don't typo guidance me? you know Could $X thing what

Christopher Maher

You're not misunderstanding, Tim.

talking also not is Spring So want but I clear. Home, expenses things, from X Garden The previously. were to guidance incorporate Garden State about we though, additional the the would just lender there's be which

more of Garden Garden and So that's State. probably those than a a things combination actually X little Spring

That's a the profitability. would at of be expect year, The to we about think best running net it it the business we'll contribution next over be to a way of that this. course

expenses in going number, in, to as so a a come based you be may fee on see and direction rates predominantly we're the that, little a pay earnings you it's our quarter-to-quarter be significant because It's force between of some volumes sales so be to commission-based strong too. will it. volatility going But in But not income very sale business, on correlation other. money, gain amount there not the a bit going to to that more and volatility on or it's represent giant should So one will see that some of refinances... really a there volatility

Joseph Lebel

And seasonality.

Christopher Maher

Yes, seasonality.

guide a have that expenses that XXXX, the So include -- turning capital you of return but Certainly, know the expenses. of to on profit all business guys the baseline high, on we one we of is ratio as It's in is the business kind would be that today. efficiency well. expect It's those -- those high of this.

other. trading the of versus kind one we're So off

Timothy Switzer

sense. Yes. No, that I think makes

large we balances your For loan shouldn't a on sheet, clear, modeling already in be balance Spring Guard, be right? to the they're pickup since just

Christopher Maher

Correct. the in sheet what difference the on $XXX between was It's million. really balance our

net, it's plus be loan other So to quarter. a pickup $XX growth from activity, during the that million going about

Timothy Switzer

I Okay. are yields And time on And provide maybe how you you move change over on can rates as loan down? those understand. that details to then expect any portfolio? what the

Joseph Lebel

today in those I Tim, bank, go today's are down yields is where in So And rates of yields attractiveness our imagine loan as the about down, the will to which typically there. trickle yields market are XX%. the XX.X% they'll be but commercial always one would above

ticket been to had prior had typically even XXXX in we founded Their And since in X the a former their Jay for under is them And previously. speed X market and that to in this sold a and that's XXX,XXX. that proven urban business to space company they average formula because markets.

So with funding, that's gives of cost us. return. really that our us better much of a And been attractive course, to

Operator

David now Hovde. with have Bishop We

David Bishop

guidance. and On the OpEx the income fee

earnings step Should of $X says is And that income in quarter sort it that dollar like what it 'XX. the should continue? that expenses expect how like does -- basis intend think later the should and there's about So to on million. those think just we move up I think accretive the where be to looks first that Chris, I like. in up fee the period a than we implying what about slide no a breakeven is we --

Christopher Maher

there. You're Spring be of that Garden right, would there'll a $X State. and Dave, million combination the time, related Garden income a be the expenses over of State profit and roughly sense equivalent fee Garden the was to But

going not you're $X going million fee So quarter. income to by see up a

I half and would estimate and probably and fee like bit can But you. little half growing over upon that. It's payments about income all think expenses commission $X.X And and of a be that dependent volumes the million the best about again, of give time. and

David Bishop

Okay. Got average of those it. Obviously, the And from some then here. origination, regarding flat I get the loan continue cautiousness plateauing creep the new to yields saw the saw you up. relatively narrative, pipeline deals

maybe in terms there's curious or the loan overall to more have not up eventually optimism Just of continue? why pick you

Christopher Maher

just it's Yes. in is there, but There not QX. optimism

things little so cuts, But So to rate we they happens understanding with yields want be. it roll path straighter side. much takes see going a play through, in little feel see in how how we've We liability are what the while. to got recent out loan the a

So of short very a we rate or in combination duration, the in that's XX QX, either repricing the days. floating next have stuff repricing

line cause a given start income a just have got a in mix a or in a up. every see or another net But QX, any could a we've interest that or shift there to being older there. to growth little And we're we NIM and But to that here going one trough, moving takes, quarter, one basis quarter, or Pat's of cautious of then to points the But our we is interest standpoint, income, couple pretty kind feeds moving the which net the underscore your in other. will we're earlier over a lot you're the a little comfortable this and though. right EPS in we'll is of short direction. term, in be way I'd think creep position. comments and little From puts be loans But better reprice time, and point, of

David Bishop

color amount I it. projection the saw of that that there. in a can was provide then longer-term Got Okay. increase, terms special you of the mention of in more [indiscernible]? And substandards. increase Any thought Apologies.

