Oceanfirst Financial Corp Q2 FY2025 Earnings Call

Thank you all for attending. I'd like to welcome you all to the Ocean First Financial Corp Q225 Earnings Call. My name is Bricka, and I will be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Alfred Goon, Investor Relations at Ocean First. Thank you. You may proceed.

Thank you, Bricka. Good morning and welcome to the Ocean First Second Quarter 2025 Earnings Call. I am Alfred Kuhn, SVP of Corporate Development and Investor Relations. Before we kick off the call, we'd like to remind everyone that our quarterly earnings release and related earnings supplement can be found on the company website OceanFirst.com. Our remarks today may contain forward-looking statements and may refer to non-GAAP financial measures. All participants should refer to our SEC filings, including those found on forms AK, 10Q, and 10K for complete discussion of forward-looking statements and any factors that can cause actual results to differ from those statements. Thank you and now I will turn the call over to Christopher Marr, Chairman and CEO. Thank you, Alfred. Good morning and thank

you to all who have been able to join our second quarter 2025 earnings conference call. This morning I'm joined by our President Joe LaBelle and our Chief Financial Officer Pat Barrett. We We appreciate your interest in our performance and this opportunity to discuss our results with you. This morning, we'll provide brief remarks about the financial and operating performance for the quarter, and some color regarding the outlook for our business. We may refer to the slides filed in connection with the earnings released throughout the After our discussion, we look forward to taking your questions. We reported our financial results for the second quarter, which included earnings per share of 28 cents on a fully diluted gap basis and 31 cents on a core basis. Before I walk through a few items, a summary of how we see the quarter may be helpful. This was an investment quarter as we added C&I bankers, launched the Premier Bank, opened a commercial banking office in Melville, New York, and opened a new full service branch in Perth Amboy, New Jersey, all of which increased expenses as we expected and as we had guided last quarter. Revenue growth has been on a strongly positive track, and we expect that to continue, while absolute expenses remain flat with some potential to decrease over time. As a result, we view the quarter as a trough in EPS that will build from this point as the organic growth momentum continues. We expect this progress to continue while credit performance remains among the best in our peer group. In terms of performance indicators, we were pleased to report a third consecutive quarter of growth in net interest income, which grew by $1 million, and continued stability in our net interest margin, which expanded by one basis point. Importantly, the loan growth in the quarter came late in June, so the quarterly results don't fully reflect the earnings power of the balance sheet, which is better positioned for additional improvements to net interest income in the third quarter. Total loans for the quarter increased $60 million, representing a 2% annualized growth rate, driven by strong originations of $716 million. The quarter also included strong growth in commercial and industrial loans, which increased 8% for the quarter, reflecting our focus in this segment. Operating expenses for the quarter were $71 million, in line with our expectations and previous guidance. Operating expenses included nearly a full quarter of the run rate from our recent commercial banking hiring efforts and the launch of the premier bank group. These additional bankers have been immediately productive. Joe will provide a detailed update on these initiatives in a moment. Asset quality remained very strong as total loans classified as special mention and substandard decreased three percent to 145 million dollars or just 1.4 percent of total loans. Classified loan levels remain well below our long-term average and are substantially lower than our peer group. The quarterly provision was primarily driven by net charge-offs of $2.2 million, and by a mixed shift as commercial and industrial loans increased while commercial real estate loans decreased slightly. Capital levels remained robust, with an estimated common equity Tier 1 capital ratio of 11 percent and tangible book value per share of $19.34. The quarter included $17 million of share repurchases, or 1 million shares at a weighted average cost of $17.17, and the redemption of $57 million of preferred stock. With the existing share repurchase authorization nearly completed, on July 15th, the company authorized an additional 3 million shares available to be repurchased. This will allow us to remain flexible with our capital deployment. This week, the Board also approved a quarterly cash dividend of 20 cents per common share. This is the company's 113th consecutive quarterly cash dividend. Finally, we're very pleased with our progress growing the commercial bank, which is on track for a strong third quarter. The commercial pipeline of $791 million is a record high, but we're seeing meaningful lending opportunities and early success gathering deposits. We expect an increase in net interest income in the third quarter and continued improvement to margins in the second half of the year. At this point, I'll turn the call over to Joe for

