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CFO James Reske indicated that consensus expense forecasts were reasonable but noted potential for seasonal declines in both noninterest income and expenses in Q4. Regarding buybacks, Reske explained the company uses a price-sensitive grid, setting a cap (e.g., potentially $17) and buying on dips rather than repurchasing at any price. Chief Credit Officer Brian Sohocki addressed credit, stating that charge-offs have normalized after previous headwinds and are expected to return to the mid-20 basis point range, absent the single large commercial floor plan credit.

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President and CEO Thomas Michael Price and Chief Lending Officer Michael McCuen noted strong momentum in equipment finance, partly due to talent investment and competitors pulling back. They observed that commercial clients, having learned from the pandemic, are proactively managing supply chains against tariff uncertainty. Regarding deposits, Price and Bank President Jane Grebenc explained that the growth in savings is partly due to customers parking funds from maturing CDs while awaiting rate clarity, and a strategic focus on deposit gathering.

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CFO James Reske explained that card income has stabilized post-Durbin impact, while SBA and mortgage businesses are performing well. He noted strong swap fee income in Q4 might not repeat at the same level but is primed for growth. President and CEO Thomas Michael Price added that year-over-year gains in SBA, mortgage, and wealth management's trust income successfully blunted the Durbin impact. Regarding loan growth, Price stated it will be a gradual ramp-up driven by a mix of CRE, C&I, indirect auto, and equipment finance, with a long-term strategic goal to increase the C&I portfolio to over 25% of the balance sheet.

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CFO Jim Reske stated that the securities portfolio is expected to grow by approximately $100 million in 2025. An executive, likely Chief Credit Officer Brian Taake, detailed the specific reserves: a $2.7 million reserve on a $10 million mixed-use office construction loan in Pittsburgh and a $2.8 million reserve on a $4.8 million term loan within the sponsor finance portfolio.

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President and CEO Jeffrey Jackson attributed the rise in criticized loans to regrading acquired Premier credits and expects improvement. He affirmed that all LPOs follow the same centralized, stringent credit policies. Jackson outlined capital priorities as 1) the dividend and 2) organic growth, with M&A and buybacks being lower priorities. Senior EVP & CFO Daniel Weiss added that the company is evaluating its options for its preferred stock and sub-debt, which are callable soon, and plans to take action to avoid high reset rates.

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Daniel Weiss, Senior Executive Vice President and CFO, provided detailed estimates for purchase accounting accretion, projecting approximately $59 million for loans in 2025. Jeffrey Jackson, President and CEO, explained that the rise in criticized loans was a normal result of acquiring and marking the Premier portfolio. He reiterated confidence in the company's credit metrics, expecting them to remain better than peers, and noted the portfolio's diversity and limited exposure to specific market risks.

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CEO Jeffrey Jackson and CFO Daniel Weiss confirmed the mid-single-digit loan growth guidance is a net figure that accounts for higher payoffs. They affirmed that excess deposits would be used to pay down FHLB borrowings, which positively impacts NIM. Jackson attributed the uptick in NPLs to normal fluctuations and one specific credit, stating there are no concerning trends.

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CFO Daniel Weiss explained that the primary drivers for Q4 margin improvement are recent deposit growth enabling FHLB paydowns and the recent capital raise. CEO Jeffrey Jackson addressed credit, stating he expects quality to remain stable and within the range of recent quarters, noting the increase in criticized loans was broad-based across industries with no single point of concern.

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CFO Douglas Schosser explained that full guidance on remaining cost savings would be provided in January 2026. He noted that the company is still finalizing purchase accounting marks, preventing a precise update on margin accretion, but did provide a Q4 net interest income target. Schosser also mentioned that the lower-than-expected equity consideration for the deal would likely result in less goodwill and slightly lower earnings accretion from interest rate marks.

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CFO Douglas Schosser stated that the core margin ended Q1 at 3.48% and is expected to perform at or above the high end of the guided range. He noted that their forecast includes one to two Fed rate cuts and that updated guidance reflecting the Penns Woods acquisition will be provided in Q2. Schosser explained that deposit growth was driven by a strategy to move maturing CDs into more liquid money market products, with new money market accounts opening at rates around 3.75%.

