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Edited Transcript of OCFC earnings conference call or presentation 28-Apr-17 3:00pm GMT

Thomson Reuters StreetEvents

Q1 2017 OceanFirst Financial Corp Earnings Call

Toms River May 3, 2017 (Thomson StreetEvents) -- Edited Transcript of OceanFirst Financial Corp earnings conference call or presentation Friday, April 28, 2017 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christopher D. Maher

OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank

* Jill Apito Hewitt

OceanFirst Financial Corp. - SVP, IR Officer, SVP of OceanFirst Bank and IR Officer of OceanFirst Bank

* Joseph J. Lebel

OceanFirst Financial Corp. - Chief Banking Officer of OceanFirst Bank and EVP of OceanFirst Bank

* Michael J. Fitzpatrick

OceanFirst Financial Corp. - CFO, EVP, CFO of OceanFirst Bank and EVP of OceanFirst Bank

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Conference Call Participants

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* David Jason Bishop

FIG Partners, LLC, Research Division - SVP and Research Analyst

* Frank Joseph Schiraldi

Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research

* Matthew M. Breese

Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst

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Presentation

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Operator [1]

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Good morning, and welcome to the OceanFirst Financial Corp. Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

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

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Jill Apito Hewitt, OceanFirst Financial Corp. - SVP, IR Officer, SVP of OceanFirst Bank and IR Officer of OceanFirst Bank [2]

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Thank you, Austin. Good morning, and thank you all for joining us. I'm Jill Hewitt, Senior Vice President and Investor Relations Officer at OceanFirst Financial Corp. We will begin this morning's call with our forward-looking statement disclosure. Please remember that many of our remarks today contain forward-looking statements based on current expectations. Refer to our press release and other public filings, including the Risk Factors in our 10-K where you will find factors that could cause actual results to differ materially from these forward-looking statements.

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

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [3]

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Thank you, Jill, and good morning to all who have been able to join our first quarter 2017 earnings conference call today. This morning, I'm joined by our Chief Financial Officer, Mike Fitzpatrick; Chief Administrative Officer, Joe Iantosca; and Chief Banking Officer, Joe Lebel. As always, we appreciate your interest in our performance, and are pleased to be able to discuss our operating results with you. As has been our practice, we will highlight a few key items and add some color to the results posted for the quarter and then we look forward to taking your questions.

In terms of financial results for the first quarter, diluted earnings per share were $0.36. Quarterly reported earnings were impacted by merger-related expenses and the acceleration of certain director stock awards of $0.04 or $1.1 million after tax, resulting in core earnings per share of $0.40. Core earnings per share included a $1.4 million tax benefit associated with the adoption of ASU 2016-09 related to stock compensation. This tax benefit will vary in the future and depends upon option exercises and equity vesting in future periods, much of which is outside the company's control. Excluding the impact of these items, the company's base tax rate for the first quarter would have been 32.7%.

Regarding capital management for the quarter, the board declared a cash dividend of $0.15. The company's 81st consecutive quarterly cash dividend. In addition, the board has approved a new share repurchase program, which authorizes the company to repurchase an additional 1.6 million shares or 5% of the company's stock. This program augments the 154,804 shares that remain available under the 2014 repurchase program. The authorization provides the flexibility to repurchase shares, which we believe is an important capital management tool. However, given economic conditions, growth prospects and our guidelines regarding both tangible book value dilution and rational earn back periods, repurchases are not anticipated at the current share prices, absent special situations that could arise.

Turning to organic growth and the overall operating environment. First quarter loan originations were strong at $183.8 million, including $106.9 million of commercial loans, with a weighted average yield of 4.52%. Included in this figure is $29 million of commercial loans of credit, which did not contribute towards outstanding balances, but will provide revenue over time.

Net loan growth was modest due to elevated payoffs, but the pace of lending was good and the $139 million pipeline as of March 31 is a positive indication that organic loan growth should be on target for 2017. At the same time, with interest rates rising, we put some of our excess liquidity to work in the bond portfolio, which evidenced the 32 basis point yield improvement as compared to the prior quarter. Core deposits also grew modestly, while the cost of deposits remained stable. An important accomplishment as we integrate the substantial deposit portfolios acquired in 2016. The cost of deposits increased just 1 basis point versus the prior quarter, while overall funding costs remained level. Strong loan originations at improving yields, and an improvement in the yields on securities combined with stable funding costs to push the net interest margin to 3.56%, an increase of 16 basis points versus the prior quarter. Eliminating the positive impact of purchase accounting yield enhancement and prepayment income, the base net interest margin increased by 12 basis points as compared to the prior quarter.

