TOMS RIVER, N.J.--(BUSINESS WIRE)--Jan. 20, 2005--OceanFirst
Financial Corp. (NASDAQ:OCFC), the holding company for OceanFirst
Bank, today announced that diluted earnings per share for the quarter
ended December 31, 2004 increased 17.6% to $.40 from $.34 for the
corresponding prior year period. For the year ended December 31, 2004
diluted earnings per share were $1.42, as compared to $1.53 per share
for the prior year. The Company also announced that its Board of
Directors declared a regular quarterly cash dividend of $.20 per
share--covering the three month period ended December 31, 2004--to be
paid on February 11, 2005, to shareholders of record on January 28,
2005.
In making today's announcement, John R. Garbarino, Chairman,
President and Chief Executive Officer said, "On behalf of the Board of
Directors, I am pleased to report exceptionally strong earnings
performance for the fourth quarter. The diluted earnings per share of
$.40 also represents a continued significant increase over the $.32
and $.35, respectively, reported for the second and third quarters.
The earnings growth is reflective of our efforts in early 2004 to
bolster our senior management team and expand our loan production
platform. I am also pleased to announce our thirty-second consecutive
quarterly cash dividend reflecting an attractive 3.5% yield on our
common stock."
Mr. Garbarino continued, "Strong deposit growth continued for the
third consecutive quarter. During the fourth quarter, deposits
increased $37.3 million, a 12.1% annualized rate. For the full year,
deposits increased by 11.0% or $126.3 million and loans receivable
increased 6.0%, or $83.7 million."
Results of Operations
Net interest income for the quarter ended December 31, 2004
increased to $14.5 million, as compared to $13.6 million in the same
prior year period. For the year ended December 31, 2004, net interest
income decreased to $56.0 million, as compared to $57.6 million for
the same prior year period. For the quarter and year ended December
31, 2004, average interest earning assets increased while the net
interest margin declined as compared to the same prior year periods.
The net interest margin decreased to 3.23% for the quarter and year
ended December 31, 2004, from 3.30% and 3.48%, respectively, in the
same prior year periods. The yield on interest-earning assets
decreased to 5.26% and 5.25%, respectively, for the quarter and year
ended December 31, 2004, as compared to 5.37% and 5.71%, respectively,
for the same prior year periods. High loan prepayment levels over the
past year resulted in a significant decrease in the rate earned on
mortgage-related assets. The cost of interest-bearing liabilities
decreased to 2.23% and 2.22%, respectively, for the quarter and year
ended December 31, 2004, as compared to 2.29% and 2.47%, respectively,
in the same prior year periods.
Other income increased to $6.6 million and $20.7 million,
respectively, for the quarter and year ended December 31, 2004, from
$5.6 million and $18.7 million in the same prior year periods. For the
quarter and year ended December 31, 2004, the Company recorded gains
of $4.1 million and $10.8 million, respectively, on the sale of loans
and securities, as compared to gains of $3.1 million and $11.8
million, respectively, in the same prior year periods. For the year
ended December 31, 2004 the gain on sales of loans and securities
includes a gain of $186,000, on the sale of equity securities. For the
quarter and year ended December 31, 2003, the gain on sales of loans
and securities includes a gain of $396,000 and $719,000, respectively,
on the sale of equity securities. Loan servicing income increased by
$3.0 million for the year ended December 31, 2004, as compared to the
same prior year period due to the recognition of an impairment to the
loan servicing asset of $2.2 million for the year ended December 31,
2003.
Operating expenses amounted to $13.4 million and $48.8 million,
respectively, for the quarter and year ended December 31, 2004, as
compared to $12.4 million and $44.9 million, respectively, for the
corresponding prior year periods. For the quarter and year-to-date,
compensation expense increased due to costs related to the third
quarter 2004 acquisition of a consumer direct lending operation by
Columbia Home Loans, LLC, the Company's mortgage banking subsidiary.
The increase for the full year was also due to the significant
reduction in mortgage loan closings as refinance activity declined
from year ago levels. Higher loan closings in the earlier periods
increased deferred loan expenses which were reflected as a reduction
to compensation expense.
Financial Condition
Loans receivable net, increased by $83.7 million at December 31,
2004 as compared to December 31, 2003. Commercial loans outstanding
increased $46.3 million, or 17.9%.