additional color on the business. Thanks Chris. I'll start with loan originations for the quarter which totaled 716 million including 426 million from the commercial bank inclusive of 232 million of CNI originations. For the second consecutive quarter the commercial pipeline has doubled and as Chris noted is a record high for the company. This momentum is directly attributed to our investment in talented commercial banking hires who continue to add diversity in size and geography to the pipeline. At this point, we've completed the majority of our commercial banking hires for the year, with 13 C&I bankers and 36 premier bankers hired in 2025. Turning to our residential business, activities increased on the link core basis, but our markets continue to remain impacted by uneven loan demand, volatility in rates, and limited inventory. The second quarter is typically our low point in deposit balances for the year, as government balances decline and seasonal shore businesses consume cash in preparation for the summer. Deposit balances, excluding brokered CDs, decreased approximately 1% compared to the link quarter but increased by 117 million compared to the same period in 2024. The addition of our new premier banking teams, all of which we onboarded in April, have contributed to the bank in short order. As of June 30th, these teams brought in 115 million in deposits across more than 670 accounts representing nearly 200 new customer relationships. Approximately 20% of those balances are in non-interest-bearing DDA, and the overall weighted average cost of those deposits was 2.7%. As these relationships begin to transition to ocean first, we expect a percentage of DDA to increase, as many of these accounts are not yet fully operational as of quarter end. These bankers are on pace to achieve our 2025 target of nearly $500 million in deposits by year end, while also contributing to the commercial loan pipeline. We are very pleased with their results thus far. Lastly, non-interest income increased 5 percent to $11.8 million during the quarter. After excluding non-core and non-recurring items, non-interest income was down 1% compared to the prior quarter due to lower swap activity largely offset by gain on sale. With that, I'll turn over the call to Pat to review the remaining areas for the quarter.

Thanks, Joe. Good morning to everyone on the call. As Chris noted, both net interest income and margin grew in the quarter, with loan yields increasing four basis points and total deposit costs remaining flat. Average interest-earning assets declined during the quarter, reflecting modest declines in the securities portfolio, while average loan balances only increased slightly due to larger payoffs early in the quarter and higher originations late in the quarter. We expect positive expansion in both net interest income and margin in the back half of the year based on period imbalances and pipelines. Asset quality remained very strong with non-performing loans to total loans at 33 basis points and non-performing assets to total assets at 31 basis points. Delinquency levels continued to remain at the low end of historical levels and criticized and classified loans declined. Debt charge-offs for the quarter were largely driven by two commercial credits totaling 1.6 million dollars and just over 400 000 from a small sale of non-performing residential loans overall credit quality continued to perform in line with our strong historical experience and remains among the best in our peer group credit reserves were stable with provision expense only addressing charge-offs growth and a mixed shift in loans turning to non-interest expenses they increased about seven million dollars to 71 and a half million driven by increased comp expenses professional fees and other operating expenses the increase in compensation expense was driven by the recent commercial banking hires while professional fees included 1.6 million of non-recurring recruiting fees related to these hires other operating expenses reflected some volatility across a number of minor categories and are expected to revert back to historical levels looking ahead we expect our quarterly operating expense run rate to remain stable in the 71 to 72 million dollar per quarter range with normalizing professional fees being offset by a full quarterly run rate of compensation and occupancy for the recent addition of banking teams and as chris noted capital levels remained robust and included 1 million shares repurchased at a weighted average cost of 17.16 per share and while we reloaded our repurchase plan by three million dollars three million shares we expect capital priorities will focus on supporting expected loan growth in the near term and will reserve any share repurchases for periods of market volatility finally a word on taxes we expect our effective tax rate which was 24 percent in the second quarter to remain in the 23 to 25 percent range absent any changes in policy at this point we'll begin the question and answer portion

of the call thank you thank you we will now begin the question and answer session and if you would like to ask a question please press star followed by one on your telephone keypad if for any reason you would like to remove that question you can do so by pressing star followed by two and again to ask a question please press star one and as a reminder if you are using a speakerphone please remember to pick up your handset before asking a question. The first question we have from the phone lines comes from Daniel Tamayo with Raymond James. Please go ahead.

Thank you. Good morning, guys. Maybe to start just on the deposit side, you know, curious, you got a lot going on, right? You got the new hires, you added 115 million, And I think you said, Joe, including some some DDA there at the same time that the overall funding costs are starting to stabilize. So as as this shift continues to happen with with the deposits coming on from the new hires, if we could pull rate cuts out of this for a second, do you think you can reduce funding costs going forward? And how much of that is, like, further out, like, next year or the year after type of thought, and how much is more near-term?

