GAAP diluted earnings per share: $0.42
Net interest income: $82 million, roughly flat compared to the previous quarter
Operating Expenses: $64 million, an increase of $5 million, including $1.7 million of non-recurring expenses
Non-performing loans: 28 basis points of total receivables
Common stock Tier I capital ratio: increased to 11.3%
Tangible book value per share: $19.28, an increase of $0.35
Loan originations: $431 million total (including $161 million in C&I originations)
Deposit balance: Approximately 1% increase compared to the previous quarter
Net collection: $88,000 for the quarter.
Allowance for credit losses: Total $517,000
Net interest margin: 2.67%, almost unchanged from the previous quarter
Quarterly cash dividend: $0.20 per common share.
Release date: October 18, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
OceanFirst Financial Corp (NASDAQ:OCFC) reported third-quarter GAAP diluted earnings per share of $0.42, demonstrating solid financial performance.
The company’s asset quality metrics remain strong, with non-performing loans accounting for 0.28% of total loans and loans 30 to 89 days past due at 0.15%.
OCFC’s tangible book value per share increased 8% year over year to $19.28.
The company successfully repurchased approximately 1.4 million shares at a weighted average cost of $15.38, demonstrating strong capital management.
Reflecting our commitment to returning value to our shareholders, OCFC’s Board of Directors approved a quarterly cash dividend of $0.20 per common share, marking the company’s 111th consecutive quarterly cash dividend.
Minus points
Operating expenses increased $5 million to $64 million, including $1.7 million of acquisition-related non-recurring costs.
Net interest income and profit margin were flat at $82 million and 2.67%, respectively, indicating limited growth in these areas.
The company’s credit loss reserves totaled $517,000, half of which was earmarked for pipeline contracts, suggesting continued credit risk management challenges.
OCFC’s non-interest expenses are expected to increase in the range of $63 million to $65 million in the fourth quarter, reflecting increased operating costs.
The company expects limited share buybacks in the near term due to recent stock price improvements and expectations for organic growth, which could impact shareholder returns.
Q&A highlights
Q: Can you tell us more about your recent acquisitions, specifically Spring Garden Capital? A: Chairman and CEO Christopher Maher said that Spring Garden Capital is a residential renovation and rehabilitation company in urban markets. The company explained that it is a real estate bridge financing group that focuses on The business offers profitable, rate-eligible assets, and its borrower base includes a majority of minority- and women-owned businesses. The business is expected to grow approximately 10% annually.
Q: What is the expected impact on non-interest income from the acquisition of the mortgage business? A: Christopher Maher said this guidance includes the acquisition of Garden State Mortgage and Spring Garden Capital. It was made clear that costs from both were included. The mortgage business is expected to increase net income over the next year, although there will be some fluctuation in expenses due to commission-based sales.
Q: How are you managing deposit repricing in the current interest rate environment? A: President and COO Joseph Lebel has been aggressively lowering rates and wanted to preserve them. He said he retains more than 95% of his expired CDs. We are focused on expanding our customer base to reduce dependence on intermediary business.
Q: What are your expectations for net interest margin and earnings in the coming quarters? A: CFO Patrick Barrett expects net interest margin to expand modestly and net interest income to increase steadily. I said that. The outlook depends on interest rates, loan growth and funding structure trends.
Q: Can you elaborate on your capital deployment strategy, particularly the upcoming subdebt and preferred stock repricing? A: Christopher Maher plans to deploy capital for organic growth and commodity repricing options. He said he had it on hand. Depending on market conditions and cost of capital, we may redeem some or all of our instruments over time.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