Christopher Maher

to X.XX% we've in talk is our been sheet. Sure. can the I'd you through the This The and I'd well average pretty it everybody good below well peer risk significantly appears number, industry are and total of the kind point actually below of there. that balance categorize and see below our of X.X%. always as loans. X this it it's news is XX-year the on recognizing It's Slide just prompt numbers about what slide, group.

of note Northeast cycles, on which benign. the in terms is when Page call out I'd XX, we far the of more experience credit also typically

eye and was of special Things that in So we concern on. credits. keeping we're had credits out. we them particular around come down to brought We to That's no or an no do. and a come what pattern it cluster kind couple mention. of There those

bothering something it's So us. not that's

Operator

We Matthew now have Breese with Stephens.

Matthew Breese

right. I fee dead don't income a on of horse it I to here, mean numbers expense just have some make the beat to but just sure wanted I

an we expenses know be So kind suggests that this in think income suggested fully -- but But sure volatility little I because near-term to I not here. of $XX your baked. going Pat, a just obviously, be kind I increase because on of And a we're this to have clarify rate bit there sale a run gain I wanted just coming. million quarter, presentation asterisk there's to might the make is there's there's operating higher of commentary wanted

Patrick Barrett

is. There

on fourth think range our $XX is a I So to $XX quarter million. guide that million

-- that of million. if would that, would the it midpoint So you be $XX take

Christopher Maher

on Sorry. Spring X. we closed Garden October That's because

expenses So were QX, Does the transaction QX. makes the in be sense, in that rate expenses run although Matt? will

Matthew Breese

it. got I Yes.

Patrick Barrett

XX begin -- up it in expense pipe The seeing to the build XX Both so these days load or way. getting this near EPS into term. accretive we're whether discussion it to to transactions are to about takes they're our the without and because front not, efficiency on around sell. or accretive to of debate near-term a ratio improve earnings State think also, Garden And they

really the not banking much all needle mortgage So side, revenue moving and expenses. the on seeing the fee income but we're the seeing we're

guiding And side on are Garden expense than similarly, for that full XXXX. dropped inclusive these you haven't we're towards from better we involved, the be the outlining We thought, the informed and our in it frankly, Spring do and outlook, our guidance probably on because about benefit we and everyone be year us outlook of would more better for the clarity earnings. for with saying have to to QX January talk to that on

Christopher Maher

but to pipeline One put did not little idiosyncrasy the there, just a point on buy State. it. Garden We of

So because kind applications the pipeline. didn't producing pipeline, they they've step buy we all of did started been but with into that the new we fresh along, not

is we're under under but ours, everything So our standards. originating

Matthew Breese

the think of $XXX kind we to about into gain should pipeline XX this September and much resi as channeled as on you would attribute sale? of How business, being million of

Joseph Lebel

State, trying So that the pretty of which of the from $XX million. Typically, the be is Garden as world the million well. quickly. XX% is sale at pretty I you'd that end pipeline work quarter we're originated of our And on gained toward eligible. to number Garden to good think was of, similar came State in expect stuff $XXX it

including get of wide that successful market will thinner is few is a force I quarters range a mortgages, because in set, there product us have a largely which for a we little secondary sales. think take to sales jumbo it very

Matthew Breese

anecdotally, from banks agencies, hearing still focus companies, kind up. competition of there's lot Okay. a of picking is But insurance the I of that appreciate on concentrations. some then, the obviously, And we're bigger Chris, CRE that.

that, on off curious some ability there's some sheet activity sheet. this seeing selectively. kind well. you're so this as to your I you're for the being stuff comment off And that to was see increased if could opportunity of payoff kind quarter. refi given balance we're balance your I of And the And seeing just this or not refi whether you think of

in if verticals I And a The then on Curious little there, towards bend as $XXX really That me high. was it's in? commercial is just the kind secondly, of some new what's for construction yield. struck loan. or pipeline curious of you're a

