Financial Performance - Net income available to common stockholders increased to $27,663 thousand, or $0.47 per diluted share, compared to $26,879 thousand, or $0.46 per diluted share, for the same period last year[14] - Net income available to common stockholders increased to $27.7 million, or $0.47 per diluted share, compared to $26.9 million, or $0.46 per diluted share in the prior year[27] - Other income increased to $12.3 million from $2.1 million, positively impacted by net gains on equity investments and a net gain on the sale of a portion of its trust business[32] - Operating expenses were $58,672 thousand, reflecting disciplined expense control[16] - The dividend payout ratio per common share was 42.55% for the quarter ended March 31, 2024[10] - The Company declared a quarterly cash dividend of $0.20 per share on common stock, payable on May 17, 2024[15] Asset and Liability Management - Total assets decreased to $13,418,978 thousand as of March 31, 2024, from $13,538,253 thousand at December 31, 2023[10] - Total assets decreased by $119.3 million to $13.42 billion, primarily due to decreases in loans and debt securities[23] - Total liabilities decreased by $123.2 million to $11.75 billion, mainly due to lower deposits and a shift in funding mix[24] - Time deposits decreased to $2.32 billion from $2.45 billion, representing a decline of 22.7% of total deposits[24] - The Company maintained a stockholders' equity to total assets ratio of 12.41% as of March 31, 2024, compared to 12.28% as of December 31, 2023[52] Loan Performance - Non-performing loans increased to $35,011 thousand, representing 0.35% of total loans receivable[10] - The total non-performing loans and assets increased to $35,011,000 from $29,548,000 as of December 31, 2023, reflecting a rise of approximately 18.5%[62] - Non-performing loans as a percentage of total loans increased to 0.35% from 0.29%[63] - The allowance for loan credit losses was maintained at 0.66% of total loans, while the allowance as a percentage of total non-performing loans decreased to 191.86% from 227.21%[62] - Special Mention loans rose to $69,283,000 from $40,385,000, primarily due to new downgrades totaling $33.5 million[64] - The level of delinquent loans (30-89 days) decreased to $17,534,000 from $19,202,000, indicating improved asset quality[63] Capital Management - Total stockholders' equity rose to $1,665,837 thousand, up from $1,661,945 thousand in the previous quarter[10] - The capital ratio increased to 11.01%, with book value per share rising to $28.32[16] - The Company's common equity tier one capital ratio increased to 11.01%, up 15 basis points from December 31, 2023, indicating strong capital levels[25] - The Bank's Tier 1 capital to average assets ratio was 9.38% as of March 31, 2024, exceeding the regulatory requirement of 4.00%[51] - The Company performed capital stress tests and maintained adequate capital under all stress scenarios as of March 31, 2024[50] Shareholder Actions - The Company repurchased 957,827 shares totaling $15.1 million during the quarter[16] - For the quarter ended March 31, 2024, the Company repurchased 957,827 shares of common stock totaling $15.1 million[46] - Cash dividends declared and paid during the first three months of 2024 amounted to $11.9 million for common stock and $1.0 million for preferred stock[47] Interest Rate Risk Management - The Asset Liability Committee (ALCO) regularly reviews the Company's interest rate risk position and trends[77] - The Company actively manages interest rate risk through various strategies, including the use of interest rate swaps and managing the maturity profiles of its liabilities[78] - As of March 31, 2024, the Company exhibited modest asset sensitivity with net interest income changes of 3.0% under a 300 basis point rate shock, compared to a decrease of 2.2% as of December 31, 2023[82] - The Economic Value of Equity (EVE) at risk decreased across all rate scenarios from December 31, 2023, to March 31, 2024, primarily due to a shift in deposit mix and changes in loan prepayments[83] - The Company experienced a 4.9% decrease in EVE under a 300 basis point rate shock as of March 31, 2024, compared to a 12.8% decrease at the end of 2023[82] - The model used for EVE and net interest income measurements has inherent shortcomings, including assumptions that may oversimplify actual yield and cost responses to market interest rate changes[84] - The deposit mix shift involved non-maturity deposits with lower betas and longer average lives, impacting the sensitivity results[83] - The Company’s net interest income sensitivity showed a 1.5% increase under a 100 basis point rate shock as of March 31, 2024, compared to a decrease of 0.4% at the end of 2023[82] - The model does not account for the Company's strategic plans or actions in response to interest rate changes, which may affect the accuracy of projections[84] - Prepayment, rate sensitivity, and average life assumptions significantly impact the IRR model results, indicating potential variability in actual outcomes[84] - The Company’s projections on EVE and net interest income are expected to differ significantly from actual results due to the unique post-pandemic interest rate environment[84] - The sensitivity results were partially offset by an increase in overnight borrowings and a reduction in short-term time deposits[82]
OCEANFIRST FINL(OCFCP) - 2024 Q1 - Quarterly Report