With the $175 million of remaining cash in the balance sheet as of March 31 and a loan-to-deposit ratio of just 91%. The outlook for net interest margin is stable to improving. While additional interest-rate increases could expand margins further, the slope of the yield curve will have the most significant impact, it is impossible to predict with any precision.

Operating expenses were elevated for a few reasons. As we discussed last year, the nearly simultaneous integrations of Cape and Ocean Shore shifted our focus to operational integration, which drove a variety of direct expenses, which are reflected in the merger-related charges, but also a series of tangential expenses that are included in the core run rate of $29.5 million. We've been fully focused on meeting the financial service needs of all our customers in the OceanFirst family, while ensuring our regulatory compliance meets the high standard the company has always tried to achieve.

As we complete the integration of Ocean Shore in the second quarter and consolidate the 15 branches discussed in the earnings release, the core expense rate can be decreased quickly without threatening the franchise or our regulatory compliance position. By the fourth quarter of 2017, we expect quarterly operating expenses to be well less than $28 million per quarter. The Ocean Shore conversion is on track for completion, the weekend of May 20 and will result in a full integration of our operating platforms and expanded access to customer service points for Ocean Shore customers. The integration process is already complete in some areas, such as residential lending, where originations are growing nicely and loan pipelines entering the second quarter are strong. Based on our experience with the Colonial American integration in 2015 and the Cape integration in 2016, we expect to well execute the transition. In both of the prior acquisitions, the deposit portfolios have experienced net growth, while deposit costs have remained stable or decreased slightly. The branch consolidations noted in the press release include 5 locations in our legacy Central New Jersey market. These consolidations primarily affect markets served by multiple branches, and in some cases, automated services will be provided as former full-service branches are converted to remote service points, with smart ATM or Video Teller Machine capabilities. Although, some attrition has been modeled for decision purposes, it is our plan to retain virtually all of our clients in these markets.

In terms of asset quality, credit performance is strong with net recoveries of $268,000 and benign delinquency trends. Our nonperforming loans did tick up by $8.1 million. These additions are not indicative of future issues in the portfolio, and we don't expect this to have an impact on the income statement. The increase in nonperforming loans was attributable to a single commercial mortgage, and a small number of residential loans. The commercial mortgage has a strong guarantor, and is secured by a recently appraised property in Middlesex County. The additional residential loans are also well secured, with one of the loans totaling $528,000 under contract of sale and pricing that should provide for a full recovery prior to year-end. Between net recoveries and provisions, we increased the allowance by $1 million during the quarter.

So in summary, asset generation and margins are on a positive track, while we continue to integrate the acquired operations and improved efficiencies in the legacy business. As a result, we feel comfortable, the earnings are on a positive trend for the remainder of the year.

At this point, Joe, Mike, Joe and I would be pleased to take your questions this morning.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Frank Schiraldi with Sandler O'Neill.

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Frank Joseph Schiraldi, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [2]

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Just a couple of -- first I wanted to ask on Chris, your comments on the pipeline sort of refilling here. You talked about elevated payoffs in the first quarter, which held down net growth. So is the elevated payoffs, is that story just sort of volatility and when these things payoff. Or is it still attributable maybe to some run-off in the Cape deal that could continue. Can you just give us a little more detail on how you're thinking about those elevated payoffs maybe bleeding into 2Q and beyond?

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Joseph J. Lebel, OceanFirst Financial Corp. - Chief Banking Officer of OceanFirst Bank and EVP of OceanFirst Bank [3]

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Frank, it's Joe Lebel. The payoff that we've seen last year from Cape is dwindled. Some of that elevation is the result of a couple of participation loans that Cape have done. We expect that we'll see a little bit of that bleed into the second quarter. Nothing substantial, I think our originations will be more than sufficient to support it.

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Frank Joseph Schiraldi, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [4]

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Okay. So is the message then that. And I think the message is that just loan growth -- net loan growth should pick up as the elevated payoffs in the first quarter, you wouldn't necessarily expect to be repeated in 2Q?

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Joseph J. Lebel, OceanFirst Financial Corp. - Chief Banking Officer of OceanFirst Bank and EVP of OceanFirst Bank [5]

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Yes.