Deposits increased $126.3 million to $1,270.5 million at December
31, 2004 from $1,144.2 million at December 31, 2003. Core deposits
grew $41.0 million while time deposits increased $85.3 million.
Stockholders' equity increased by $3.3 million to $138.0 million
at December 31, 2004 as compared to $134.7 million at December 31,
2003. For the year ended December 31, 2004, 674,339 common shares were
repurchased at a total cost of $16.2 million. Under the 10% repurchase
program authorized by the Board of Directors in October 2003, 750,055
shares remain to be purchased as of December 31, 2004. The cost of
share repurchases was offset by net income and proceeds from stock
option exercises and related tax benefit.
Asset Quality
The Company's non-performing assets totaled $3.8 million at
December 31, 2004 as compared to $2.4 million at December 31, 2003
with most of the increase relating to one non-performing commercial
loan with an outstanding balance of $1.1 million which the Company had
previously classified as substandard at December 31, 2003. For year
ended December 31, 2004 the Company realized net loan charge-offs of
$414,000.
OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded
in 1902, is a federally-chartered stock savings bank with $1.9 billion
in assets and seventeen branches located in Ocean, Monmouth and
Middlesex counties, New Jersey. The Bank is the largest and oldest
community-based financial institution headquartered in Ocean County,
New Jersey.
OceanFirst Financial Corp.'s press releases are available at no
charge by visiting us on the worldwide web at
http://www.oceanfirst.com.
Forward-Looking Statements
This news release contains certain forward-looking statements
which are based on certain assumptions and describe future plans,
strategies and expectations of the Company. These forward-looking
statements are generally identified by use of the words "believe,"
"expect," "intend," "anticipate," "estimate," "project," or similar
expressions. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors
which could have a material adverse effect on the operations of the
Company and the subsidiaries include, but are not limited to, changes
in interest rates, general economic conditions, legislative/regulatory
changes, monetary and fiscal policies of the U.S. Government,
including policies of the U.S. Treasury and the Federal Reserve Board,
the quality or composition of the loan or investment portfolios,
demand for loan products, deposit flows, competition, demand for
financial services in the Company's market area and accounting
principles and guidelines. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements. The Company does not
undertake - and specifically disclaims any obligation - to publicly
release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
------
Cash and due from banks $ 74,021 $ 36,172
Investment securities available for sale 83,960 80,458
Federal Home Loan Bank of New York
stock, at cost 21,250 19,220
Mortgage-backed securities available for sale 124,478 86,938
Loans receivable, net 1,472,907 1,389,220
Mortgage loans held for sale 63,961 33,207
Interest and dividends receivable 6,033 5,477
Real estate owned, net 288 252
Premises and equipment, net 16,037 16,473
Servicing asset 8,790 7,473
Bank Owned Life Insurance 34,990 33,948
Other assets 7,560 8,571
------------ ------------
Total assets $ 1,914,275 $ 1,717,409
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits $ 1,270,535 $ 1,144,205
Securities sold under agreements to
repurchase with retail customers 45,072 36,723
Securities sold under agreements to
repurchase with the Federal Home
Loan Bank 106,000 70,000
Federal Home Loan Bank advances 312,000 314,400
Advances by borrowers for taxes and insurance 6,289 6,152
Other liabilities 36,423 11,267
------------ ------------
Total liabilities 1,776,319 1,582,747
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized, no shares
issued - -
Common stock, $.01 par value, 55,000,000
shares authorized, 27,177,372 shares
issued and 13,024,204 and 13,350,999
shares outstanding at December 31, 2004
and December 31, 2003, respectively 272 272
Additional paid-in capital 193,723 189,615
Retained earnings 157,575 150,804
Accumulated other comprehensive loss (667) (3,400)
Less: Unallocated common stock held by
Employee Stock Ownership Plan (8,652) (9,911)
Treasury stock, 14,153,168 and
13,826,373 shares at December 31,
2004 and December 31, 2003,
respectively (204,295) (192,718)
------------ ------------
Total stockholders' equity 137,956 134,662
------------ ------------