Certainly an opportunity through a mix shift to reduce it a little bit. I think absent rate cut, I wouldn't see a lot of movement in the near-term. The CDs we have rolling over in Q3, I think, have an average rate of about 3.8%. So there's a little bit of opportunity there, not a lot, and it's not a lot of maturity, So it's not going to drive a big change in the mix, but, you know, as the premier banking teams come on, Joe noted, you know, they're going to have slightly higher levels of DDA, but also outside the premier bank, the C&I growth has been very strong, and the accounts that they bring along are going to tend to be, you know, far better priced than kind of market rate accounts that you'd raise.

I think the only thing I'd add is, you know, historically the second quarter is the weakest quarter for us. Government seasonality, tax payments, all those kinds of things are on the come. And we have a lot of the operational businesses utilizing cash. So 3Q, 4Q should be better.

Okay. And I guess bigger picture, kind of same theme, but on the margin, you know, stable to slightly up in the third quarter. Or maybe if there was a rate cut, it would have been stable or slightly down. But I'm just trying to think about the trajectory of the margin longer term, you know, obviously up. But your thoughts on kind of how quickly that translates into margin expansion as we get into the outquarters here?

Probably a slow and steady process where it's going to just come up maybe a few basis points a quarter. we think we're within striking distance of that three percent, which is important to us. Unclear whether we would get there by year-end, but we're on the path to get there and cross over that. So I think it's going to spend a little bit on mix shifts and how many dollars people have in different account types, but it's certainly improving. And in the loan side, you know, as we grow loans, the mix of the loans we grow will also be important and the weighted average coupon. You the weighted average coupon in the pipeline came down a little bit quarter over quarter that just reflects more uh cni deals which tend to be priced in the short end of the curve so they tend to have lower uh nominal rates but they're adjustable um which is good thank you the operator to move to

the next question please we have another question from tim with kbw hey good morning thanks for

my questions um but the first one i have is just a quick clarification on the outlook for stable um non-interest income what's the base for that is that the adjusted number or reported

sorry i didn't it's pat could you say the first part of that question one more time

yeah what is the base we should be using for the guidance for stable non-interest income gap is

The best base to use, they're almost the same at this point for this quarter. So if you're looking at margin 291 versus 290. Even the non-interest income. Oh, I'm sorry, for the non-interest income. Fee income. Use the gap.

Yeah, gap and stable. Okay, so like that $12 million number? Okay. And then can you guys – you guys talked about it a little bit last quarter, but could you provide a little bit more details on kind of what was the expense lift from the new hires you made in Premier Bank and how did that impact the earnings this quarter? And I think we were now a more stable run rate going forward, right? You know, any plans for new hires over

the rest of the year? No plans for new hires. If you think about it in EPS terms, the additional expenses in Q2 probably hit us about six cents in EPS. And then that will now reverse and we'll

start the pulling out of that and just to kind of simplify from a geography perspective as we get the full quarter impact because a lot of these hires didn't start until late in april expect our comp expense will drift up a bit higher so call it go from 40 million run rate to 42 million run rate but professional fees will come down by 2 million because we won't have all the hiring costs so net we should be flat on opex although i would add we're not relaxing on expenses we have a number of things that we're looking at and we actually do think there are opportunities for us in absolute terms to gain some additional expense efficiencies we're just

not guiding to that right now okay um and then the last question i have is you guys have been pretty decent capital levels here can you update us on your thoughts about you know your approach to M&A, how much of a priority that is relative to

dividend and share repurchase? Our primary focus is on the organic growth plan and producing the earnings momentum we think that we need to show. And I think we're also very mindful of where our shares trade relative to book value. There are not very many opportunities that would make sense for our shareholders with the valuation of our shares today. so uh that's kind of how we think about things great thank you guys thank you

your next question comes from dave bishops from hefty group hey good morning gentlemen hey um

question um good to uh catch up i think you said in the preamble the uh the the deposits thus far from the premier team, maybe 20% DDAs, seeing that ramping up. Do you see the weighted average rate going below the average for the entire bank over time and pushing that appreciatively lower

as you onboard more of these accounts? So, yeah, so right now it's in the 260 range. It's been holding, and we've seen additional growth since the end of the quarter. The bank-wide cost of deposits is closer to 2%. I think we'll get down to kind of match the bank maybe a little bit better than the bank, but our expectation is that, you know, 30 percent or so will be non-interest-bearing. The rest is going to be some version of market, maybe not, you know, the highest rate you have to pay, but something. So I think it's going to be very efficient funding, but we don't expect it to be, you know, free funding. Think of it kind of gravitating towards the cost of deposits for the rest of the bank, but being able to grow at a much faster clip we've got a great deposit cost but we haven't been growing as quickly we want to match the growth rates we need to fund the balance sheet got it and any

