OceanFirst Financial Corp. Announces Quarterly and Annual Earnings and Financial Results

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OceanFirst Financial Corp.
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RED BANK, N.J., Jan. 28, 2021 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:“OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), today announced net income available to common stockholders of $32.1 million, or $0.54 per diluted share, for the quarter ended December 31, 2020, as compared to $23.5 million, or $0.47 per diluted share, for the corresponding prior year quarter. For the year ended December 31, 2020, the Company reported net income available to common stockholders of $61.2 million, or $1.02 per diluted share, as compared to $88.6 million, or $1.75 per diluted share, for the corresponding prior year. The quarter and annual results were impacted by the COVID-19 pandemic, through higher credit losses, net interest margin compression and increased operating expenses.

Core earnings for the quarter and year ended December 31, 2020 amounted to $23.2 million and $72.2 million, respectively, or $0.39 and $1.20 per diluted share, respectively.

Core earnings are non-GAAP (“generally accepted accounting principles”) measures. For the periods presented they exclude merger related expenses, branch consolidation expenses, net (gain) loss on equity investments, Federal Home Loan Bank (“FHLB”) advance prepayment fees, gain on sale of Paycheck Protection Program (“PPP”) loans, the opening credit loss expense under the Current Expected Credit Loss (“CECL”) model related to the acquisitions of Two River Bancorp (“Two River”) and Country Bank Holding Company, Inc. (“Country Bank”), non-recurring professional fees, compensation expense due to the retirement of an executive officer, and income tax benefit related to change in the New Jersey tax code (collectively referred to as “non-core” operations). Non-core operations had a favorable impact of $8.9 million, net of tax, and an unfavorable impact of $11.0 million, net of tax, to GAAP earnings for the quarter and year ended December 31, 2020, respectively. Refer to the “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” table for additional information regarding our non-GAAP measures and impact per period.

Key developments for the recent quarter and year are described below:

  • Earnings: Achieved record quarterly GAAP earnings of $32.1 million, with diluted earnings per share increasing by 15%, to $0.54, as compared to the corresponding prior year quarter.

  • Balance sheet: The Company ended 2020 with a strengthened balance sheet driven by a series of successfully executed strategic decisions throughout the year. As a result of these initiatives, tangible book value per share increased to $14.98 from $14.58 in the prior linked quarter and tangible stockholders’ equity to tangible assets ratio improved to 8.79% from 8.41% in the prior linked quarter. Highlights include:

○ The creation of a yield-focused debt and equity portfolio, which resulted in $23.6 million of net gains in the fourth quarter;
○ The sale of $298.1 million in PPP loans, which resulted in gains of $5.1 million;
○ The extinguishment of $343.5 million in high-cost borrowings with an average rate of 1.63%, providing a tailwind heading into 2021;
○ Total loan growth for the year was $1.54 billion, reflecting bank acquisitions and record loan originations of $2.23 billion (including PPP loan originations), partly offset by loan sales of $612.3 million. Deposits increased $3.10 billion for the year, including $1.51 billion of organic growth.

  • Loan forbearance: COVID-19 related loans under full forbearance have been substantially resolved, which allows the Bank to focus on organic growth and gain earnings momentum in 2021.

“I’m pleased to announce record GAAP quarterly earnings of $32.1 million, completing a year which began with the closing of two whole bank acquisitions and quickly became a year filled with challenges to support our customers and communities during an unprecedented health crisis,” said Chairman and Chief Executive Officer, Christopher D. Maher. Mr. Maher added, “OceanFirst is well positioned for 2021 as our customers look forward to the opportunities that are on the horizon and our Country works to recover from the pandemic. At OceanFirst, we remain committed to growing our Company and will continue to focus on maintaining strong credit, fostering margin expansion, and controlling operating expenses while seeking growth opportunities.”

The Company expects to consolidate four branches in the second quarter, with an expected $1.1 million in annual savings. The latest branch consolidations bring the total number of branches consolidated to 57 over the past five years, helping to drive a targeted average branch size of $160 million.

The Company’s Board of Directors declared its ninety-sixth consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.17 per share will be paid on February 19, 2021 to stockholders of record on February 8, 2021. The Board previously declared a quarterly cash dividend on preferred stock of $0.4375 per depository share, representing 1/40th interest in the Company’s Series A Preferred Stock. This dividend will be paid on February 15, 2021 to preferred stockholders of record on January 29, 2021.

Results of Operations

On January 31, 2019, the Company completed its acquisition of Capital Bank of New Jersey (“Capital Bank”) and its results of operations are included in the consolidated results for the quarter and year ended December 31, 2020, but are excluded from the results of operations for the period from January 1, 2019 to January 31, 2019.

On January 1, 2020, the Company completed its acquisitions of Two River and Country Bank and their respective results of operations from January 1, 2020 through December 31, 2020 are included in the consolidated results for the quarter and year ended December 31, 2020, but are not included in the results of operations for the corresponding prior year periods.

Net income was favorably impacted by $8.9 million, net of tax, and adversely impacted by $2.3 million, net of tax, of non-core operations for the quarters ended December 31, 2020 and 2019, respectively. Net income was adversely impacted by $11.0 million, net of tax, and $16.3 million, net of tax, of non-core operations for the years ended December 31, 2020 and 2019, respectively. Core earnings for the quarter and year ended December 31, 2020 were $23.2 million and $72.2 million, respectively, representing a decrease from core earnings of $25.7 million and $104.8 million, respectively, for the same prior year periods. The decrease as compared to the prior periods was largely driven by the adverse impact of the COVID-19 pandemic.