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Frank Joseph Schiraldi, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [6]

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Okay. And then anything new to how you guys are thinking about cost saves that you'll capture from the branch rationalization. In the past, you've talked about reinvesting, and I think you even in the release kind of talked little bit about that helping investing that money into commercial to help grow that business. But if you could just remind us, if you're thinking on what if any of that $6 million falls to the bottom line?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [7]

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So there is 2 parts for the $6 million. The first is the 10 branches that are in the southern market. And the majority of those savings are part of that merger integration modeling that we did. So those were kind of previously accounted for, in our view. The additional 5 branches that -- the philosophy we're following is, this isn't an iron clad rules, but a rough rule, that we want to take about half of the expense saves down to the bottom line, and the other half would be available for investing in both technology as needed and also commercial bankers. So Joe continues to hire and add good commercial talent to his team. I think the best guidance I can give you, which is going back to my comments earlier, is that we're very comfortable that when the dust settles in the fourth quarter, you're going to have an ongoing quarterly expense rate that's under $28 million a quarter. So I think that kind of tell you where everything is going to wind up settling. So that would account for taking some of those saves, but also making a couple more commercial hires.

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Frank Joseph Schiraldi, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [8]

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Got you, okay. And then just finally on the tax rate. I mean, I'm assuming the benefit was outsized this quarter. But if you assume the stock price kind of -- is around near current levels at the end of next quarter, I mean, is there any way to get a sense of how much benefit was just sort of a onetime in this quarter versus just your regular options exercises throughout the year?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [9]

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Sure. It's hard to get a great handle on it, I can talk or make a couple of comments about it. The first is, we have a significant amount of additional options that are in the money. Some of which will be coming to the end of their exercise period next year. So at current prices, I would expect that we would see some option activity over the coming quarters. But as you know, that's -- individuals making their own decisions, not the company. So whether they decide to do that this quarter or next quarter, it's very hard to tell. Our guess is that, you're going to see benefits now, and again $0.04 is probably a pretty big number, but there may be quarters like the first quarter of next year when you got some of this -- the options expiring that you'd expect to see a few cents of that. I wouldn't be surprised if it bounces around between a $0.01 or $0.02 for the next few quarters and then maybe at some point, you have one elevated quarter, when you got expirations of options coming. So people are going to take them at that point. So I don't think it's going to be 0, but it's unlikely to be $0.04, Mike you may add.

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Michael J. Fitzpatrick, OceanFirst Financial Corp. - CFO, EVP, CFO of OceanFirst Bank and EVP of OceanFirst Bank [10]

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Frank, I got a little bit of -- some more color on that in terms of numbers. So with the tranche from 10 years ago that's expiring on March 1, 2018 and the remaining options in that tranche are 136,000 at 16 81, so that'd be about $12 in the money, that's about 1.5 million of option value between now and next March 1. So most of that probably be in the fourth quarter and the first quarter next year. So $1.5 million dollar option value, the tax benefit would be about $500,000 probably $300,000 now and next -- beginning next year. Now there's obviously options that expire. Well after that -- and those exercises are fairly random, they're hard to predict. But we know that there's 136,000 shares will surely be exercised within the next 8 or 9 months.

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Frank Joseph Schiraldi, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [11]

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Okay, great. You don't have the -- no, I guess, you don't have the fair value of those handy like when you granted them, do you?

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Michael J. Fitzpatrick, OceanFirst Financial Corp. - CFO, EVP, CFO of OceanFirst Bank and EVP of OceanFirst Bank [12]

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They were valued 10 years -- while 10 years ago, they were probably like between $2 and $3, that's been probably the fair value at that time.

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Operator [13]

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(Operator Instructions) Our next question is from David Bishop with FIG Partners.

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David Jason Bishop, FIG Partners, LLC, Research Division - SVP and Research Analyst [14]

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Chris, excess liquidity. Just curious how you view it now versus the end of last quarter. Obviously it come down. Just curious you think how much in your view is left to sort be redeployed at this point?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [15]

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Yes, so I could make a few comments about that. I think we said, last quarter, dollar averaging did make sense. So we did move a little bit, we saw an opportunity in the bond book to move that a little quicker so we took that opportunity and invested more there. One of the reasons that we don't feel a ton of pressure around the loan book is that making those commitments could wind up tying up the balance sheet for, in some cases, a number of years. So we like the dollar averaging on that side. So I think Joe's comments earlier, $30 million with the growth in commercial is a little wider than we would like to see, we think we could do a little better than that. But we're also not looking to deploy all rapidly. We focused in my comments about the $175 million in cash, loan deposit ratio is 90% -- sorry 91%. So I think after we go through kind of some of that excess cash position, we in the past, have taken the loan-to-deposit ratio up to 100% or 101%, which I don't think would be an issue. So if the loans are out there in addition to the cash we have on hand, we do have the ability to access. We've got a bunch of wholesale funding availability through the Federal Home Loan Bank. So if the deals are the right deals and they're hitting the right price points, we can go little faster than that. We're also notwithstanding the comments about the share repurchase program. If economic conditions are good, and Joe can find the loans, we're reserving capital so that we can grow the total footings as well. So I think we're still in the mix shift kind of phase right now, but a couple of quarters, we -- if things continue to be good, we could just look at growing the balance sheet.

