OceanFirst Financial (OCFC) Q4 2023 earnings summary

Executive summary

• Q4 2023 net income available to common stockholders was $26.7M, or $0.46 diluted EPS, versus $19.7M, or $0.33, in Q3; core diluted EPS was $0.45.

• FY 2023 net income was $100.0M, or $1.70 diluted EPS; core earnings were $104.7M, or $1.78 per share.

Financial highlights

• Q4 core earnings were $26.3M, or $0.45 diluted EPS; core PTPP was $37.9M and core PTPP diluted EPS was $0.65.

• Net interest income was $87.8M, versus $91.0M in Q3 and $106.5M a year earlier; reported NIM was 2.82%, versus 2.91% in Q3 and 3.64% a year earlier.

• Q4 operating expenses were $60.2M, down 7% QoQ; core expenses were $58.5M, down $6.0M, or 9%, QoQ, excluding a $1.7M FDIC special assessment.

• Q4 provision for credit losses was $3.2M, versus $3.6M a year earlier and $10.3M in Q3; FY provision was $17.7M versus $7.8M in FY 2022.

• Total loans were $10.195B, versus $10.124B in Q3; average loan yield rose to 5.40% from 5.30%.

Outlook and guidance

• 2024 guidance calls for single-digit loan and deposit growth, stable NIM, flat operating expenses, and CET1 above 10%.

• Priorities include high-quality loan growth, deposit mix and funding-cost management, expense discipline, and prudent balance-sheet management.

• Loan-to-deposit ratio target is ~100%; moderate non-maturity deposit outflows are expected to be offset by promotional CDs and high-yield savings.

• NIM is expected to stabilize, with potential modest expansion beginning mid-2024, subject to rates, loan growth, and funding trends; expense run-rate is expected to remain flat.