Net Interest Income and Margin

Net interest income for the quarter and year ended December 31, 2020 increased to $77.9 million and $313.0 million, respectively, as compared to $63.4 million and $256.0 million, respectively, for the same prior year periods, reflecting an increase in interest-earning assets, partly offset by a reduction in net interest margin. Average interest-earning assets increased by $3.21 billion and $2.82 billion for the quarter and year ended December 31, 2020, respectively, as compared to the same prior year periods. The averages for the quarter and year ended December 31, 2020, were favorably impacted by $1.65 billion and $1.75 billion, respectively, of interest-earning assets acquired from Two River and Country Bank and $77.5 million and $227.5 million, respectively, of interest-earning assets from PPP loans. Average loans receivable, net of allowance for credit losses, increased by $1.83 billion and $2.15 billion for the quarter and year ended December 31, 2020, respectively, as compared to the same prior year periods. The increases attributable to the acquisition of Two River and Country Bank for the quarter and year ended December 31, 2020 were $1.46 billion and $1.55 billion, respectively. The net interest margin for the quarter and year ended December 31, 2020 decreased to 2.97% and 3.16%, respectively, from 3.48% and 3.62%, respectively, for the same prior year periods. The compression in net interest margin is primarily due to the lower interest rate environment, the origination of low-yielding PPP loans, and the excess balance sheet liquidity which the Company strategically accumulated entering the economic downturn. For the quarter and the year ended December 31, 2020, the cost of average interest-bearing liabilities decreased to 0.74% and 0.88%, respectively, from 0.98% and 0.96%, respectively, in the corresponding prior year periods. The total cost of deposits (including non-interest bearing deposits) was 0.45% and 0.55% for the quarter and year ended December 31, 2020, respectively, as compared to 0.64% and 0.61%, respectively, in the same prior year periods.

Net interest income for the quarter ended December 31, 2020, increased by $1.1 million, as compared to the prior linked quarter, while net interest margin remained steady at 2.97%, as compared to the prior linked quarter. The yield on average interest-earning assets decreased to 3.53% from 3.60% in the prior linked quarter, primarily due to increasing balance sheet liquidity. The total cost of deposits (including non-interest bearing deposits) was 0.45% for the quarter ended December 31, 2020, as compared to 0.49% in the prior linked quarter.

Provision for Credit Losses

For the quarter and year ended December 31, 2020, the provision for credit loss expense was $4.1 million and $59.4 million, respectively, as compared to $355,000 and $1.6 million, respectively, for the corresponding prior year periods, and $35.7 million in the prior linked quarter. Credit loss expense for the year ended December 31, 2020 was significantly influenced by economic conditions related to the COVID-19 pandemic, as well as estimates of how those conditions may impact the Company’s borrowers, and the decision to sell higher risk commercial loans in the third quarter of 2020. At December 31, 2020, COVID-19 related loans under full forbearance have been substantially resolved.

Net loan charge-offs were $2.9 million and $18.9 million for the quarter and year ended December 31, 2020, respectively, as compared to net loan charge-offs of $139,000 and $1.4 million, respectively, in the corresponding prior year periods, and net loan charge-offs of $15.0 million in the prior linked quarter. The three months ended December 31, 2020 included $2.3 million of charge-offs related to the sale of under-performing residential and consumer loans. The year ended December 31, 2020 included $14.6 million of charge-offs related to the sale of higher risk commercial loans and $3.3 million of charge-offs related to the sale of under-performing residential and consumer loans. Non-performing loans held-for-investment totaled $36.4 million at December 31, 2020, as compared to $29.9 million at September 30, 2020, and $17.8 million at December 31, 2019.

Non-interest Income

For the quarter and year ended December 31, 2020, other income increased to $40.6 million and $73.9 million, respectively, as compared to $11.2 million and $42.2 million, respectively, for the corresponding prior year periods. Other income for the quarter and year ended December 31, 2020 included $29.6 million and $26.0 million, respectively, of net gains related to non-core operations.

The primary contributor to other income for the quarter and year ended December 31, 2020 was gains earned on equity investments. The Company implemented several programs in 2020 to invest excess liquidity in high quality interest or dividend bearing securities. In August 2020, the Company began purchasing select financial services institutions’ common stocks paying attractive dividends. The positive performance of the portfolio drove the decision to liquidate all of the positions in December 2020 and January 2021, which resulted in an additional $8.1 million of net gains recorded in January 2021.

Excluding the impact of non-core operations, the change in other income for the quarter ended December 31, 2020 over the prior year was due to Two River and Country Bank acquisitions which added $439,000. The remaining decrease in other income for the quarter ended December 31, 2020, compared to the corresponding prior year period, was due to decreases in commercial loan swap income of $1.9 million and fees and service charges of $1.2 million, partly offset by an increase in net gain on sale of loans of $1.0 million, and net gain on real estate operations of $695,000.

Excluding the impact of non-core operations, the change in other income for the year ended December 31, 2020 over the prior year was due to Two River and Country Bank acquisitions which added $2.8 million. The remaining increase in other income was due to increases in commercial loan swap income of $2.8 million, net gain on sales of loans of $2.5 million, net gain on real estate operations of $981,000, and bankcard services of $577,000, partly offset by a decrease in fees and service charges of $4.4 million. The waiver of certain fees during the COVID-19 pandemic may continue to suppress deposit fee income for the remainder of the public health crisis.

Excluding the impact of non-core operations, other income for the quarter ended December 31, 2020, decreased $723,000 as compared to the prior linked quarter. The decrease was primarily related to a decrease in commercial loan swap income of $1.3 million.

Non-interest Expense

Operating expenses increased to $70.9 million and $246.4 million for the quarter and year ended December 31, 2020, respectively, as compared to $47.6 million and $189.1 million, respectively, in the same prior year periods. Operating expenses for the quarter and year ended December 31, 2020 included $17.9 million and $37.8 million, respectively, of net expenses related to non-core operations. Operating expenses for the quarter and year ended December 31, 2019 included $5.3 million and $22.8 million, respectively, of net expenses related to non-core operations. Excluding the impact of non-core operations, the change in operating expenses over the prior year was due to Two River and Country Bank acquisitions, which added $6.3 million and $29.3 million for the quarter and year ended December 31, 2020, respectively. The remaining increase in operating expenses for the quarter ended December 31, 2020 was due to increases in federal deposit insurance expense of $1.4 million, compensation and benefits expense of $1.4 million, professional fees of $1.3 million, and operating expenses attributable to the COVID-19 pandemic of $707,000. The increase in operating expenses for the year ended December 31, 2020 was due to increases in compensation and benefits expense of $7.6 million, operating expenses attributable to the COVID-19 pandemic of $4.5 million, professional fees of $3.6 million, and federal deposit insurance expense of $2.0 million, partly offset by decreases in equipment expense of $1.8 million, occupancy expense of $1.6 million, and check card processing of $680,000.