um i know it's still early in the uh the life cycle here but any uh you know new line of sight

on potential loans emanating from that segment actually they were pretty bullish on the opportunity there obviously with the premier bank the expectation is deposit focus but we've already driven some significant activity that you're seeing in the pipe already, and I expect that to continue to grow over time. So we're very pleased with the activity on that end of the

spectrum as well. And Joe, sticking maybe with loans on the commercial side, just curious where you're seeing sort of the best opportunity, either geographically or, you know, within that C&I segment, any, you know, specific verticals that are driving the majority of growth your way when And it's a pretty tough environment to grow C&I in this market.

Yeah, and Dave, we're pretty thoughtful about, obviously, what we're seeing in markets. But the good news is, from a geographic perspective, we're seeing it all over the footprint, which I truly appreciate. It's not being driven by one area. But we've seen good continued momentum in our North Virginia market and government contracting. But I have also seen some really good activity in our home markets, which have been a little quiet. So that's good to see as well. We've seen some equipment finance. I wouldn't go as far as to say there's any real concentration in vertical, in any vertical. But when you hire the people we've hired, some of that is the fact that they're bringing relationships that they've built over 15, 20 years to us. so even though the environment's difficult we're we're uh we're taking market share from others

got it then maybe a housekeeping item on the uh the sub debt there's any uh update there in terms of the thinking of uh resumption and retirement thanks watching that market carefully

it gets uh have more efficient uh teams every quarter so uh we don't feel uh you know a burning need to have to address that immediately we have the option to address it in either pieces or or potentially doing new issuance um you know the recent issuances in the last few weeks have looked pretty promising so we think about it often and and when we think that opportunity is right we might refinance it uh or we might look to kind of pay down a little bit with earnings over time we like having optionality or watching the markets and um could go in either direction over the next quarter great thanks thank you the next question comes from

Hey, good morning.

Is the 3Q Loan Growth Guide, how sustainable is that, and how much is that based on what you've seen so far this quarter and what's expected by the year-end, and how much give is there in that projection?

I think we feel pretty confident given the pipeline that we have, and I think the continued pipeline growth. I think, Manny, the real challenge for anybody else is what are you going to see at the other end? We've seen payoffs abate since early in the quarter, and especially in Q1, which is a positive. I can't predict what could occur in the future, but in terms of what we're originating, who's originating it, where it's in our footprint, we're pretty confident we're going to continue to drive that momentum forward. So on that end of it, I think you can be as confident as you can be. So I think that's probably a fair assessment.

I would add, you know, in our conversations with our clients, they're reporting to us that business conditions are good for them. They've got building backlogs. They've got plenty of work, plenty of opportunity. We're seeing them increasingly, you know, lean in and make investments. So I know kind of those macro headlines are concern over the economy. We have not seen that reflected in the comments from our customers to date, but that could change. You know, we live in a volatile world, but for now, our clients are thinking pretty positively to doing projects. We've got good visibility. And a lot of these hires we made, you know, they're going to produce opportunities for us for years to come. Typically, a commercial banker takes, you know, could be anywhere between 18 months and three years to reach their full potential. So I think this is a sustainable growth rate.

I appreciate that. It looks like if you look at what you're bringing in from the commercial deposit teams, what you have in the loan pipeline, there's like a marginal NIM close to 4% plus. What keeps you from growing the NIM or expanding the NIM even faster?

i think just the pace at which there's net additions to the balance sheet so um there is a scenario many under which if we're growing and compounding this growth and there are rate cuts you could see a faster expansion and we just don't want to um until we've seen that

for a few quarters we don't want to get ahead of ourselves shifting topics a little bit it seems like the team is largely in place at the moment um maybe for this year is there any shift in the hiring focus? Any expansion in geographies at the moment across the Premier Bank or even in C&I?

No new geographies. We're very happy. We have enough geography that gives us the appropriate concentration balance because we don't want to have too much of anything in any one market. So we think we've got that covered and our markets are exceptionally deep. We operate in the strongest banking markets in the country. We essentially think that the hiring is done for this year, but if a great banker comes available to us next month, we're going to hire the great banker because that's good for the company. So, but I would assume that the hiring is done for this year. As we get through year-end, look through our performance in Q3, Q4, heading into Q1, We will consider what the appropriate growth rate is for 26 based on how we're performing with the teams we've hired thus far. So for now, that's why I think Pat guided to a flat to possibly even reduce the operating expense level over time. So we'll keep you guys updated on our plans in that regard.