Christopher Maher

That's really a question. good

spot So that market freed first, is real around estate you're the up. competitive on commercial

credit. private seeing You're

is You're looser seeing GSEs. of insurance Mac has the there out and companies and at most appetite for voracious Freddie forget one standards the that bank biggest standards. let's are a writers than multifamily not

is there see there. think, an opportunity, I So to rotation some

that really well The has way it about worked we're for thinking is us. portfolio this

credit We to quality. feel about good continue the

We that a to are may roll be. folks or amount that fair looser will attraction to lower or of either whatever credits let offer off willing pricing structures

You'll opportunity to things It's slowly going example is Spring well. see of also our because the do we take CRE go down. that. quickly not going a drop good that we're to the to do concentration And Garden

duration at duration, into will a lower rotate a We shorter CRE longer out yield credits well-structured of slightly CRE at paper higher yield.

duration, the you it's focusing mentioned, Joe as construction. look As Similarly, pipeline, short in over we're a things XX% those. on on yield at

more we're kind are of when we I we're to the just to the get and and up in credit ground. and land remind, we've making duration, know and of generally that put before, entitlements We're construction, harder get this know not talking And risk it's market, about said that rate, when involved out assets. a the into higher-yielding to in assessment, absorption going floating and we comfortable evaluation on short things

So a of that's just trend. kind

capital. off You'll on rotate but segments we're going will you the not or portfolio pay into we are going dramatically to us see quickly, a concentrations come better to going think we're return see run it -- down, to

Matthew Breese

it. Got

Okay. ones. other I had X

make wanted floating just the is, one guidance I that correct sure of and X/X of kind prior Pat, rate first have I The about to book. loans is

enter deposit And for period. still loan expectations that's of rate-cutting and would I to love sure make to want hear thoughts accurate. sustained Just as a around kind your betas we

Christopher Maher

Sure.

mean, good. From of So yes, that. by bit that general, loans and assets versus loans, It's right earning think securities. mix I a X/X, guidance for basis that a securities proxy, just few days in -- fullness going And just ago. now X/X, kind in itself a super X/X -- a in carry of modeling true versus reduced that points it's kind rates of of I the but a pretty But of would early I say, and a promo on little very out remains to to time. between the remains play super I to weeks difference give what variable. again, There's me some of rollover we've be for of perspective, early repricing is beta might purposes, around the short-term to adjustable I think have and with XX tell. my good that's head, our And kind

I'd draw just deposits, and that's the to do slides. our your average the of see, in XX spot spot But which -- Page on the of attention you kind costs versus

get So down. the see yields -- how beta to I this quickly XX% loan Whether a lot that of come I early we'll think. of one rest quarter, be able down, the better deposit coming first with signs, think beta the the we a that through feel or of talking to as you something guess, comes relative we'll down between about and of into year in I a do or pricing

Matthew Breese

strategies. I And one last just then appreciate that. is capital on

for do know your like sub-debt to of I was be on in. paper, today. think go banks to will X date higher feels the changed true that like about we regardless, feels maybe debt if And curious, the of predominantly a second to XX%, May, right little you that's common bucket You that it. the where but might it re-upping cusp a the it capital might bought the in flip the you it little Is where preferred bit. be sources has a cost But both of sub It don't going debt, we point used subject hits. And see at actually And if preferreds. is where the have likely capital fully common. I thing there such outcome the those is looks May for at around things here -- like it's a reset would as not sub of components. some

Christopher Maher

mix of what's capital evaluation on when you're that instruments option the an that, -- make right that reprice. capital. don't based be And out I to and of we're to cost point could the that going right the

sure every we're so is to now of we us. have everything One up the doing lined that we available making things option have right

a but the I There just appear any banks are we know year. high to this buying coupons keep issues seeing interest watching doing been price our want own. to sub pretty we've seen down you're deals. have some able the to we And us. last would the debt, coupon had We've on some pay that sub-debt frankly, something being it sub-debt don't market of in the few of that of optionality And the in

and mean may So that its off repricing at not the date. we thing pay whole --

we chunk and down quarters But of it may at in redeem it. point couple then afterwards, just that a

