Financial Performance - Net income available to common stockholders decreased to $16,200 thousand for the quarter ended June 30, 2025, down from $23,369 thousand in the same quarter last year, representing a decline of 30.5%[15] - The diluted earnings per share for the quarter was $0.28, down from $0.40 in the same quarter last year, a decrease of 30%[1] - Net income available to common stockholders decreased to $16.2 million and $36.7 million for the three and six months ended June 30, 2025, compared to $23.4 million and $51.0 million for the same periods in 2024[30] - Interest income for the six months ended June 30, 2025 decreased to $308.5 million from $321.0 million for the corresponding prior year period[32] - Operating expenses increased to $71.5 million for the three months ended June 30, 2025, compared to $58.6 million for the same period in 2024[40] - Operating expenses increased to $135.8 million for the six months ended June 30, 2025, up from $117.3 million, primarily due to a $11.1 million rise in compensation and benefits[42] - The provision for income taxes was $12.6 million for the six months ended June 30, 2025, compared to $17.7 million for the same period in 2024, with an effective tax rate of 23.7%[43] Asset and Loan Growth - Total assets increased to $13,327,847 thousand as of June 30, 2025, compared to $13,321,755 thousand a year earlier[1] - Total loans increased by $59.8 million, reflecting a 2% annualized growth rate, with commercial and industrial loans growing by $131.7 million[17] - The commercial loan pipeline reached a record high of $790.8 million, an increase of 111% from the previous quarter[17] - Total loans increased by $67.0 million to $10.19 billion, with the loan pipeline increasing by $648.1 million to $954.8 million, driven by a $593.3 million increase in commercial loans[24] - Total loans outstanding as of June 30, 2025, were $10.19 billion, with 49.8% in investor-owned commercial real estate[63] Interest Income and Expenses - Net interest income for the quarter was $87,636 thousand, up from $82,263 thousand in the same quarter last year, marking a growth of 6.5%[1] - Net interest income for the three and six months ended June 30, 2025 increased to $87.6 million and $174.3 million, respectively, from $82.3 million and $168.5 million for the same periods in 2024[35] - The weighted average cost of non-maturity deposit accounts was 2.04%, with an average age of approximately 12.1 years[92] Capital and Liquidity - The Company maintained a stockholders' equity to total assets ratio of 12.33% as of June 30, 2025[62] - As of June 30, 2025, total on-balance sheet liquidity and funding capacity was $3.5 billion, representing 199% of estimated adjusted uninsured deposits of $1.73 billion[46][47] - The Company satisfied all regulatory capital requirements as of June 30, 2025, with a total capital to risk-weighted assets ratio of 13.56%[60] - The company's common equity tier one capital ratio declined to 10.99% due to stock repurchases and increased lending commitments[26] Non-Performing Loans and Asset Quality - Non-performing loans as a percentage of total loans receivable remained stable at 0.33%[1] - Non-performing assets increased to $41.19 million as of June 30, 2025, compared to $37.34 million at December 31, 2024, with non-performing loans as a percentage of total loans at 0.33%[70] - The allowance for loan credit losses as a percentage of total loans was 0.78% as of June 30, 2025, up from 0.73% at December 31, 2024[73] - Special mention and substandard loans decreased by $6.6 million to $153.3 million at June 30, 2025, from $159.9 million at December 31, 2024[74] - The Bank's delinquent loans (30-89 days) decreased to $14.74 million from $36.55 million, indicating improved asset quality[73] Dividend and Share Repurchase - The Company declared a quarterly cash dividend of $0.20 per share, consistent with the previous quarter[16] - Cash dividends on common stock declared and paid during the six months ended June 30, 2025, were $23.3 million[55] - The Company repurchased 1,401,945 shares of common stock for a total of $24.3 million during the six months ended June 30, 2025[54] Interest Rate Risk Management - The Company actively manages interest rate risk (IRR) through strategies such as managing loan origination and retention, emphasizing stable deposits, and utilizing interest rate swaps[90] - The Asset Liability Committee (ALCO) regularly reviews the Company's IRR position and trends, reporting to the Board[89] - The Company’s interest rate sensitivity is monitored using an IRR model that measures changes in EVE and net interest income under various interest rate scenarios[91] - The Company reported a decrease in Economic Value of Equity (EVE) by 3.7% under a 300 basis point increase in interest rates as of June 30, 2025, compared to a 6.2% decrease as of December 31, 2024[94] - A shift in deposit mix within non-maturity deposits into lower betas contributed to a decrease in EVE at risk in both rising and falling rate scenarios from December 31, 2024, to June 30, 2025[95] Commercial Real Estate Loans - The Bank's investor-owned commercial real estate loans are highly diversified across various property types, with the largest sector being retail at 23% of total loans[68] - The Bank's total commercial real estate - investor owned loans by geography showed New York at 31%, Pennsylvania and Delaware at 28%, and New Jersey at 26% as of June 30, 2025[69] - The weighted average loan-to-value (LTV) ratio for total investor-owned commercial real estate loans was 55% with a coverage ratio of 1.8x as of June 30, 2025[68] - The weighted average debt service coverage ratio for office loans was 1.9x, with a weighted average LTV of 48% as of June 30, 2025[68] - The Company performed extensive due diligence in underwriting commercial real estate loans, including tenant and market analysis to mitigate risks[66]
OCEANFIRST FINL(OCFCP) - 2025 Q2 - Quarterly Report