OceanFirst Financial Corp.

Welcome, everyone, to the Ocean First Corp Earnings Conference Call. My name is Victoria, and I'll be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypads. I will now hand over to your host, Jill Hewitt, from Ocean First, to begin.

Jill, please go ahead. Thank you, Victoria. Good morning, all, and thank you for joining us. I'm Jill Hewitt, Senior Vice President and Investor Relations Officer at Ocean First Financial Corp. We will begin this morning's call with our forward-looking statement disclosure. Please remember that many of our remarks today contain forward-looking statements based on current expectations. Refer to our press release and other public filings, including the risk factors in our 10-K, where you will find factors that could cause actual results to differ materially from these forward-looking statements. Thank you, and now I will turn the call over to our host, Chairman and Chief Executive Officer Christopher Marr. Christopher Marr Thank you, Jill.

good morning to all been able to join our third quarter 2021 earnings conference call today this morning i'm joined by our president joe labelle and chief financial officer mike fitzpatrick as always we appreciate your interest in our performance and are pleased to be able to discuss our operating results with you this morning we'll cover our financial and operating performance for the quarter and provide some color regarding the outlook for our business please note that our earnings release was accompanied by an investor presentation that is available on the company's website. We may refer to these slides during the call. After our discussion, we look forward to taking your questions. In terms of financial results for the third quarter, GAAP-diluted earnings per share were 39 cents. Earnings reflect a continuing economic recovery with the bank demonstrating material loan growth, a pickup in net interest income, and a committed loan pipeline that indicates that our commercial banking expansion continues to gain traction. Credit quality improved again, with the company posting exceptional non-performing asset and delinquency figures, which drove a $3.2 million negative provision for the quarter. Core earnings were somewhat stronger than gap earnings at 45 cents per share, as branch consolidation expenses totaled approximately $4 million on a pre-tax basis. The branch consolidation plan, announced as part of our Investor Day in August, remains on track, with 10 locations scheduled for consolidation in December – and the remaining locations scheduled for January of 2022. In addition, the sale of two branches has received regulatory approval and should settle in early December. Regarding capital management, the Board declared a quarterly cash dividend of 17 cents per common share and approximately 44 cents per depository share of preferred stock. The common share dividend is the company's 99th consecutive quarterly cash dividend. The 17-cent common share dividend represents just 38% of core earnings. Given the robust outlook for loan growth, which will be discussed later in the call, we elected to maintain the current dividend level as we evaluate our ability to deploy internally generated capital. Over the past year, maintaining a conservative dividend payout ratio has allowed tangible book value per share to increase by $1.20, an increase of 8.2%. Tangible stockholders' equity to tangible assets decreased slightly to 8.78% as deposit growth of $359 million increased the balance sheet to $11.8 billion. Our balance sheet remains inflated as we carried approximately $1 billion of cash at quarter end, but the cash is now trending down as loan and securities growth increases. The deployment of cash accelerated through the quarter, with the majority of loan growth occurring in September. The fourth quarter will benefit from a full quarter of elevated earning assets. The company's share repurchase activities continued during the third quarter, with approximately 460,000 shares repurchased. On a year-to-date basis, the company has repurchased 1,460,000 shares at a weighted average price of $20.98. There are 3,559,000 shares available under the current repurchase program, or 6% of the total shares outstanding. Operating expenses were elevated during the quarter as we completed two significant core systems conversions, the conversion of our main core banking platform and the systems integration of the former country bank operation in New York. We also had additional work related to the sale of two branches and the ongoing branch consolidation project. These activities and a few other unusual items added approximately $1.5 million of expenses in the third quarter. As we move into the fourth quarter, these expenses should moderate. The sale of two branches and the consolidation of 10 additional locations in December will also provide a tailwind for operating expenses this quarter. Before I turn it over to Joe, I will note the company's preparations for an inflationary period and the potential impact of interest rate movements. Our expanded investor presentation, which was filed with our earnings release last night, provides detailed information regarding several important areas, including credit quality and interest rate risk positions. Among the disclosures is a quantitative comparison of the bank's asset sensitivity versus national banks with more than $10 billion in assets. As the charts demonstrate, in a rising rate environment, our balance sheet is well protected against rising interest rates should they materialize. One key factor is that our deposit beta in the last rising rate cycle was just 50% of our peers. In addition, our emphasis on the origination of floating rate loans foregoes short-term income in favor of a better protected balance sheet. Joe will discuss that in more detail. At this point, I'll turn the call over to Joe for a discussion regarding progress this past quarter, including an update on the expansion of our commercial bank.