For the quarter ended December 31, 2020, operating expenses, excluding net expenses related to non-core operations, increased $252,000 as compared to the prior linked quarter. The increase was due to increases in other operating expense of $788,000, federal deposit insurance expense of $648,000, and professional fees of $583,000, partly offset by decreases in compensation and benefits expense of $1.1 million and operating expenses attributable to the COVID-19 pandemic of $1.0 million.

Income Tax Expense

The provision for income taxes was $10.4 million and $17.7 million for the quarter and year ended December 31, 2020, respectively, as compared to $3.2 million and $18.8 million, respectively, for the same prior year periods. The effective tax rate was 24.0% and 21.9% for the quarter and year ended December 31, 2020, respectively, as compared to 11.9% and 17.5%, respectively, for the same prior year periods. The higher effective tax rates for the quarter and year ended December 31, 2020 are due to the adverse impacts of a New Jersey tax code change and a higher allocation of taxable income to New York due to the acquisition of Country Bank. The lower tax rates in the prior year periods were also due to the reduction in income tax expense of $2.2 million from the revaluation of state deferred tax assets as a result of the change in New Jersey tax code. Excluding the impact of the New Jersey tax code change, the effective tax rate for the quarter and year ended December 31, 2019 was 20.2% and 19.6%.

Financial Condition

Total assets increased by $3.20 billion to $11.45 billion at December 31, 2020, from $8.25 billion at December 31, 2019, primarily as a result of the acquisitions of Two River and Country Bank, which added $2.03 billion to total assets. Cash and due from banks increased by $1.15 billion to $1.27 billion at December 31, 2020, from $120.5 million at December 31, 2019, due to increased deposits, the Company’s decision to build liquidity during the economic downturn, the cash received from the issuance of subordinated notes and non-cumulative perpetual preferred stock as described below, and the cash received from loan sales throughout the year. Loans receivable, net of allowance for credit losses, increased by $1.50 billion, to $7.70 billion at December 31, 2020, from $6.21 billion at December 31, 2019, primarily due to acquired loans from Two River and Country Bank of $1.56 billion. As part of the acquisitions of Two River and Country Bank, the Company’s goodwill balance increased to $500.3 million at December 31, 2020, from $374.6 million at December 31, 2019 and core deposit intangibles increased to $23.7 million, from $15.6 million. Other assets increased by $39.4 million to $209.0 million at December 31, 2020, from $169.5 million at December 31, 2019, primarily due to an increase in swap positions.

Deposits increased by $3.10 billion, to $9.43 billion at December 31, 2020, from $6.33 billion at December 31, 2019, primarily due to acquired deposits from Two River and Country Bank of $1.59 billion and organic deposit growth of $1.51 billion. The loan-to-deposit ratio at December 31, 2020 was 82.3%, as compared to 98.2% at December 31, 2019. The Company utilized the excess liquidity to prepay all FHLB advances in the fourth quarter of 2020, bringing the balance to $0 at December 31, 2020 from $519.3 million at December 31, 2019. The increase in other borrowings of $138.7 million to $235.5 million at December 31, 2020, from $96.8 at December 31, 2019, primarily resulted from the May 2020 issuance of $125.0 million in subordinated notes at an initial rate of 5.25% and a stated maturity of May 15, 2030. Other liabilities increased by $92.7 million to $155.3 million at December 31, 2020, from $62.6 million at December 31, 2019, primarily due to an increase in swap positions.

Stockholders’ equity increased to $1.48 billion at December 31, 2020, as compared to $1.15 billion at December 31, 2019. The acquisitions of Two River and Country Bank added $261.4 million to stockholders’ equity. During the three months ended June 30, 2020, the Company raised $55.7 million from the issuance of 7.0% fixed-to-floating rate non-cumulative perpetual preferred stock, with a par value of $0.01 and a liquidation price of $1,000 per share. Under the Company’s stock repurchase program, there were 2,019,145 shares available for repurchase at December 31, 2020. The Company had suspended its repurchase activity on February 28, 2020, and has determined to recommence repurchases under its existing stock repurchase plan beginning February 1, 2021. For the year ended December 31, 2020, the Company repurchased 648,851 shares under the repurchase program at a weighted average cost of $22.83.

Asset Quality

The Company’s non-performing loans held-for-investment totaled $36.4 million at December 31, 2020, as compared to $29.9 million at September 30, 2020, and $17.8 million at December 31, 2019. Non-performing loans held-for-investment do not include $48.5 million of purchased with credit deterioration (“PCD”) loans acquired in the Two River, Country Bank, Capital Bank, Sun Bancorp, Inc. (“Sun”), Ocean Shore Holding Co. (“Ocean Shore”), Cape Bancorp, Inc. (“Cape”), and Colonial American Bank (“Colonial American”) acquisitions.

COVID-19 related loans under full forbearance have been substantially resolved and returned to payment terms. The Company’s special mention and substandard loans were $360.2 million as of December 31, 2020, as compared to $317.4 million as of September 30, 2020 and $107.7 million as of December 31, 2019. The increase as compared to the prior year reflects the addition of Two River and Country Bank portfolios, as well as borrowers that have been negatively impacted by the COVID-19 pandemic which primarily occurred during the third quarter as Coronavirus Aid, Relief and Economic Security (“CARES”) Act forbearance periods ended. A significant majority of these borrowers are current on their loan payments. The Company’s non-accrual loans as of December 31, 2020 were 0.47% of total loans, as compared to 0.37% as of September 30, 2020 and 0.29% as of December 31, 2019.