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David Jason Bishop, FIG Partners, LLC, Research Division - SVP and Research Analyst [16]

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Got it. And then as it pertains to sort of the risk appetite. Any improvements, I guess, in the commercial real estate segments that maybe changed your view of that asset class?

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Joseph J. Lebel, OceanFirst Financial Corp. - Chief Banking Officer of OceanFirst Bank and EVP of OceanFirst Bank [17]

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David, I think that the -- I think the mantra for us has been that consistent methodical growth. We do see some improvements in pricing. We saw it in the first quarter. We continue to think we are going to continue to see it, hence, Chris' comments about not rushing out in the market. We continue to have a pricing discipline with the pricing model we have and the good thing that we're still doing is we're attracting talent. So we've recently hired 2 additional lenders from BB&T. Last quarter, we hired a lender from M&T. So we're getting good solid regional bank talent that come here. So I think more or the same.

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [18]

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Yes, I'm going to classify the CRE, specifically. As we said, I think last quarter, it's about status quo. So structures have gotten a little bit more rational, pricing still reasonably competitive. But with more rational structures we're seeing more deals we're comfortable doing.

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David Jason Bishop, FIG Partners, LLC, Research Division - SVP and Research Analyst [19]

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Got it. Then maybe just a follow-up on the nonperforming inflows. Were those out of legacy OceanFirst markets or there's -- is that the Cape Ocean Shore franchise?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [20]

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So on the commercial side, there was just 1 loan, it was a legacy OceanFirst loan in Middlesex County. And on the residential side, it was kind of Shore properties coming out of the acquired portfolios predominantly. But they're well secured and some other kind of odd things about the Shore community. I mentioned the one loan, this is a houses under contract the sale, the guy just wanted to use the house for the summer to be on the beach and not pay any mortgage. So we're not going to accelerate that or foreclose or go sell it. So that's one of the idiosyncrasies. But at the end of the day, that portfolio, the residential portfolio, particularly at Ocean Shore was a really strong portfolio, where we've no concerns there. The FICO drift analysis that we've done shows that the borrowers are very strong and that 10-year charge-back history, charge-off history for the Ocean City portfolio was phenomenal. So these things will happen from time-to-time with the blip coming up, but we're not concerned about them.

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Operator [21]

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Our next question is from Matthew Breese with Piper Jaffray.

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Matthew M. Breese, Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst [22]

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Just tying 2 questions together, you made some remarks on the loan pipeline and you made some remarks on the reinvestment of saves into commercial lenders. So I guess, I wanted to get a sense of what you think the loan growth outlook for 2017. What that loan growth outlook is?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [23]

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So I think -- we think we can, in 2017, grow a little faster than we did in the first quarter. So we think, and most of the focus is on commercial, although, residential should be flat so they may contribute a little bit as well. So but on the commercial side, I'd say that the $30 million-or-so in outstandings. Remember, I did comment that we had about $29 million worth of undrawn lines. So we booked as well, which are great and those would draw from time-to-time. So I would think that the $30 million we might be able to do a little better than that, but you're talking mid-single-digit to high single-digit on commercial, and probably mid- to low single-digit overall with residential provide a little bit of lift. So I think we should be able to do better than we did in the first quarter, but we're not trying to hit a $100 million a quarter in loan growth.

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Matthew M. Breese, Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst [24]

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Got it.

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Joseph J. Lebel, OceanFirst Financial Corp. - Chief Banking Officer of OceanFirst Bank and EVP of OceanFirst Bank [25]

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Because we think that would bunch up the growth too quickly. And we don't know where interest rates are going. We don’t know what's the slope of the yield curve is. So dollar averaging is kind of our mantra.