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Chief Financial Officer Douglas Schosser noted decent commercial pipeline strength and plans for additional hiring in commercial verticals, while also maintaining a balanced approach to pursue profitable consumer loan opportunities. He emphasized a focus on pricing discipline over pure volume. President and CEO Louis Torchio added that the bank's strategy is intact, with maturing verticals and a renewed focus on the core franchise expected to build momentum through the year. Regarding the securities book, Schosser confirmed they are reinvesting cash flows into higher-yielding assets and may consider an opportunistic repositioning, but it is not a core strategic focus.

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CFO Douglas Schosser clarified that fee income is expected to rebound by mid-single digits from the Q3 adjusted base, returning to a core level of $29-$30 million. He explained the higher net charge-off guidance reflects a long-term normalization expectation due to the strategic shift toward commercial lending, rather than a near-term credit deterioration.

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Chairman & CEO Christopher Maher explained that while significant near-term funding cost reductions are unlikely without rate cuts, a mix shift towards C&I deposits offers some opportunity. He projected a 'slow and steady' NIM expansion of a few basis points per quarter. President & COO Joseph Lebel added that deposit balances should improve seasonally in Q3 and Q4.

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CEO Christopher Maher projected a 12-18 month payback period for the Premier Bank initiative, with margin improvement overcoming operating expenses in about four to five quarters. He estimated the initiative's loan-to-deposit ratio would be around 20%. CFO Patrick Barrett clarified the 10% expense increase is off a normalized $66 million base, not the reported $64.3 million, suggesting a quarterly run rate of around $70-$71 million going forward.

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CEO Christopher Maher affirmed that while the company values its well-performing and conservatively underwritten CRE portfolio, it believes greater diversification will create a more valuable company. He clarified that the investor CRE portfolio will slowly decrease as C&I grows, but OceanFirst is not exiting the CRE market and continues to originate well-structured and priced loans for its clients.

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CEO Christopher Maher stated that capital is being prioritized for organic growth and to maintain optionality for redeeming repricing debt instruments in May 2025. President Joseph Lebel noted successful deposit repricing with high retention. CFO Patrick Barrett expressed cautious optimism for modest NIM expansion but emphasized that NII has likely troughed and is expected to see steady growth.

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President and CEO Andrew Harmening explained the deposit outflow was a predictable seasonal event, expressing confidence in H2 growth driven by a $500 million commercial deposit pipeline, new technology verticals, and record household growth. EVP & CFO Derek Meyer clarified the higher total deposit guide reflects wholesale funding, not a change in core deposit strategy. Regarding CRE, EVP & Chief Credit Officer Patrick Ahern noted the office portfolio is improving, with proactive clients performing well, stressed credits declining, and a focus on direct sponsor relationships rather than large syndicated deals.

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Executive Andrew Harmening and CFO Derek Meyer confirmed the balance sheet is now highly neutral to rate changes, with a 25 basis point cut having a minimal impact of about $500,000 per quarter. Harmening stated that the best use of capital is funding organic growth and the strategic balance sheet remix, rather than buybacks. Chief Credit Officer Pat Ahern added that the bank has maintained conservative overlays for economic uncertainty for several quarters, providing a strong starting position to handle market changes.

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Chief Credit Officer Pat Ahern clarified that the portfolio deep dives are a constant, ongoing process, not a one-time project. He explained that the observed migration reflects proactive risk rating and noted that the stability in non-accrual loans is a positive indicator. CEO Andrew Harmening added that while the core organic strategy is proven and no further inorganic moves are planned for 2024, the company is now positioned to scale and could opportunistically consider a deal in the next 12-24 months, though the immediate focus is on organic execution.

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CEO Andrew Harmening highlighted the bank's strategic positioning with short-duration funding, including $3.6 billion in 7-month CDs renewing at a 100+ basis point pickup. He noted that reduced asset sensitivity allows the bank to focus on execution. Regarding hiring, Harmening confirmed RM headcount is up 17% and the high-probability deal pipeline is up 18%, expressing confidence in hitting the target of 26 net new RMs and seeing their impact grow through 2025.

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President & CEO Todd Gipple stated that any HUD disruption would likely only slow deal closings and that he is optimistic about bipartisan support for the LIHTC program. EVP & CFO Nick Anderson confirmed QCRH holds about $80 million in B-pieces from prior deals. Gipple added that while they could sell them, the focus is on selling the B-piece in the next securitization. Regarding the $10 billion threshold, Gipple anticipates a manageable $3 million Durbin impact, which they are prepared for and can mitigate with other non-interest income.