At December 31, 2020, the Company’s allowance for credit losses was 0.78% of total loans, an increase from 0.27% at December 31, 2019. The allowance for credit losses does not reflect the net unamortized credit mark of $28.0 million. The allowance for credit losses plus the unamortized credit mark amounted to $88.7 million, or 1.14% of loans held-for-investment. The allowance for credit losses as a percent of total non-performing loans held-for-investment was 166.81% at December 31, 2020, as compared to 94.41% at December 31, 2019.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to Non-GAAP Reconciliation at the end of this document for details on the earnings impact of these items.

Annual Meeting

The Company also announced today that its Annual Meeting of Stockholders will be virtually held on Wednesday, May 19, 2021 at 9:00 a.m. Eastern Time. The record date for stockholders to vote at the Annual Meeting is April 2, 2021. Additional information regarding virtual access to the meeting will be distributed prior to the meeting.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, January 29, 2021 at 11:00 a.m. Eastern Time. The direct dial number for the call is (888) 338-7143. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10150841 from one hour after the end of the call until April 29, 2021. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is an $11.45 billion regional bank operating throughout New Jersey, metropolitan Philadelphia and metropolitan New York City. OceanFirst Bank delivers commercial and residential financing solutions, wealth management and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey.

OceanFirst Financial Corp.’s press releases are available by visiting us at www.oceanfirst.com.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.


OceanFirst Financial Corp
.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)

December 31, 2020

September 30, 2020

December 31, 2019

(Unaudited)

(Unaudited)

Assets

Cash and due from banks

$

1,272,134

$

980,870

$

120,544

Debt securities available-for-sale, at estimated fair value

183,302

169,634

150,960

Debt securities held-to-maturity, net of allowance for credit losses of $1,715 at December 31, 2020 and $2,393 at September 30, 2020 (estimated fair value of $968,466 at December 31, 2020, $902,418 at September 30, 2020, and $777,290 at December 31, 2019)

937,253

871,688

768,873

Equity investments, at estimated fair value

107,079

63,846

10,136

Restricted equity investments, at cost

51,705

67,505

62,356

Loans receivable, net of allowance for credit losses of $60,735 at December 31, 2020, $56,350 at September 30, 2020, and $16,852 at December 31, 2019

7,704,857

7,943,390

6,207,680

Loans held-for-sale

45,524

388,763

Interest and dividends receivable

35,269

40,671

21,674

Other real estate owned

106

106

264

Premises and equipment, net

107,094

103,249

102,691

Bank owned life insurance

265,253

264,167

237,411

Assets held for sale

5,782

6,717

3,785

Goodwill

500,319

500,849

374,632

Core deposit intangible

23,668

25,194

15,607

Other assets

208,968

224,648

169,532

Total assets

$

11,448,313

$

11,651,297

$

8,246,145

Liabilities and Stockholders’ Equity

Deposits

$

9,427,616

$

9,283,288

$

6,328,777

Federal Home Loan Bank advances

343,452

519,260

Securities sold under agreements to repurchase with retail customers

128,454

142,823

71,739

Other borrowings

235,471

246,941

96,801

Advances by borrowers for taxes and insurance

17,296

20,104

13,884

Other liabilities

155,346

152,975

62,565

Total liabilities

9,964,183

10,189,583

7,093,026

Total stockholders’ equity

1,484,130

1,461,714

1,153,119

Total liabilities and stockholders’ equity

$

11,448,313

$

11,651,297

$

8,246,145


OceanFirst Financial Corp
.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

For the Three Months Ended,

For the Year Ended

December 31,

September 30,

December 31,

December 31,

2020

2020

2019

2020

2019

|--------------------- (Unaudited) ---------------------|

(Unaudited)

Interest income:

Loans

$

84,997

$

85,933

$

70,298

$

349,221

$

279,931

Mortgage-backed securities

3,388

3,212

3,552

14,037

15,300

Debt securities, equity investments and other

4,177

3,817

3,225

16,350

13,563

Total interest income

92,562

92,962

77,075

379,608

308,794

Interest expense:

Deposits

10,679

11,370

10,214

48,290

38,432

Borrowed funds

4,032

4,804

3,507

18,367

14,391

Total interest expense

14,711

16,174

13,721

66,657

52,823

Net interest income

77,851

76,788

63,354

312,951

255,971

Credit loss expense

4,072

35,714

355

59,404

1,636

Net interest income after credit loss expense

73,779

41,074

62,999

253,547

254,335

Other income:

Bankcard services revenue

3,098

3,097

2,641

11,417

10,263

Trust and asset management revenue

492

490

478

2,052

2,102

Fees and services charges

3,950

3,732

4,710

15,808

18,500

Net gain on sales of loans

6,348

1,001

1

8,278

16

Net gain (loss) on equity investments

24,487

(3,576

)

(63

)

21,214

267

Net gain (loss) from other real estate operations

23

214

(95

)

35

(330

)

Income from bank owned life insurance

1,798

1,530

1,375

6,424

5,420

Commercial loan swap income

116

1,425

2,062

8,080

5,285

Other

308

266

122

618

642

Total other income

40,620

8,179

11,231

73,926

42,165

Operating expenses:

Compensation and employee benefits

27,323

29,012

22,518

114,155

89,912

Occupancy

4,968

5,270

4,071

20,782

17,159

Equipment

1,938

1,906

1,775

7,769

7,719

Marketing

632

963

840

3,117

3,469

Federal deposit insurance and regulatory assessments

1,859

1,212

296

4,871

2,227

Data processing

4,624

4,517

4,078

17,467

14,814

Check card processing

1,507

1,385

1,557

5,458

5,956

Professional fees

3,908

3,354

3,641

12,247

9,338

Other operating expense

4,768

3,644

3,815

16,552

14,968

Amortization of core deposit intangible

1,526

1,538

998

6,186

4,027

FHLB advance prepayment fees

13,333

14,257

Branch consolidation expense

3,336

830

268

7,623

9,050

Merger related expenses

1,194

3,156

3,742

15,947

10,503

Total operating expenses

70,916

56,787

47,599

246,431

189,142

Income (loss) before provision (benefit) for income taxes

43,483

(7,534

)