common really earnings, to loath up the unless to we've we're or the good out the out take there. think are have kind using issue and it So there's time over said, built to preparing capital really, instruments we're out markets at look option a stack. take of well, reason. we capital using That it We there's functioning capital well-priced

have compelling. So to it would be

Patrick Barrett

it's And mover perspective -- not a particularly either. an a from earnings needle it's not

the after magnitude, XXX benchmark that right of got remember issued like starting reprice with we're with we COVID. points you both yields. than I at look higher those to to the XXX you lockdowns But think if basis

were point. dislocated things a so at bit And that

XXX those coupon million talking we're instruments, look for we up on those on points combined. both pretax going both if basis even basis But annual about of at an XXX $XX or of

not be doing to huge drag. nothing a So is going earnings

optionality are good lot having it. don't feel what about about we spreads certainly like said, being of opportunistic and and we XXs. Chris not market. do looks and to get recover to all-time still hopefully bank That's into debt But Xs as an and attractive sub at bank a how the at pricing So issuing place are people when want spreads highs seeing it

Operator

We now Davidson. D.A. Navas with have Manuel

Manuel Navas

like of it's high-yield lot I versus wanted up not have the on kind retail what's answered, but seems of deposit profile follow savings. growth, commercial? A been kind to customer just questions It my of driving the strong

little of you kind a You had a of just bit? walk Like CD that bit through growth. retail can

Christopher Maher

I broad if to just a were trend. you think I give

we of years, given in were that banks yields. higher business up little share wallet the consumer probably Over a paying had to the bit

basis like I our for yield points. For many was years, consumer think highest yields -- XX

pull to a share. position that the any offer when some turned in and able so to of And all, at wallet little a were back we market rate bit were we

we've single wallet consumer So of business, would board. across in the but the be kind biggest share component gains the made

has business Banking Government well. Our done done well, banking Commercial has

operate it's which see. amount little to markets We wallet source of a share a it do in a of So would the available. very where is gain in bit nice dense households, be everywhere, tremendous consumer there's but biggest probably our deposits single

became bit So little when rate that we're of a we pull kind payer. able a of to in

with of the done us. Early holding that It's Fed call so a the that there indications experience started little fine are hanging before with even too in a particular bit moved, consumers and we've there. to but actually we're early repricing our the repricing got beta, are we've

Manuel Navas

retail really that was so And hit from the C&I growth great on yet. deposit just team Is This franchise. the hasn't the ramp more comment? right

Joseph Lebel

brought bankers some the the I not We've which positive. in forward, is extent expect but that think to seen we going in, new increase we that

Manuel Navas

Okay.

synergies? fee the to Can at to They they standalone. a all, offer how nice any offer, On revenue talk they if you seem bit businesses, more appear be little about diversification.

Christopher Maher

of an think that improve should because and I one identify something help adding you're your a that do they capabilities that the company thing, kind that and kind you you about and specialized done time thoughtful inspire well people company of there's it, Any the DNA just has be you're really opportunity. better. talent to of if

bringing So there's talent these both on. cases, no question we're of in

on. in their bringing saves deals. on, approaches. either expense bringing few of and competencies, We're everybody very their their virtually We're are systems these There capabilities

we times a to make way, don't in a platform they giving things better little a sheet in a by better make and they're a attributes So to us that about going thinking and that. And them balance them little customer hope like and hope have response we today.

for cultural and focus speed Garden they And very to another pace, be that. on loan going can are customers' this and doing your commonality biggest never wanted a and is between Spring always Garden say, my you wait approved. and to faster. few credit days I State Customers at facilities to the probably paid answers But get for the focus get rapid delivering on

and add? that's to but going DNA mentality, John, us culture just anything think else you'd So help in I

Joseph Lebel

I'll more one Yes, point. case thing. add And probably good just a in

grown, as Gardens a This size I difficult -- you very to is well. be much Garden very to small does what consider our what Spring loans. As bank we've more grow, do it's construction what for

not $XXX,XXX. that do be activity. clients volume it's going very watershed look, $XXX,XXX to of to construction looked a So But maybe had to those small us under $XXX,XXX, or

avenue market an a have than faster that's lot we to can Now speed we be. a and

so us. and got I you not sometimes, to going this to good. where admit you're is So think benefit be good And you're where a to