Total liabilities and stockholders'
equity $ 1,914,275 $ 1,717,409
============ ============
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the quarter For the year
ended December ended December
31, 31,
----------------- -----------------
2004 2003 2004 2003
-------- -------- -------- --------
(Unaudited)
Interest income:
Loans $21,645 $20,823 $83,594 $86,881
Mortgage-backed securities 1,143 799 4,363 4,440
Investment securities and other 801 475 2,995 3,216
-------- -------- -------- --------
Total interest income 23,589 22,097 90,952 94,537
-------- -------- -------- --------
Interest expense:
Deposits 4,270 3,686 15,194 17,243
Borrowed funds 4,837 4,851 19,737 19,651
-------- -------- -------- --------
Total interest expense 9,107 8,537 34,931 36,894
-------- -------- -------- --------
Net interest income 14,482 13,560 56,021 57,643
Provision for loan losses 150 15 300 688
-------- -------- -------- --------
Net interest income after
provision for loan losses 14,332 13,545 55,721 56,955
-------- -------- -------- --------
Other income:
Loan servicing income (loss) 57 105 328 (2,654)
Fees and service charges 2,118 2,005 8,289 7,860
Net gain on sales of loans and
securities available for sale 4,060 3,105 10,832 11,842
Net income from other real
estate operations 10 7 7 113
Income from Bank Owned Life
Insurance 351 375 1,256 1,550
Other 11 12 28 38
-------- -------- -------- --------
Total other income 6,607 5,609 20,740 18,749
-------- -------- -------- --------
Operating expenses:
Compensation and employee
benefits 7,446 6,421 27,242 22,240
Occupancy 1,083 929 3,840 3,592
Equipment 598 625 2,341 2,434
Marketing 772 855 2,020 2,193
Federal deposit insurance 120 119 478 478
Data processing 736 759 2,959 2,994
General and administrative 2,619 2,663 9,879 10,926
-------- -------- -------- --------
Total operating expenses 13,374 12,371 48,759 44,857
-------- -------- -------- --------
Income before provision for
income taxes 7,565 6,783 27,702 30,847
Provision for income taxes 2,572 2,436 9,757 10,974
-------- -------- -------- --------
Net income $ 4,993 $ 4,347 $17,945 $19,873
======== ======== ======== ========
Basic earnings per share $ 0.42 $ 0.36 $ 1.48 $ 1.62
======== ======== ======== ========
Diluted earnings per share $ 0.40 $ 0.34 $ 1.42 $ 1.53
======== ======== ======== ========
Average basic shares outstanding 12,016 12,015 12,108 12,291
======== ======== ======== ========
Average diluted shares outstanding 12,610 12,832 12,666 13,017
======== ======== ======== ========
Cash earnings (1) $ 5,957 $ 5,460 $21,294 $23,459
======== ======== ======== ========
Diluted cash earnings per share $ 0.47 $ 0.43 $ 1.68 $ 1.80
======== ======== ======== ========
(1) Cash earnings are determined by adding (net of taxes) to
reported earnings the non-cash expenses stemming from the amortization
and appreciation of allocated shares in the company's stock-related
benefit plans and the amortization of intangible assets.
OceanFirst Financial Corp.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
At At
December December
31, 2004 31, 2003
---------- ----------
STOCKHOLDERS' EQUITY
--------------------
Stockholders' equity to total assets 7.21% 7.84%
Common shares outstanding (in thousands) 13,024 13,351
Stockholders' equity per common share $ 10.59 $ 10.09
Tangible stockholders' equity per common share 10.49 9.98
ASSET QUALITY
-------------
Allowance for loan losses $ 10,688 $ 10,802
Nonperforming loans 3,488 2,162
Nonperforming assets 3,776 2,414
Allowance for loan losses as a percent of total
loans receivable 0.69% 0.75%
Allowance for loan losses as a percent of
nonperforming loans 306.42 499.63
Nonperforming loans as a percent of
total loans receivable 0.23 0.15
Nonperforming assets as a percent of total assets 0.20 0.14
For the quarter For the year
ended ended
December 31December 31
--------------- ---------------
2004 2003 2004 2003
------- ------- ------- -------
PERFORMANCE RATIOS (ANNUALIZED)
-------------------------------
Return on average assets 1.05% 1.00% 0.98% 1.14%
Return on average stockholders' equity 14.73 13.15 13.34 14.84
Interest rate spread 3.03 3.08 3.03 3.24
Interest rate margin 3.23 3.30 3.23 3.48
Operating expenses to average assets 2.82 2.84 2.67 2.57
Efficiency ratio 63.42 64.54 63.52 58.72
CASH EARNINGS
-------------
Although reported earnings and return on stockholders' equity are
traditional measures of performance, the Company believes that the
change in stockholders' equity or "cash earnings," and related return
measures are also a significant measure of a company's performance.