26,631

81,042

107,358

Provision (benefit) for income taxes

10,419

(2,608

)

3,181

17,733

18,784

Net income (loss)

33,064

(4,926

)

23,450

63,309

88,574

Dividends on preferred shares

1,004

1,093

2,097

Net income (loss) available to common stockholders

$

32,060

$

(6,019

)

$

23,450

$

61,212

$

88,574

Basic earnings (loss) per share

$

0.53

$

(0.10

)

$

0.47

$

1.02

$

1.77

Diluted earnings (loss) per share

$

0.54

$

(0.10

)

$

0.47

$

1.02

$

1.75

Average basic shares outstanding

59,961

59,935

49,890

59,919

50,166

Average diluted shares outstanding

60,057

59,935

50,450

60,072

50,746


OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA
(dollars in thousands)

LOANS RECEIVABLE

At

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Commercial:

Commercial and industrial

$

470,656

$

599,188

$

910,762

$

502,760

$

396,434

Commercial real estate - owner-occupied

1,145,065

1,176,529

1,199,742

1,220,983

792,653

Commercial real estate - investor

3,491,464

3,453,276

3,449,160

3,331,662

2,296,410

Total commercial

5,107,185

5,228,993

5,559,664

5,055,405

3,485,497

Consumer:

Residential real estate

2,309,459

2,407,178

2,426,277

2,458,641

2,321,157

Home equity loans and lines

285,016

301,712

320,627

335,624

318,576

Other consumer

54,446

63,095

71,721

82,920

89,422

Total consumer

2,648,921

2,771,985

2,818,625

2,877,185

2,729,155

Total loans

7,756,106

8,000,978

8,378,289

7,932,590

6,214,652

Deferred origination costs (fees), net

9,486

(1,238

)

(4,300

)

10,586

9,880

Allowance for credit losses

(60,735

)

(56,350

)

(38,509

)

(29,635

)

(16,852

)

Loans receivable, net

$

7,704,857

$

7,943,390

$

8,335,480

$

7,913,541

$

6,207,680

Mortgage loans serviced for others

$

95,789

$

88,210

$

101,840

$

51,399

$

50,042

At December 31, 2020 Average Yield

Loan pipeline (1):

Commercial

3.78

%

$

210,024

$

154,700

$

169,093

$

293,820

$

219,269

Residential real estate

3.16

151,152

212,107

181,800

223,032

105,396

Home equity loans and lines

4.14

6,630

10,301

8,282

8,429

3,049

Total

3.53

%

$

367,806

$

377,108

$

359,175

$

525,281

$

327,714


For the Three Months Ended

December 31, 2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Average Yield

Loan originations:

Commercial

3.74

%

$

173,715

$

187,747

$

216,979

(2)

$

266,882

$

264,938

Residential real estate

3.23

222,780

219,325

242,137

148,675

226,492

Home equity loans and lines

4.18

13,435

10,966

12,128

10,666

12,961

Total

3.48

%

$

409,930

$

418,038

$

471,244

$

426,223

$

504,391

Loans sold

$

56,126

(3)

$

56,722

$

104,600

(3)

$

7,500

(3)

$

110

(1) Loan pipeline includes loans approved but not funded.
(2) Excludes loans originated through the PPP of $504 million.
(3) Excludes the sale of PPP loans of $298.1 million, higher risk commercial loans of $64.8 million, net of charge-offs, and under-performing residential and home equity loans and lines of $10.5 million, net of charge-offs, for the three months ended December 31, 2020, the sale of under-performing commercial loans of $4.9 million for the three months ended June 30, 2020, and under-performing residential loans of $4.0 million and commercial loans of $5.1 million for the three months ended March 31, 2020.

DEPOSITS

At

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Type of Account

Non-interest-bearing

$

2,133,195

$

2,240,799

$

2,161,766

$

1,783,216

$

1,377,396

Interest-bearing checking

3,646,866

3,317,296

3,022,887

2,647,487

2,539,428

Money market deposit

783,521

691,872

680,199

620,145

578,147

Savings

1,491,251

1,471,554

1,456,931

1,420,628

898,174

Time deposits

1,372,783

1,561,767

1,645,971

1,420,591

935,632

$

9,427,616

$

9,283,288

$

8,967,754

$

7,892,067

$

6,328,777


OceanFirst Financial Corp.

ASSET QUALITY
(dollars in thousands)

ASSET QUALITY

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Non-performing loans held-for-investment:

Commercial and industrial

$

1,551

$

586

$

1,586

$

207

$

207

Commercial real estate - owner-occupied

13,054

11,365

4,582

4,219

4,811

Commercial real estate - investor

10,660

2,978

5,274

3,384

2,917

Residential real estate

8,642

11,518

6,568

5,920

7,181

Home equity loans and lines

2,503

3,448

3,034

2,533

2,733

Total non-performing loans held-for-investment

36,410

29,895

21,044

16,263

17,849

Non-performing loans held-for-sale

67,489

Other real estate owned

106

106

248

484

264

Total non-performing assets

$

36,516

$

97,490

$

21,292

$

16,747

$

18,113

PCD loans (1)

$

48,488

$

56,422

$

61,694

$

59,783

$

13,265

Delinquent loans 30 to 89 days

$

34,683

$

13,753

$

13,640

$

48,905

$

14,798

Troubled debt restructurings:

Non-performing (included in total non-performing loans above)

$

5,158

$

9,866

$

6,189

$

6,249

$

6,566

Performing

12,009

12,777

16,365

16,102

18,042

Total troubled debt restructurings

$

17,167

$

22,643

$

22,554

$

22,351

$

24,608

Allowance for credit losses

$

60,735

$

56,350

$

38,509

$

29,635

$

16,852

Allowance for credit losses as a percent of total loans receivable (2)

0.78

%

0.70

%

0.46

%

0.37

%

0.27

%

Allowance for credit losses as a percent of total non-performing
loans held-for-investment

166.81

188.49

182.99

182.22

94.41

Non-performing loans as a percent of total loans receivable

0.47

0.37

0.25

0.21

0.29

Non-performing assets as a percent of total assets

0.32

0.84

0.19

0.16

0.22

(1) PCD loans are not included in non-performing loans held-for-investment, troubled debt restructurings or delinquent loans totals.
(2) The loans acquired from Two River, Country Bank, Capital Bank, Sun, Ocean Shore, Cape, and Colonial American were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for credit losses, was $27,951, $31,617, $35,439, $38,272, and $30,260 at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.