I appreciate the commentary. Thank you. I'll step back into the queue.

Thank you.

Thank you. We now have Christopher Maranac with JMS. Your line is open, Christopher.

Hey, good morning. Chris and Joe and team, I wanted to ask a little bit about the kind of big picture on deposits on the Premier Bank. I mean, given the strong quarter you just had, I mean, is there the potential to kind of rethink that upper number over time? Not thinking the next quarter, of course, but just curious if the $500 million can be bigger as next year in the future come into focus.

we've been make a qualitative comment not a quantitative comment we're really pleased with the relationships we're being introduced to with their customers trust and coming over to us joining the bank you know Joe mentioned hundreds of accounts a couple hundred relationships they've really done what we would have expected to do and this is you know only the first eight weeks or so that they were on board it does take a little while to get oriented any in any new place you have to kind of find the restroom and work through policies and all that kind of stuff. So very pleased with the quality of the conversations we're having. I think it'd be premature to reset a different guidance level. Let's see how we go through the end of the year. And Joe, what would you add on the conversations you've had? Both Joe and I have been out and met a lot of these new customers and I really appreciate the quality of the

folks you're bringing over. I think the only thing I did for Chris is that we We have provided some guidance toward multiple years out, and we fully expect, obviously, that we'll continue to grow these balances into bigger dollars, 26 and 27.

And that was a pretty wide guidance, I think. So we could outperform on the top end, but we're only in this a couple months. So I want to kind of build some momentum and have a track record before we adjust anything.

Understood. And I see the multi-year aspirational goals. I was just curious how we go from, you know, this $500 million to even the $2 billion in 2017, but we'll continue to let that play out. So thank you for the color, both of you. Any comments on just sort of overall credit quality as it pertains to the, I guess, longer term interest of trying to grow the reserve just in general? Is that still a possibility for you as these scenarios have played out?

I think that's going to be determined by the mix shift, Chris, over time. So as we, as the portfolio becomes, has larger composition of CNI loans and a smaller composition of CRE loans relative to each other, we would expect to carry slightly higher reserves. So it didn't turn out that it was, you know, very small growth this quarter, so that wasn't an opportunity. The mix shift didn't provide enough to see a reserve build, but I would not be surprised if you see the reserve continue to build for the next several quarters as the mix shift changes. So we think it's heading in that direction. It's just a quarter where the numbers didn't turn out.

Great. And then this last question, you know, the small improvement we saw on the criticized ratio, are there upgrades driving that? are there other upgrades that are possible in the future just sort of curious on any background

we've got a number of things that we think may resolve in the second half of the year that we provide some some upside to that but we always get cautious for two reasons first we don't know the environment we're going into and we're at an absolute you know fairly low level so as much as we might have positive resolutions there's always situations where you may have a creditor too that would slip, you know, into that. But nothing, we're not seeing anything in portfolio trends, risk ratings, delinquencies, there's no sign of a wider deterioration. And you know, the composition of the loans is really important. We've stayed out of some of the segments that have higher levels of concern. So we have a relatively small multifamily book, we don't really operate In the rent stabilized world, our central business district office portfolio is very small. So, you know, I think the portfolio is structured well to not have an outsized issue. Performance indicators are good, might get a little bit better, but probably won't get a lot better because these are pretty low levels, you know, notionally.

Great, Chris. Thank you all for the call today.

Thanks, Chris.

just as a reminder to ask any further questions you need to press star followed by one on your telephone keypad and we now have a question from matthew brews with stevens please go ahead

hey good morning everyone um you know first i just wanted to circle back uh i think i think mr tamayo asked about the nim impact from each 25 base for basis point cut both initially and over time we cut out there due to the connection i just want to make sure that was answered

Okay yeah no thank you thank you for that Matt because we didn't hear that

part of the question. So we're not wildly exposed to much volatility with or without Fed rate cuts. The impact for us is really more kind of in the belly of the curve see what the two and the five-year and the ten-year do so there's not a dramatic dollar amount it rounds to kind of less than a penny a share on an annualized basis per 25 basis point cut anything that we're talking about from a guidance perspective doesn't really contemplate anything meaningful from that any big change in the curve kind of go with consensus so if we have a third quarter rate cut and a year-end rate cut and right now which I think is what most people think would happen but if we got one next week a 25 BIP cut there might be a little timing lag but you'd see kind of the the negative on the floating rate book coming through and then the positive would would come through and lower deposit costs and with maybe a one-quarter lag

I think it's Pat's point. Appreciate that. The longer end, it matters probably be more. If there's a Fed cut and then the long end comes up, that might be more beneficial than just a cut. If there's a cut where the long end stays where it is, probably not that much.