Cash earnings exclude the effects of various non-cash expenses, such
as the employee stock plans amortization expense and related tax
benefit, as well as the amortization of intangible assets. The
following table reconciles the Company's net income with cash
earnings. The table is a pro forma calculation which is not in
accordance with GAAP.
For the quarter For the year
ended ended
December 31December 31
---------------- ----------------
2004 2003 2004 2003
------- ------- -------- -------
Net income $ 4,993 $ 4,347 $ 17,945 $19,873
Add: Employee stock plans
amortization expense 1,128 1,301 3,793 4,075
Amortization of intangible assets 26 26 103 103
Less: Tax benefit (1) (190) (214) (547) (592)
------- ------- -------- -------
Cash earnings $ 5,957 $ 5,460 $ 21,294 $23,459
======= ======= ======== =======
Basic cash earnings per share $ .50 $ 0.45 $ 1.76 $ 1.91
======= ======= ======== =======
Diluted cash earnings per share $ .47 $ 0.43 $ 1.68 $ 1.80
======= ======= ======== =======
(1) The Company does not receive any tax benefit for that portion
of employee stock plan amortization expense relating to the ESOP fair
market value adjustment.
OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
----------------
At December At December
31, 2004 31, 2003
------------- -------------
Real estate:
One- to four-family $ 1,126,585 $ 1,081,902
Commercial real estate, multi-family
and land 243,299 205,066
Construction 19,189 11,274
Consumer 99,279 81,455
Commercial 61,290 53,230
------------- -------------
Total loans 1,549,642 1,432,927
Loans in process (5,970) (3,829)
Deferred origination costs, net 3,888 4,136
Unearned discount (4) (5)
Allowance for loan losses (10,688) (10,802)
Total loans, net 1,536,868 1,422,427
Less: mortgage loans held for sale 63,961 33,207
------------- -------------
Loans receivable, net $ 1,472,907 $ 1,389,220
============= =============
Mortgage loans serviced for others $ 805,375 $ 723,303
Loan pipeline 250,657 194,124
For the quarter ended For the year ended
December 31December 31
-------------------- -----------------------
2004 2003 2004 2003
---------- --------- ----------- -----------
Loan originations $ 305,996 $227,510 $1,022,735 $1,183,688
Loans sold 183,773 142,756 499,232 622,245
Net charge-offs (recovery) 337 (4) 414 (40)
DEPOSITS
--------
At December 31, 2004 At December 31, 2003
-------------------- --------------------
Type of Account
---------------
Non-interest bearing $ 106,492 $ 108,668
NOW 297,919 249,254
Money market deposit 142,893 138,812
Savings 250,032 259,629
Time deposits 473,199 387,842
-------------------- --------------------
$ 1,270,535 $ 1,144,205
==================== ====================
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE QUARTERS ENDED DECEMBER
31,
-------------------------------
2004
------------------------------
AVERAGE INTEREST AVERAGE
BALANCE YIELD/
COST
-------------------------------
(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and
short term investments $ 20,934 $ 102 1.95%
Investment securities 84,809 570 2.69
FHLB stock 21,859 129 2.36
Mortgage-backed securities 131,774 1,143 3.47
Loans receivable, net (1) 1,534,254 21,645 5.64
---------- --------- ---------
Total interest-earning assets 1,793,630 23,589 5.26
--------- ---------
Non-interest earning assets 100,292
----------
Total assets $1,893,922
==========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 703,353 1,250 0.71
Time deposits 454,599 3,020 2.66
---------- --------- ---------
Total 1,157,952 4,270 1.48
Borrowed funds 475,158 4,837 4.07
---------- --------- ---------
Total interest-bearing liabilities 1,633,110 9,107 2.23
--------- ---------
Non-interest-bearing deposits 111,988
Non-interest bearing liabilities 13,262
----------
Total liabilities 1,758,360
Stockholders' equity 135,562
----------
Total liabilities and stockholders'
equity $1,893,922
==========
Net interest income $ 14,482
=========
Net interest rate spread (2) 3.03%
=========
Net interest margin (3) 3.23%
=========
FOR THE QUARTERS ENDED DECEMBER
31,
-------------------------------
2003
------------------------------
AVERAGE INTEREST AVERAGE
BALANCE YIELD/
COST
-------------------------------
(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits and