NET CHARGE-OFFS

For the Three Months Ended

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Net (charge-offs) recoveries:

Loan charge-offs

$

(3,220

)

$

(15,411

)

$

(169

)

$

(1,384

)

$

(445

)

Recoveries on loans

278

416

401

230

306

Net loan (charge-offs) recoveries

$

(2,942

)

(1)

$

(14,995

)

(2)

$

232

$

(1,154

)

(3)

$

(139

)

Net loan charge-offs to average total loans (annualized)

0.15

%

0.71

%

NM*

0.06

%

0.01

%

Net loan (charge-offs) recoveries details:

Commercial

$

(775

)

$

(14,801

)

$

30

$

59

$

163

Residential mortgage and construction

(1,731

)

314

212

(1,112

)

(61

)

Home equity loans and lines

(451

)

(490

)

(3

)

(36

)

(240

)

Other consumer

15

(18

)

(7

)

(65

)

(1

)

Net loan (charge-offs) recoveries

$

(2,942

)

(1)

$

(14,995

)

(2)

$

232

$

(1,154

)

(3)

$

(139

)

(1) Included in net loan charge-offs for the three months ended December 31, 2020 is $2.3 million relating to under-performing residential and consumer loans sold.
(2) Included in net loan charge-offs for the three months ended September 30, 2020 is $14.2 million relating to loans transferred to held-for-sale.
(3) Included in net loan charge-offs for the three months ended March 31, 2020 is $949 relating to under-performing residential loans sold.
* Not Meaningful


OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

For the Three Months Ended

December 31, 2020

September 30, 2020

December 31, 2019

(dollars in thousands)

Average
Balance

Interest

Average
Yield/
Cost

Average
Balance

Interest

Average
Yield/
Cost

Average
Balance

Interest

Average
Yield/
Cost

Assets:

Interest-earning assets:

Interest-earning deposits and short-term investments

$

1,223,472

$

341

0.11

%

$

805,863

$

236

0.12

%

$

43,495

$

196

1.79

%

Securities (1)

1,209,543

7,224

2.38

1,112,174

6,793

2.43

1,008,461

6,581

2.59

Loans receivable, net (2)

Commercial

5,271,633

58,776

4.44

5,554,897

58,639

4.20

3,442,771

42,416

4.89

Residential real estate

2,420,494

21,530

3.56

2,462,513

23,091

3.75

2,309,741

22,469

3.89

Home equity loans and lines

293,746

3,930

5.32

311,802

3,330

4.25

323,878

4,243

5.20

Other consumer

58,174

761

5.20

67,497

873

5.15

94,350

1,170

4.92

Allowance for credit losses, net of deferred loan fees

(51,682

)

(45,912

)

(7,932

)

Loans receivable, net

7,992,365

84,997

4.23

8,350,797

85,933

4.09

6,162,808

70,298

4.53

Total interest-earning assets

10,425,380

92,562

3.53

10,268,834

92,962

3.60

7,214,764

77,075

4.24

Non-interest-earning assets

1,322,112

1,353,135

977,413

Total assets

$

11,747,492

$

11,621,969

$

8,192,177

Liabilities and Stockholders’ Equity:

Interest-bearing liabilities:

Interest-bearing checking

$

3,601,814

4,836

0.53

%

$

3,289,319

4,627

0.56

%

$

2,562,059

4,477

0.69

%

Money market

766,866

586

0.30

675,841

571

0.34

592,116

1,243

0.83

Savings

1,489,853

240

0.06

1,460,232

296

0.08

899,051

308

0.14

Time deposits

1,437,770

5,017

1.39

1,606,632

5,876

1.45

931,228

4,186

1.78

Total

7,296,303

10,679

0.58

7,032,024

11,370

0.64

4,984,454

10,214

0.81

FHLB advances

204,880

779

1.51

343,412

1,470

1.70

412,073

2,075

2.00

Securities sold under agreements to repurchase

154

0.43

144,720

174

0.48

68,257

85

0.49

Other borrowings

242,030

3,099

5.09

246,903

3,160

5.09

96,712

1,347

5.53

Total interest-bearing liabilities

7,886,598

14,711

0.74

7,767,059

16,174

0.83

5,561,496

13,721

0.98

Non-interest-bearing deposits

2,209,532

2,209,241

1,393,002

Non-interest-bearing liabilities

176,274

162,987

92,014

Total liabilities

10,272,404

10,139,287

7,046,512

Stockholders’ equity

1,475,088

1,482,682

1,145,665

Total liabilities and equity

$

11,747,492

$

11,621,969

$

8,192,177

Net interest income

$

77,851

$

76,788

$

63,354

Net interest rate spread (3)

2.79

%

2.77

%

3.26

%

Net interest margin (4)

2.97

%

2.97

%

3.48

%

Total cost of deposits (including non-interest-bearing deposits)

0.45

%

0.49

%

0.64

%


For the Year Ended

December 31, 2020

December 31, 2019

(dollars in thousands)

Average
Balance

Interest

Average
Yield/
Cost

Average
Balance

Interest

Average
Yield/
Cost

Assets:

Interest-earning assets:

Interest-earning deposits and short-term investments

$

613,971

$

1,034

0.17

%

$

57,742

$

1,299

2.25

%

Securities (1)

1,159,764

29,353

2.53

1,048,779

27,564

2.63

Loans receivable, net (2)

