OceanFirst Financial Corp.

Good morning, thank you for attending today's Ocean First Financial Core earnings conference call. My name is Tamiya and I will be your moderator for today's call. Our lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Jill Hewitt, investor relations officer with Ocean First. Please go ahead.

Thank you, Tamiya. Good morning and thank you all for joining us morning. I'm Jill Hewitt, Senior Vice President and Investor Relations Officer at Ocean First Financial Corp. We 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 Moore.

Thank you, Jill. And good morning to all who have been able to join our fourth 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 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 those slides during this call. After our discussion, we look forward to taking your questions. In terms of financial results for the fourth quarter, GAAP diluted earnings per share were 37 cents. Earnings reflect a healthy economy and material loan growth across all regions. Core earnings were stronger than GAAP earnings at 48 cents per share, as branch consolidation expenses and net losses on equity investments totaled approximately $7.3 million and $1.3 million, respectively, on a pre-tax basis. The consolidation expenses relate primarily to real estate exit costs associated with the nine branch consolidations conducted in December. An additional two branches were sold in December, generating a non-core gain of $2 million, partially offset branch consolidation charges for the quarter. Recall that the company previously announced an additional 10 branch consolidations, which will be completed at the close of business today. 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 100th consecutive quarterly cash dividend. The 17-cent common share dividend represents 35% 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. Over the past year, maintaining a conservative dividend payout ratio has allowed tangible common equity per share to increase to $15.93, an increase of 6.3% as compared to December 31, 2020. In addition, the company intends to retire $35 million of subordinated debt carrying an interest rate of 4.14% on March 31, 2022. Tangible stockholders' equity to tangible assets strengthened to 8.89% as total assets decreased $90 million during the fourth quarter, resulting in total assets of $11.7 billion. Our interest-earning assets increased during the quarter, as we continue to see success with our commercial banking expansion strategy. The company's share repurchase activities continued during the fourth quarter, with approximately 251,000 shares repurchased. On a year-to-date basis, the company has repurchased 1.7 million shares at a weighted average price of $21.07. There are 3.3 million shares available under the current repurchase program, or 5.6% of the total shares outstanding. Turning to operations, loan originations of $989 million set a new quarterly record, delivering $441 million in net loan growth in Q4. As of December 31st, the committed loan pipeline also set a new record of $671 million, almost double the pipeline we went into last year with. That should support strong momentum moving into 2022. The deployment of cash drove a pickup in net interest income and another improvement in net interest margin, which ended the year at 2.99%. Considering that a substantial portion of loans were booked late in the fourth quarter, the year-end loan balances were $286 million higher than the average balance for the fourth quarter. As a result, the balance sheet is positioned to deliver additional margin expansion in the first quarter of 2022. Regarding credit trends, the company posted exceptional metrics for the year, including a 33% decrease in criticized assets, low delinquencies, and net recoveries of $461,000 for 2021. Non-performing assets fell by 48% for the year to land at $19 million, or just 16 basis points of total assets. Positive credit trends and stable economic conditions drove a $1.6 million negative provision for the quarter. Operating expenses were elevated this quarter due to the upgrade of the bank's core banking platform earlier this year. We expect this to be a tailwind in 2022 as we finalize our optimization efforts associated with the new platform, partly offset by our continued investment in digital products and services. Additionally, our branch optimization efforts, which consisted of closing 19 full branches, one drive-through, and the sale of two branches, will provide a tailwind going into the first quarter. Finally, we've been working to reduce our tax burden with several strategies, including the organic expansion into markets with more favorable tax policies. Going forward, our estimated effective tax rate should be in the range of 23%. 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.