Financial Performance - Net income available to common stockholders for Q1 2023 was $26.9 million, or $0.46 per diluted share, up from $24.8 million, or $0.42 per diluted share, in Q1 2022[17]. - Net income available to common stockholders was $26.9 million, or $0.46 per diluted share, compared to $24.8 million, or $0.42 per diluted share in the prior year[38]. - The effective tax rate was 23.7%, slightly up from 23.6% in the prior year[45]. Assets and Liabilities - Total assets increased to $13.56 billion as of March 31, 2023, compared to $13.10 billion at December 31, 2022, and $12.16 billion at March 31, 2022[10]. - Total assets increased by $451.3 million to $13.56 billion, driven by higher cash and loans[33]. - Total liabilities increased by $426.4 million to $11.94 billion, with deposits rising by $317.9 million to $9.99 billion[34]. - Stockholders' equity increased to $1.61 billion, representing 11.88% of total assets as of March 31, 2023[18]. - The Company maintained a stockholders' equity to total assets ratio of 11.88% as of March 31, 2023[62]. - Total capital to risk-weighted assets ratio was 13.08% for the Company as of March 31, 2023, exceeding the well-capitalized requirement of 10.50%[61]. Income and Interest - Net interest income for Q1 2023 was $98.8 million, an increase of $14.6 million from the prior year, but a decrease of $7.7 million from the previous quarter[20]. - Interest income rose to $139.0 million from $91.0 million, reflecting an increase in average interest-earning assets and higher yield[39]. - Net interest income increased to $98.8 million from $84.2 million, with a net interest margin of 3.34% compared to 3.18%[41]. - The net interest margin was 3.34% for Q1 2023, compared to 3.18% in Q1 2022 and 3.64% in the previous quarter[20]. Loans and Credit Quality - Total loans increased by $121.8 million to $10.04 billion, primarily due to loan originations[33]. - Non-performing loans decreased to $22.4 million, or 0.22% of total loans receivable, as of March 31, 2023[10]. - Non-performing loans totaled $22.4 million at March 31, 2023, down from $23.3 million at December 31, 2022[64]. - The allowance for loan credit losses was $60.2 million, or 0.60% of total loans, as of March 31, 2023, compared to $56.8 million, or 0.57% at December 31, 2022[64]. - Provision for credit losses was $3.0 million, up from $1.9 million, influenced by slowing loan prepayment experience[42]. Dividends and Shareholder Returns - The Company declared a quarterly cash dividend of $0.20 per share, to be paid on May 19, 2023[19]. - The Company declared and paid cash dividends of $11.8 million on common stock and $1.0 million on preferred stock during the first three months of 2023[58]. Operational Efficiency - The efficiency ratio for Q1 2023 was 60.78%, compared to 44.56% in the previous quarter[10]. - Operating expenses increased to $61.3 million from $57.5 million, partly due to the acquisition of Trident[44]. Risk Management - The Company faces various risks including changes in interest rates, inflation, and economic conditions that could adversely affect operations and financial results[72]. - Interest rate sensitivity is monitored through an IRR model, measuring changes in economic value of equity (EVE) and net interest income under various interest rate scenarios[78]. - The change in interest rate sensitivity was influenced by an increase in cash on hand, floating rate loan growth, and longer-term fixed rate funding[80]. - The Company utilizes strategies such as managing loan origination and retention, emphasizing core deposits, and using interest rate swaps to manage interest rate risk[77]. - The Company’s Asset Liability Committee (ALCO) regularly reviews asset liability policies and reports on the IRR position to the Board[76]. Regulatory and Accounting Changes - The Company adopted ASU 2022-02, which enhances disclosure requirements for loan refinancings and restructurings, effective for fiscal years beginning after December 15, 2022[68]. - The Company does not expect ASU 2022-03, effective after December 15, 2023, to have a material impact on consolidated financial statements[69]. - The Company is currently evaluating the impact of ASU 2023-02 on consolidated financial statements, which allows for tax equity investments to be accounted for using the proportional amortization method[70]. Commitments and Obligations - Outstanding commitments to originate loans totaled $318.4 million, with undrawn lines of credit amounting to $1.73 billion as of March 31, 2023[54]. - The Company had various contractual obligations, including debt obligations of $1.6 billion and finance lease obligations of $1.9 million as of March 31, 2023[56].
OCEANFIRST FINL(OCFCP) - 2023 Q1 - Quarterly Report