Commercial

5,299,813

236,749

4.47

3,329,396

168,507

5.06

Residential real estate

2,465,740

93,120

3.78

2,204,931

87,729

3.98

Home equity loans and lines

318,090

15,183

4.77

339,896

18,284

5.38

Other consumer

72,331

4,169

5.76

107,672

5,411

5.03

Allowance for credit losses, net of deferred loan fees

(33,343

)

(8,880

)

Loans receivable, net

8,122,631

349,221

4.30

5,973,015

279,931

4.69

Total interest-earning assets

9,896,366

379,608

3.84

7,079,536

308,794

4.36

Non-interest-earning assets

1,310,474

964,920

Total assets

$

11,206,840

$

8,044,456

Liabilities and Stockholders’ Equity:

Interest-bearing liabilities:

Interest-bearing checking

$

3,168,889

19,395

0.61

%

$

2,517,068

16,820

0.67

%

Money market

677,554

2,902

0.43

605,607

4,919

0.81

Savings

1,449,982

2,505

0.17

906,086

1,195

0.13

Time deposits

1,531,857

23,488

1.53

929,488

15,498

1.67

Total

6,828,282

48,290

0.71

4,958,249

38,432

0.78

FHLB advances

413,290

7,018

1.70

387,925

8,441

2.18

Securities sold under agreements to repurchase

125,500

562

0.45

64,525

276

0.43

Other borrowings

207,386

10,787

5.20

98,095

5,674

5.78

Total interest-bearing liabilities

7,574,458

66,657

0.88

5,508,794

52,823

0.96

Non-interest-bearing deposits

2,031,100

1,325,836

Non-interest-bearing liabilities

144,571

80,028

Total liabilities

9,750,129

6,914,658

Stockholders’ equity

1,456,711

1,129,798

Total liabilities and equity

$

11,206,840

$

8,044,456

Net interest income

$

312,951

$

255,971

Net interest rate spread (3)

2.96

%

3.40

%

Net interest margin (4)

3.16

%

3.62

%

Total cost of deposits (including non-interest-bearing deposits)

0.55

%

0.61

%

(1) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost, net of allowance for credit losses.
(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated allowance for credit losses, and includes loans held for sale and non-performing loans.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.


OceanFirst Financial Corp.

SELECTED QUARTERLY FINANCIAL DATA
(dollars in thousands, except per share amounts)

December 31, 2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Selected Financial Condition Data:

Total assets

$

11,448,313

$

11,651,297

$

11,345,365

$

10,489,074

$

8,246,145

Debt securities available-for-sale, at estimated fair value

183,302

169,634

153,239

153,738

150,960

Debt securities held-to-maturity, net of allowance for credit losses

937,253

871,688

867,959

914,255

768,873

Equity investments, at estimated fair value

107,079

63,846

13,830

14,409

10,136

Restricted equity investments, at cost

51,705

67,505

68,091

81,005

62,356

Loans receivable, net of allowance for credit losses

7,704,857

7,943,390

8,335,480

7,913,541

6,207,680

Deposits

9,427,616

9,283,288

8,967,754

7,892,067

6,328,777

Federal Home Loan Bank advances

343,452

343,392

825,824

519,260

Securities sold under agreements to repurchase and other borrowings

363,925

389,764

399,661

210,388

168,540

Stockholders’ equity

1,484,130

1,461,714

1,476,434

1,409,834

1,153,119


For the Three Months Ended

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Selected Operating Data:

Interest income

$

92,562

$

92,962

$

95,877

$

98,207

$

77,075

Interest expense

14,711

16,174

17,210

18,562

13,721

Net interest income

77,851

76,788

78,667

79,645

63,354

Credit loss expense

4,072

35,714

9,649

9,969

355

Net interest income after credit loss expense

73,779

41,074

69,018

69,676

62,999

Other income (excluding net gain (loss) on equity investments and gain on sale of PPP loans)

11,032

11,755

11,430

13,697

11,231

Net gain (loss) on equity investments

24,487

(3,576

)

Gain on sale of PPP loans

5,101

Operating expenses (excluding FHLB advance prepayment fees, branch consolidation and merger related expenses)

53,053

52,801

51,075

51,675

43,589

FHLB advance prepayment fees

13,333

924

Branch consolidation expense

3,336

830

863

2,594

268

Merger related expenses

1,194

3,156

3,070

8,527

3,742

Income (loss) before provision (benefit) for income taxes

43,483

(7,534

)

24,516

20,577

26,631

Provision (benefit) for income taxes

10,419

(2,608

)

5,878

4,044

3,181

Net income (loss)

$

33,064

$

(4,926

)

$

18,638

$

16,533

$

23,450

Net income (loss) available to common stockholders

$

32,060

$

(6,019

)

$

18,638

$

16,533

$

23,450

Diluted earnings (loss) per share

$

0.54

$

(0.10

)

$

0.31

$

0.27

$

0.47

Net accretion/amortization of purchase accounting adjustments included in net interest income

$

6,186

$

4,364

$

5,536

$

5,533

$

3,501


At or For the Three Months Ended

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Selected Financial Ratios and Other Data(1):

Performance Ratios (Annualized):

Return on average assets (2)

1.12

%

(0.17

)%

0.67

%

0.64

%

1.14

%

Return on average tangible assets (2) (3)

1.17

(0.18

)

0.71

0.68

1.19

Return on average stockholders' equity (2)

8.92

(1.32

)

5.16

4.70

8.12

Return on average tangible stockholders' equity (2) (3)

13.85

(2.05

)

8.10

7.50

12.33

Stockholders' equity to total assets

12.96

12.55

13.01

13.44

13.98

Tangible stockholders' equity to tangible assets (3)

8.79

8.41

8.77

8.85

9.71

Tangible common equity to tangible assets (3)

8.28

7.91

8.25

8.85

9.71

Net interest rate spread

2.79

2.77

3.02

3.29

3.26

Net interest margin

2.97

2.97

3.24

3.52

3.48

Operating expenses to average assets (2)