Manuel Navas

around basis embedded different in extra briefly kind thoughts And shift that what forecast rate pace rates? I a changes NII? of XX appreciate term steady NIM is scenarios. for that to just or of cut, NII sensitivity types meeting its just beat skips Can I near the back that to of terms point kind that to the goes NIM, stable-ish a color. the and What's of in of growth

Patrick Barrett

Street deviate I cutting -- from beginning of the plot combination to the We dot XXXX of so think, much rate December Yes. and Street cut a what a near the XXXX. down we've terminal got or some the don't through of and November likelihood of, the still and by pretty XXX term, steadily then

to basis nothing sensitivity on. initial quick there's up we XX basis the a in versus position for doubling a September From skipping XX there rate of or points cuts, those when math that got the we cut. points So did we're rate either taking that some

quarter million again, to XXX XXX, $X.X XXX assume question if perspective. the a timing just offer is acceleration you back an on bid ultimately the of lower terminal kind But the in really rates to And from that's down Fed that was a going that rate something about -- range.

long impact doesn't over the at term, have all. much So it

significant. a is going bit get little If be little really might a little bit or in remain a expansion we that rates margin last down little slower, but asset-sensitive a more with given change were we to compression materially in but associated shouldn't the come still a not dollars although neutral. quarter, percentage or quarter bit quarter, it We're close either, to this faster the bit more probably fairly we than

Operator

comes the of from line Our final Christopher question JMS. Marinac with

Christopher Marinac

for that? it next as take credit what's possible ask now? develops? with upgrades rates to of Could see path kind wanted you lower does long interest Just And and about some the glide year how

Christopher Maher

and of rates. It's has of stress I has that be may we question, down in that the But has rolled mention, kind don't that without sensitive not leases see criticized, we by all occupancies to have a It portfolio Chris. been the and a good are that is bit. experience more few sensitive tenants special these mean, classified, to a our rates much rolled today's credits even Around able you margin, little concern SCRs way, come in to stress. the carry. virtually will which, and The everything about. might that, and

outside seen increase of office, many over in you've especially rents cases, But time.

XXXX, loans up be and are due the in these underwrote XX%. we they're So coming rents might

the handling easily. rate they're pretty So interest stress

watching but we're a we credits, that don't handful So lot a of it's have maybe anyway.

a So difference. it wouldn't make significant

maturity the a and are a the It finding into that little derisks into credit. people other what XXXX there's more also I Probably market. more earlier, folks into the know market, bit. would question private is especially wall stepping play coming we're

So there these are for a of loans. takeouts lot

has here issue. there from time So worst will be have to I really us, There thoughtful. CRE although a credit always be think around and to are concerns an that behind time probably the you

these to want very -- you things. So you never humble about be

Christopher Marinac

than, about market others there, become that you've years? as That's helpful. say, several do to or continue Philadelphia And for time more people business Great. the D.C. expand would a marketplace, in hire over just and follow-up you and just that bigger more been

Christopher Maher

people giant a It's metropolitan could. market, certainly It million X over in area. robust that

focus Our C&I. though, in is there,

It a grows it little balances. over it So the in us of add, speed better term. clients move takes slow may not move over which area. But your joined a you be talent draw with where may that a And utilization in you'd whole the Anything short them then the very little to a at takes little to just while C&I because while bit clients. have Joe? pleased the lot been we've credit that's

Joseph Lebel

No.

you business there, hit the in in the operating the think lines focus CRE, probably is it going mention which a thing head. on to and age. not I right good I day is was that this

Operator

CEO, does I to session. would like Chris to for back That his And the Maher, final conclude remarks. question-and-answer hand

Christopher Maher

Financial Thank upcoming We much. time and holiday after published are with support our to speaking today January. We Corp. fourth we results quarter of our all your OceanFirst you. offer again look season, in the continued and wishes very to forward you Thanks for appreciate your best

Operator

the Financial you from Corp. QX for Earnings of I you 'XX concluded. may now all call can Call. OceanFirst joining Please Thank today's disconnect day, enjoy the Release rest the Conference your has confirm call. now and

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