short term investments $ 8,765 $ 20 0.91%
Investment securities 86,775 455 2.10
FHLB stock 20,095 - -
Mortgage-backed securities 94,636 799 3.38
Loans receivable, net (1) 1,435,698 20,823 5.80
---------- --------- ---------
Total interest-earning assets 1,645,969 22,097 5.37
--------- ---------
Non-interest earning assets 98,757
----------
Total assets $1,744,726
==========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 659,544 969 0.59
Time deposits 394,340 2,717 2.76
---------- --------- ---------
Total 1,053,884 3,686 1.40
Borrowed funds 435,747 4,851 4.45
---------- --------- ---------
Total interest-bearing liabilities 1,489,631 8,537 2.29
--------- ---------
Non-interest-bearing deposits 108,689
Non-interest bearing liabilities 14,176
----------
Total liabilities 1,612,496
Stockholders' equity 132,230
----------
Total liabilities and stockholders'
equity $1,744,726
==========
Net interest income $ 13,560
=========
Net interest rate spread (2) 3.08%
=========
Net interest margin (3) 3.30%
=========
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
2004
------------------------------
AVERAGE INTEREST AVERAGE
BALANCE YIELD/
COST
--------------------- ---------
(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits
and short term investments $ 14,527 $ 190 1.31%
Investment securities 85,258 2,400 2.81
FHLB stock 22,357 405 1.81
Mortgage-backed securities 130,749 4,363 3.34
Loans receivable, net (1) 1,479,504 83,594 5.65
---------- --------- ---------
Total interest-earning assets 1,732,395 90,952 5.25
--------- ---------
Non-interest earning assets 97,072
----------
Total assets $1,829,467
==========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 678,273 4,216 0.62
Time deposits 414,393 10,978 2.65
---------- --------- ---------
Total 1,092,666 15,194 1.39
Borrowed funds 478,740 19,737 4.12
---------- --------- ---------
Total interest-bearing liabilities 1,571,406 34,931 2.22
--------- ---------
Non-interest-bearing deposits 111,135
Non-interest bearing liabilities 12,378
----------
Total liabilities 1,694,919
Stockholders' equity 134,548
----------
Total liabilities and stockholders'
equity $1,829,467
==========
Net interest income $ 56,021
=========
Net interest rate spread (2) 3.03%
=========
Net interest margin (3) 3.23%
=========
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
2003
------------------------------
AVERAGE INTEREST AVERAGE
BALANCE YIELD/
COST
--------------------- ---------
(Dollars in thousands)
Assets
Interest-earnings assets:
Interest-earning deposits
and short term investments $ 12,115 $ 127 1.05%
Investment securities 88,966 2,339 2.63
FHLB stock 19,518 750 3.84
Mortgage-backed securities 116,633 4,440 3.81
Loans receivable, net (1) 1,419,477 86,881 6.12
----------- --------- ---------
Total interest-earning assets 1,656,709 94,537 5.71
--------- ---------
Non-interest earning assets 90,698
----------
Total assets $1,747,407
===========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Transaction deposits $ 648,970 4,794 0.74
Time deposits 421,157 12,449 2.96
---------- --------- ---------
Total 1,070,127 17,243 1.61
Borrowed funds 424,829 19,651 4.63
---------- --------- ---------
Total interest-bearing liabilities 1,494,956 36,894 2.47
--------- ---------
Non-interest-bearing deposits 102,294
Non-interest bearing liabilities 16,226
----------
Total liabilities 1,613,476
Stockholders' equity 133,931
----------
Total liabilities and stockholders'
equity $1,747,407
===========
Net interest income $ 57,643
=========
Net interest rate spread (2) 3.24%
=========
Net interest margin (3) 3.48%
=========
(1) Amount is net of deferred loan fees, undisbursed loan funds,
discounts and premiums and estimated loss allowances and includes
loans held for sale and non-performing loans.
(2) Net interest rate spread represents the difference between the
yield on interest-earning assets and the cost of interest-bearing
liabilities.
(3) Net interest margin represents net interest income divided by
average interest-earning assets.
CONTACT: The Foristall Company, Inc.
Thomas F. Curtin, 610-398-3022
Fax: 610-530-7781
[email protected]
or
OceanFirst Financial Corp.
Michael J. Fitzpatrick, 732-240-4500, ext. 7506
Fax: 732-349-5070
[email protected]
SOURCE: OceanFirst Financial Corp.