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Executive Larry Helling specified the LIHTC uncertainty was tied to tax credit policy and disruptions at federal agencies like HUD, which have started to abate. Executive Todd Gipple confirmed that a rebound in LIHTC production would likely trigger a large securitization (~$350M) to manage concentrations, possibly in Q4 2025 or early 2026. Gipple also explained that the expense guidance would only revert to the higher, prior range of $52-$55 million if revenue and loan growth normalize, as the current lower guidance is a direct result of reduced variable compensation.

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Executive Larry Helling clarified that the M2 portfolio stands at about $340 million, with an expected runoff of approximately $120 million over the next 12 months. Executive Todd Gipple addressed securitizations, explaining the strategic pivot to a single, larger deal of around $350 million in late 2025. He noted this approach is expected to drive better execution and financial results due to improved economics and leverage compared to past smaller deals.

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Executive Todd Gipple emphasized that the company remains highly focused on growing core deposits to further drive down the loan-to-deposit ratio and will not 'take their foot off the gas.' Executive Larry Helling projected crossing the $10 billion asset mark in about two years. He estimated the total Durbin impact at $5-6 million annually in three years but stated the company is proactively managing expenses and revenues to 'power through' the transition, making the impact unnoticeable to investors.

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President & CEO Tyler Wilcox explained that charge-offs are expected to plateau in the second half of the year, highly correlated with the runoff of high-balance accounts. He clarified that the large provision was due to a confluence of factors, including reserves on a specific commercial relationship and a periodic update to CECL loss drivers. Wilcox stated that management believes the provision has peaked and the bank is now appropriately reserved.

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Kathryn Bailey, CFO, explained the fee income guidance reduction was due to softer-than-expected insurance commissions, a decision to hold more mortgage loans on the balance sheet, and market volatility impacting wealth management income. She projected accretion income to be 15-17 basis points in Q2, falling slightly in the second half of the year. Ms. Bailey also noted significant opportunities to reprice the retail CD portfolio downward, as they continue to manage special rates lower. Regarding loan yields, she stated that while there was some compression, spreads remain attractive, particularly in the North Star Leasing portfolio.

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CFO Kathryn Bailey confirmed the NIM guidance includes 15-20 basis points of accretion income and is supported by the ability to lower deposit costs due to a lag in raising them. Executive Tyler Wilcox identified external factors like inflation and interest rate shifts as the primary credit risks, while expressing high confidence in the overall quality of the diversified loan portfolio.

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Tyler Wilcox, an executive, explained that he expects small ticket leasing charge-offs to peak in Q4 2024, with a full-year rate between 5% and 6%, before normalizing in the low-to-mid 4% range. He noted this is in line with historical pricing for the highly profitable business. Wilcox specified that the bank has backed away from titled fleet, over-the-road trucking, garment printers, and has reduced hospitality exposure to focus on core areas like manufacturing and landscaping equipment.

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EVP & CFO Charles Christmas detailed the staggered realization of cost savings, with about 50% expected in 2026 and over 90% in 2027, coinciding with the core conversion. He emphasized the strategic benefit of Eastern Michigan's experience with the Jack Henry system. President & CEO Raymond Reitsma added that they intend to maintain Eastern's high-quality loan book while pursuing growth in mortgage banking and larger commercial loans within the new markets.

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EVP and CFO Charles Christmas clarified the NIM guidance of 3.45% to 3.55% assumes no further rate cuts to provide a clear baseline. He noted that about 90% of CDs mature within a year, re-pricing down by an average of 75 basis points, while new loans are being originated around 7%. President and CEO Raymond Reitsma confirmed that loan spreads have remained stable.

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President and CEO Ray Reitsma confirmed the mid-90% range remains the goal for the loan-to-deposit ratio and that the focus is on deposit-rich clients rather than reining in loan growth. He projected low double-digit deposit growth for the upcoming year. Regarding CRE, Reitsma and EVP & CFO Chuck Christmas explained the mix should remain consistent, with Christmas noting that the construction loan funding pipeline has decreased, which should temper CRE growth.