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Matthew M. Breese, Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst [26]

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Understood, okay. And then going back to your NIM commentary, I was hoping I could talk a little bit more into that one, you said stable to slightly improving. Could you maybe collar that comment a little bit and give us the potential upside to the margin and what the interest rate environment would have to look like for you to get there?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [27]

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So let me take it in discrete pieces. So the first piece, just talking about funding costs. So we're not seeing any pressure to-date on funding cost on deposit side. So good news is, at some point, I'm sure we'll see that pressure. But based on our mix of deposits, we're seeing virtually 0 pressure on cost of deposits. Now my sense is at some point that comes, but that looks at this point to be probably still a couple of quarters out. So funding looks like a very comfortable position for us. On the yield side, I think that the progress we've made in the bond portfolio is pretty strong and probably not going to be repeated as strongly in the future. So I think the bond portfolio, we captured a lot of our delta there. On the loan book, so little bit about the mix of loans we wind up being put on, and some of that impacts the yield curve. One thing you will notice is that, we've favored putting more of the residential loans on our balance sheet as pricing has gotten better. So we saw 2 things happening, we did a little more residential originations, a stronger residential pipeline and virtually no gain on sale. So there's the lack of gain on sale is because we're biasing towards putting that in the balance sheet as those yields improve. So I think as you think about margin, we hope that it's going to be expanding. I'd be cautious about giving you specific number range on that. But I think we're pretty comfortable to be expanding, probably not as quickly as we did in the last quarter, but we've gotten very little concern over compression.

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Matthew M. Breese, Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst [28]

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Got it, okay. And then, Chris, you've always had kind of a longer-term vision on things. And I think since you've been at the bank, you've positioned it well on a couple of different fronts, including the commercial real estate concentration issue and the loan-to-deposit ratio. And I was hoping to get some insight as to as you look down the field now, what are some looming issues and things you're positioning the bank on to get ahead of the curve once again?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [29]

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Yes, what I would point to and we've talked about a little bit of this is the branch consolidations can't be viewed in a vacuum. So it's 1 thing to close branches, I don't think it's a terribly complicated thing for folks to do. But closing branches you need to have your act together on alternative delivery channels and you have to make sure that you are positioned around mobile banking, mobile remote deposits, all those things are -- they're actually very closely tied to the branch closing world. Second thing about the branch closing world is, as you consolidate branches, we've got some cases where we -- we're remaining in the property and we may remain in the property with the smart ATM or Video Teller Machine. So you may be losing a fully staffed branch, but you're leaving a point of presence. That changing nature of the branch, I think is a really important topic for all of us in the sector. And that implies not just the changing nature of the branch, the changing nature of the branch employee and what you're looking to have them do. And 1 of the reasons that we're not just capturing the branch closing expenses and throwing them straight to the bottom line is that we feel we've got to continue to make an investment in the people and the processes, and the technology, and they're all combined. The technology, look anyone can go out and buy a fancy piece of technology to have a good app on a phone. If your employees in the branches don’t know how to help your customer use them, don’t get people enrolled when they open the account, they don't work through that process, you're not getting full value. So I would say is we're working through this year, we're both funding and spending a lot of time working through the opportunities to make sure that our folks out in front of the customer are changing with the technology. So for us, it's not you got to go pay somebody to put an app in, it's a whole change in the branch footprint, the branch design, the staffing and making sure, for example, lot of our investments will be to make sure that our call center staff have absolutely all the tools they need to be able to handle customers. So as I look out and see beyond the commercial lending piece, we're spending fairly significant amount of time and energy on that. We're able to self-fund it, we don't think it presents a whole lot of pressure on the income statement, but it goes in part and parcel with your ability to do the branch rationalization, that I think makes sense.

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Matthew M. Breese, Piper Jaffray Companies, Research Division - Principal and Senior Research Analyst [30]

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Understood, okay. And then could you just remind us of your longer-term profitability targets with the 2 acquisitions under your belt and how soon you think you can achieve those goals?

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [31]

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So we're still looking at, look we know we got a bit of a tax benefit in the first quarter, which we're happy to have. But it's still, say for the full year, we expect to be able to get the ROA, our target is to get above the 105, and we're looking to get the return on tangible common equity in the 13 range and I think those are achievable in 2017. I think depending on now, the progress we're making in digital banking initiatives, the progress we're making in commercial lending hires, as we go through our planning process for 2018, hits stride in August. We'll be thinking through what's the right number for commercial lenders, how much commercial and residential loan growth should we see next year, how much investment do we need in these alternate channels and that will determine that 2018 if we chose to -- it might have a little bit faster organic growth as we feel we've got the foundation together and people kind of get it comfortable having integrated into the OceanFirst family.

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Operator [32]

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(Operator Instructions) At this time, I'm showing no further questions. I would like to turn the conference back over to Christopher Maher for any closing remarks.

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Christopher D. Maher, OceanFirst Financial Corp. - Chairman, CEO, President, Chairman of OceanFirst Bank, CEO of OceanFirst Bank and President of OceanFirst Bank [33]

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All right, thank you. Once again thanks for all that were able to join us this morning for the call. We look forward to presenting additional updates, as the year progresses. Thank you.

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Operator [34]

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