The cheaper is always better.

We're still pretty neutral right now.

I wanted to go back to deposits. So, you know, the incremental premier deposits came in at, I think, right around 270. The bank as a whole is at 206. so it feels like you know by the numbers the incremental growth should take deposit costs higher but you're suggesting maybe there's actually some some room to reduce costs so i'm curious you know the other parts of the bank what is kind of the blended new rate of deposits you know and or are there you know agreements with your banking deposits that you know whatever rate they're getting is more or less you know there's some you know um you know short-term

elements to it maybe help me out there it's just the the operational way that accounts get funded matt so you know the bankers showed up in mid-april they begin to open accounts in probably by early mid-may and and then there's a process on a commercial account you have to go do all the beneficial ownership stuff you know paperwork filed then they have to go out and operationally kind of wind down wherever they're banking today and move over their cash management the checks and payment methods and all that so as a result the early deposits you get in tend to be rate driven deposits and then you've got the operating accounts but they've got nothing in them and then they build in their balances over time so I think Joe had guided to you know maybe closer to 30 percent non-interest bearing over time that would pull that 260 270 down closer to the 206 and if we can do better than that you might even outperform it but we don't think it's to drag the deposit costs up at the bank uh we think over time we can kind of get gather deposits

about where we're priced today okay that makes much more sense um i did want to touch on securities yields you know down you know pretty sizably the last three quarters what's going on there

and and where do we start to hit you know stability in securities yields because that seems to be

uh a head point to the margin yeah well the the decline there's a couple of things that are at work there a third of our securities book is loading rate so as you see any movements there you get a little bit of directional push but then the duration is pretty slow pretty short as well so we've got reinvestment that's occurring of instruments that we entered into in a higher rate environment that are repricing out already based on the the kind of belly of the curve a little bit longer end so those are the main drivers there wasn't a huge mix shift in in those and they still remain you know largely treasury treasury cmos agency paper so whatever the rates are on on those type of instruments is what you'll see it's really only the floating rate piece which is our clo book that kind of moves around um with uh the short end of rates okay um and then

low yield expansion this quarter was i i want to say maybe four-ish basis points uh in the absence of rate cuts is that a decent rate of expansion uh from here i think that's a good that's a good proxy and then last one for me is just you know as you think about loan growth and the guidance To what extent are you baking in commercial real estate payoffs? It seems to be a common theme this quarter. There's a lot of competition for pay for commercial real estate. That's all I have.

Matt, in terms of commercial real estate, we think we do that well. And while we are focused on adding to the C&I book, we're not exiting or leaving the CRE book. We've done it well. It's performed well. We have great clients there. It can be episodic on paydowns. That's the way that world works. if you have you know one big loan can make a difference um but we would hope that the cre would remain flat maybe we could grow it a little bit depending on um opportunities but we do have

a strong pipeline in cre yeah we've seen a resurgence in cre transactions and great example matt is the largest payoff we got this quarter was a 55 million dollar transaction 52 million at three and a half percent so as long as i can put that money back out and i'll put it out this quarter i'll take that trade even though i'm not theoretically growing the balance sheet on the cree side i do believe i'll be able to replace those payoffs in the second half of the

year so if you're thinking about modeling that keeping cre balances steady is probably a decent bet it might go up a little bit it might go down a little bit but we're not i would not expect that

portfolio to be in runoff i appreciate all that that's all i had thank you thanks thank you i

can confirm that does conclude the question and answer session and i would like to hand it back to chris for some final closing comments please thank you very much we appreciate your time today

uh apologize for the detection technical glitch in the call that kind of got us disconnected for a little bit uh but we do appreciate your time and your support of ocean first financial corp we hope you have a great summer your plans bring you to the jersey shore come visit us and we'll talk to you in October. Thank you very much.

Thank you. I can all confirm that does conclude today's conference call with Ocean First Financial Corp. You all may now disconnect. Thank you all for your participation and please enjoy the rest of your day.