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EVP and CFO Chuck Christmas explained that new deposit costs were in the high 4% to low 5% range before dropping 50 basis points with the Fed cut. He clarified that significant NIM compression was expected in Q4 due to rapid rate cuts, but the margin should be 'relatively steady' in 2025 assuming a more gradual cutting cycle. Regarding reserves, Christmas noted the level is influenced by qualitative factors, including a specific increased allocation for softness in the C&I portfolio's automotive segment, which was partially offset by the release of reserves from two paid-off problem loans. President and CEO Raymond Reitsma underscored the noted deterioration in the automotive risk profile.

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COO & President Luis Massiani confirmed the sponsor finance pipeline has improved and expects better growth, aided by the Marathon JV. Senior EVP & CFO Neal Holland explained that brokered deposits are used seasonally to manage liquidity and are expected to remain in a comfortable 3-5% range of total deposits.

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CEO John Ciulla explained that the 25-35 bps charge-off range is a base-case assumption and is not directly triangulated with the short-term provision build for a recessionary scenario, which is based on a cumulative life-of-loan CECL model. He stated that if CECL works as intended, temporary spikes in charge-offs shouldn't automatically trigger significant new provisions. Regarding the sponsor book, he noted that outside of health care, it has performed as expected, with very little historical loss, and does not present a unique concern.

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CFO William Holland explained the 30% beta assumption is based on a different operating environment than the previous 0% rate world, with DDA balance trends being a key variable. He affirmed that, given the bank's neutral positioning and current variables, the 3.35%-3.40% range is a good midterm level to consider for the organization's normalized margin.

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CEO John Ciulla projected a credit inflection point in the first half of 2025, driven by falling interest rates, which informs the decision on initiating buybacks in Q4 or H1 2025. He confirmed Q3 loan growth was more "back-ended," providing momentum, and reiterated a focus on C&I growth with residential mortgages used to supplement, maintaining a ~5% annualized growth outlook.

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CFO Richard Kraemer explained that while the expense guidance range of $190M-$195M for Q3/Q4 is maintained, it provides optionality for new initiatives, and results could land below the midpoint. He noted the Q2 increase was partly due to merit raises, which won't repeat. CEO Curtis Myers added that fee income performance was strong across all categories and that hitting the top end of the guidance range depends on continued consistent outperformance without headwinds.

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Chairman and Executive Officer Curtis Myers stated the company is analyzing its granular portfolio, with the most direct tariff risk being commodity price impacts on its $1 billion domestic agricultural portfolio. He noted the portfolio is strong and diversified. Chief Financial Officer Rick Kraemer commented that while reserves are strong, they are influenced by declining loan balances and a more cautious economic forecast, which could add pressure going forward.

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CEO Curtis Myers clarified that the asset growth guidance is for period-end balances and reflects an expectation for a stable credit environment similar to 2024, albeit on a larger balance sheet. CFO Rick Kraemer added that quarterly purchase accounting accretion is expected to be stable around $13.5 million to $14 million and identified mortgage banking, commercial swaps, and wealth management as the fee income areas most sensitive to rate changes.

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CFO Designee Rick Kraemer clarified that the 2025 expense savings would progress steadily, with roughly 45% realized in the first half. Chairman and CEO Curt Myers stated that the bank expects modest, low single-digit loan growth to continue and aims for deposit growth to match, excluding the seasonal Q4 runoff of municipal deposits.

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CEO Frank Sorrentino acknowledged a temporary client pause but sees momentum returning, reaffirming a mid-to-high single-digit growth forecast for the year, supported by a strong NY metro market. CFO William Burns provided specific guidance for 2.5% sequential loan growth in Q2. Regarding regulators, Mr. Sorrentino described the relationship with the FDIC and state authorities as cooperative and 'standard business,' seeing no significant change in their review process.

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CFO Bill Burns clarified that recent CRE growth was largely in owner-occupied and construction loans, and the overall CRE concentration is expected to trend downward. Regarding credit, he stated that while the repricing portfolio is under some stress, it has been 'remarkably sound' and any issues can be absorbed by earnings. Burns explained the anticipated NPL decline is due to active negotiations to sell a specific group of loans that have already been written down.

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CFO Bill Burns explained that the spot NIM was up 10 basis points from the Q3 average, leading to a Q4 NIM projection of 2.80%, assuming one more rate cut. He attributed the Q3 loan yield dip to the impact of the 50 bps rate cut and a large nonaccrual interest recapture in the prior quarter. Burns also clarified that the rise in criticized loans was primarily due to modifications on a single large CRE relationship, which he noted is well-secured and on a path to restoration.

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