OceanFirst Financial (OCFC) - 2021 Q2 - Quarterly Report

Financial Performance - Net income available to common stockholders for Q2 2021 was $29.6 million, or $0.49 per diluted share, compared to $18.6 million, or $0.31 per diluted share, in Q2 2020[18]. - Operating expenses for Q2 2021 were $51.7 million, reflecting the impact of new commercial banking hires and savings from branch consolidations[20]. - The provision for income taxes was $10.1 million for Q2 2021, with an effective tax rate of 24.8%, up from 24.0% in Q2 2020[41]. - Non-interest income for the six months ended June 30, 2021 increased to $32.6 million from $25.1 million in the same period of 2020, including a net gain on equity investments of $8.9 million[39]. - Cash dividends on common stock declared during the first six months of 2021 were $20.3 million, slightly down from $20.5 million in the same period of 2020[49]. Assets and Liabilities - Total assets as of June 30, 2021, were $11.48 billion, a slight decrease from $11.58 billion in the previous quarter[10]. - Total assets increased by $35.6 million to $11.48 billion at June 30, 2021, from $11.45 billion at December 31, 2020[31]. - Total loans, excluding PPP loans, increased by $77.1 million to $7.74 billion at June 30, 2021, from $7.66 billion at December 31, 2020[31]. - Deposits decreased by $12.3 million to $9.42 billion at June 30, 2021, from $9.43 billion at December 31, 2020[32]. - Total interest-earning assets amounted to $10,252,090 thousand, while total interest-bearing liabilities were $7,279,970 thousand as of June 30, 2021[72]. Loan Performance - The company reported a record loan pipeline of $628.6 million as of June 30, 2021, following the addition of seven commercial bankers in the quarter[20]. - Non-performing loans as a percentage of total loans receivable was 0.41% as of June 30, 2021, compared to 0.43% in the previous quarter[10]. - Non-performing loans decreased to $31.7 million at June 30, 2021, from $36.4 million at December 31, 2020, representing a reduction of approximately 18.8%[62]. - The allowance for loan credit losses was $53.9 million, or 0.69% of total loans, as of June 30, 2021, down from $60.7 million, or 0.78% of total loans, at December 31, 2020[62]. - The Company has implemented short-term modification programs for borrowers impacted by COVID-19, allowing for deferral of principal and interest payments[63]. Capital and Equity - The stockholders' equity to total assets ratio was 13.14% at June 30, 2021, indicating a well-capitalized position[19]. - Stockholders' equity increased to $1.51 billion at June 30, 2021, compared to $1.48 billion at December 31, 2020[33]. - As of June 30, 2021, the Company maintained a Tier 1 capital ratio of 12.69% and a total capital ratio of 15.37%, exceeding the regulatory requirements[53]. - The Company's stockholders' equity to total assets ratio was 13.14% as of June 30, 2021, compared to 12.96% as of December 31, 2020[54]. Interest Income and Margin - Net interest income increased to $74.0 million in Q2 2021 from $73.6 million in the prior quarter, driven by a growth in non-interest bearing deposits by $372.2 million year-to-date[20]. - Net interest income for the three months ended June 30, 2021, was $74,016 thousand, compared to $78,667 thousand for the same period in 2020[28]. - The net interest margin for the three months ended June 30, 2021, was 2.89%, down from 3.24% for the same period in 2020[28]. - Interest income for the six months ended June 30, 2021 decreased to $168.2 million from $194.1 million in the same period of 2020, with average interest-earning assets increasing by $791.3 million[35]. - Net interest income for the six months ended June 30, 2021 decreased to $147.6 million, reflecting a net interest margin reduction to 2.91% from 3.37% in the prior year[37]. Risk Factors - The Company faces significant risks due to the ongoing COVID-19 pandemic, which may adversely affect demand for its products and services, potentially leading to increased loan delinquencies and reduced income[68]. - The Company’s allowance for loan credit losses may increase due to borrowers experiencing financial difficulties, impacting net income[68]. - The Company’s cyber security risks have increased due to a rise in online banking usage and remote work[68]. Share Repurchase - The company repurchased 1.0 million shares at a weighted average cost of $20.94 under its stock repurchase program[33]. - The Company repurchased 500,000 shares of common stock in Q2 2021, totaling 1.0 million shares repurchased for the six months ended June 30, 2021[48].