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Sep 30, 2020
OceanFirst Q3 2020 Earnings Report
Announced third quarter financial results, which were impacted by the COVID-19 pandemic through higher credit losses and increased operating expenses.
Key Takeaways
OceanFirst Financial Corp. reported a net loss available to common stockholders of $6.0 million, or $(0.10) per diluted share, for the three months ended September 30, 2020, compared to net income available to common stockholders of $25.0 million, or $0.49 per diluted share, for the corresponding prior year period. The results were impacted by the COVID-19 pandemic, through both higher credit losses and increased operating expenses.
COVID-19: Third quarter results were adversely impacted by the COVID-19 pandemic, including an elevated credit loss provision of $35.7 million and an additional $1.7 million in operating expenses.
Credit Quality: Transferred $45.5 million of forbearance loans to held-for-sale at September 30, 2020, excluding the loans held-for-sale, loans under full forbearance were $209.6 million, or 2.6% of total loans, at October 23, 2020.
Deposits: Deposits increased by $315.5 million, of which $79.0 million were non-interest bearing deposits, the total cost of deposits decreased to 0.49% for the quarter ended September 30, 2020.
Capital: The Company continues to maintain strong capital levels with tangible stockholders’ equity of $935.7 million for a tangible stockholders’ equity to tangible assets ratio of 8.41%.
OceanFirst
OceanFirst
Forward Guidance
Company chose to accelerate efforts to address highest risk loans by liquidating $67.5 million of those assets, thereby reducing the time and effort required to manage non-performing loans.
Positive Outlook
- Focus remains firmly on the strong potential for business
- Includes a variety of growth initiatives
- Proactive capital management
- Company have also substantially strengthened allowance for credit losses as a percentage of non-performing loans held-for-investment
- Disciplined actions and continued sound risk management have set the stage for improved results in future quarters
Challenges Ahead
- Ongoing global pandemic has created significant challenges for individuals and businesses
- Quarterly results were disappointing
- The Company’s third quarter results were adversely impacted by the COVID-19 pandemic
- Elevated credit loss provision of $35.7 million
- Additional $1.7 million in operating expenses