2.40

1.94

2.02

2.44

2.31

Efficiency ratio (2) (4)

59.86

66.83

62.08

67.28

63.82

Loans to deposits

82.27

86.19

93.43

100.51

98.20


At or For the Year Ended December 31,

2020

2019

Performance Ratios:

Return on average assets (2)

0.56

%

1.10

%

Return on average tangible assets (2) (3)

0.59

1.16

Return on average stockholders' equity (2)

4.35

7.84

Return on average tangible stockholders' equity (2) (3)

6.81

11.96

Net interest rate spread

2.96

3.40

Net interest margin

3.16

3.62

Operating expenses to average assets (2)

2.20

2.35

Efficiency ratio (2) (4)

63.70

63.44


At or For the Three Months Ended

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

Wealth Management:

Assets under administration

$

245,175

$

232,292

$

224,042

$

173,856

$

195,415

Nest Egg

93,237

80,472

57,383

43,528

34,865

Per Share Data:

Cash dividends per common share

$

0.17

$

0.17

$

0.17

$

0.17

$

0.17

Stockholders’ equity per common share at end of period

24.57

24.21

24.47

23.38

22.88

Tangible common equity per common share at end of period (3)

14.98

14.58

14.79

14.62

15.13

Common shares outstanding at end of period

60,392,043

60,378,120

60,343,077

60,311,717

50,405,048

Preferred shares outstanding at end of period

57,370

57,370

57,370

Number of full-service customer facilities:

62

62

62

75

56

Quarterly Average Balances

Total securities

$

1,209,543

$

1,112,174

$

1,130,779

$

1,186,535

$

1,008,461

Loans receivable, net

7,992,365

8,350,797

8,295,622

7,850,662

6,162,808

Total interest-earning assets

10,425,380

10,268,834

9,780,417

9,100,923

7,214,764

Total assets

11,747,492

11,621,969

11,114,586

10,332,809

8,192,177

Interest-bearing transaction deposits

5,858,533

5,425,392

5,065,069

4,825,193

4,053,226

Time deposits

1,437,770

1,606,632

1,623,890

1,459,348

931,228

Total borrowed funds

590,295

735,035

828,928

832,285

577,042

Total interest-bearing liabilities

7,886,598

7,767,059

7,517,887

7,116,826

5,561,496

Non-interest bearing deposits

2,209,532

2,209,241

2,018,044

1,687,582

1,393,002

Stockholders’ equity

1,475,088

1,482,682

1,453,658

1,414,924

1,145,665

Total deposits

9,505,835

9,241,265

8,707,003

7,972,123

6,377,456

Quarterly Yields

Total securities

2.38

%

2.43

%

2.64

%

2.68

%

2.59

%

Loans receivable, net

4.23

4.09

4.28

4.61

4.53

Total interest-earning assets

3.53

3.60

3.94

4.34

4.24

Interest-bearing transaction deposits

0.38

0.40

0.47

0.64

0.59

Time deposits

1.39

1.45

1.58

1.71

1.78

Borrowed funds

2.72

2.60

2.38

2.24

2.41

Total interest-bearing liabilities

0.74

0.83

0.92

1.05

0.98

Net interest spread

2.79

2.77

3.02

3.29

3.26

Net interest margin

2.97

2.97

3.24

3.52

3.48

Total deposits

0.45

0.49

0.57

0.70

0.64

(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to “Non-GAAP Reconciliation.”
(3) Tangible stockholders’ equity and tangible assets exclude intangible assets relating to goodwill and core deposit intangible. Tangible common equity excludes goodwill, core deposit intangible and preferred equity.
(4) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.

OceanFirst Financial Corp.
OTHER ITEMS
(dollars in thousands, except per share amounts)

NON-GAAP RECONCILIATION

For the Three Months Ended

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

Core Earnings:

Net income (loss) available to common stockholders (GAAP)

$

32,060

$

(6,019

)

$

18,638

$

16,533

$

23,450

Add (less) non-recurring and non-core items:

Merger related expenses

1,194

3,156

3,070

8,527

3,742

Branch consolidation expenses

3,336

830

863

2,594

268

Net (gain) loss on equity investments

(24,487

)

3,576

FHLB advance prepayment fees

13,333

924

Gain on sale of PPP loans

(5,101

)

Two River and Country Bank opening credit loss expense under the CECL model

2,447

Non-recurring professional fees

1,274

Income tax benefit related to change in New Jersey tax code

(2,205

)

Income tax (benefit) expense on items

2,832

(1,809

)

(1,190

)

(3,121

)

(793

)

Core earnings (loss) (Non-GAAP)

$

23,167

$

(266

)

$

22,305

$

26,980

$

25,736

Core diluted earnings (loss) per share

$

0.39

$

$

0.37

$

0.45

$

0.51

Core Ratios (annualized):

Return on average assets

0.78

%

(0.01

)%

0.81

%

1.05

%

1.25

%

Return on average tangible assets

0.82

(0.01

)

0.85

1.11

1.31

Return on average tangible stockholders’ equity

9.71

(0.11

)

9.69

12.25

13.53

Efficiency ratio

59.69

59.63

56.69

55.36

56.73

Certain prior quarter amounts in the tables above have been restated for consistency with the current period presentation.


For the Years Ended December 31,

2020

2019

Core Earnings:

Net income available to common stockholders (GAAP)

$

61,212

$

88,574

Add (less) non-recurring and non-core items:

Merger related expenses

15,947

10,503

Branch consolidation expense

7,623

9,050

Net gain on equity investments

(20,911

)

FHLB advance prepayment fees

14,257

Gain on sale of PPP loans

(5,101

)

Two River and Country Bank opening credit loss expense under the CECL model

2,447

Non-recurring professional fees

2,024

Compensation expense due to the retirement of an executive officer

1,256

Income tax benefit related to change in New Jersey tax code

(2,205

)

Income tax benefit on items

(3,288

)

(4,362

)

Core earnings (Non-GAAP)

$

72,186

$

104,840

Core diluted earnings per share

$

1.20

$