OceanFirst Financial (US:OCFC)2026-01-23 17:02Financial Data and Key Metrics Changes - The company reported earnings per share of $0.23 on a fully diluted GAAP basis and $0.41 on a core basis for Q4 2025 [3] - Net interest income grew by $5 million, or 5%, compared to the prior quarter, and increased by 14% year-over-year [4] - The net interest margin declined modestly to 2.87% compared to the previous quarter [4] - Total loans increased by $474 million, representing an 18% annualized growth rate, driven by $1 billion in originations [4] Business Line Data and Key Metrics Changes - The C&I business grew by 42% for the year, contributing significantly to loan growth [9] - Non-interest income decreased by $3.3 million to $9 million during the quarter, primarily due to lower title fees and a reduction in the gain on sale of loans [11] - Total deposits increased by $528 million, with $323 million driven by organic growth across various business lines [10] Market Data and Key Metrics Changes - The company’s asset quality remained strong, with total loans classified as special mention and substandard decreasing by 10% to $112 million, or just 1% of total loans [5] - Non-performing loans to total loans stood at 0.2%, and non-performing assets to total assets were at 0.22% [14] Company Strategy and Development Direction - The company announced a merger agreement with Flushing Financial Corporation, which is expected to enhance organic growth initiatives in New York and improve profitability [7] - The focus remains on continued organic growth efforts, which have shown success in the current quarter [8] Management's Comments on Operating Environment and Future Outlook - Management expects high single-digit growth in net interest income for the year, despite the typical seasonal slowdown in Q1 [22] - The effective tax rate is expected to remain in the 23%-25% range quarterly, absent any changes in tax policy [16] - The company anticipates continued growth in loans and deposits, with net interest income and margin expected to improve throughout the year [16] Other Important Information - The company did not repurchase any shares this quarter, as capital was utilized to support loan growth [7] - The quarterly cash dividend of $0.20 per common share was approved, marking the 116th consecutive quarterly cash dividend [7] Q&A Session Summary Question: Clarity on net interest income guidance - Management indicated that net interest income growth is expected to outpace loan balance growth due to the compounding effect of the balance sheet [21][22] Question: Commentary on loan sales post-merger - Management stated it is too early to provide precise figures on loan sales after the merger, but they expect to improve margins and reduce credit risk over time [23] Question: Expense line clarification - The recurring CRT premium expense is categorized under other expenses, similar to insurance premium expenses [24][25] Question: C&I growth expectations for 2026 - Management expects C&I growth rates to remain in the 7%-9% range, with a strong focus on talent recruitment [35] Question: Deposit growth outlook for Premier Banking - Management confirmed that the target for $2 billion-$3 billion in deposits by the end of 2027 remains intact, despite some seasonal fluctuations [38] Question: Deposit costs outlook - Management expects deposit costs to decrease over the year, with a lag in repricing relative to rate cuts [73]