OceanFirst Financial (OCFC) - 2024 Q4 - Annual Report

Credit Losses and Allowances - The Bank's loan allowance for credit losses (ACL) as a percentage of total loans increased to 0.73% in 2024 from 0.66% in 2023[76] - The total charge-offs for 2024 were $2.22 million, a decrease from$8.69 million in 2023[77] - The provision for credit losses for 2024 was $5.48 million, down from$18.70 million in 2023[77] - The net charge-offs for 2024 were $1.56 million, compared to$8.38 million in 2023, reflecting improved credit quality[78] - The Bank's total ACL at the end of 2024 was $73.61 million, up from$67.14 million in 2023[79] - The commercial real estate - investor category accounted for 41.8% of the total ACL in 2024, with an amount of $30.78 million[79] Loans and Deposits - The average net loans outstanding during 2024 were$10.02 billion, slightly up from $10.01 billion in 2023[78] - Total deposits decreased by$368.6 million to $10.07 billion at December 31, 2024, from$10.43 billion in the prior year, primarily due to a planned runoff of brokered time deposits[90] - The Bank's total uninsured deposits increased to $5.75 billion at December 31, 2024, compared to$5.32 billion in 2023, with adjusted uninsured deposits representing 16.5% of total deposits[91] - The Bank's average deposits for the year ended December 31, 2024, were $10.26 billion, with an average interest rate of 2.36$250,000 or more totaled $457.2 million, with a weighted average rate of 4.47$1.89 billion at December 31, 2024, with a weighted average yield of 4.11%[86] - The Bank's investment in FHLB New York stock was $68.4 million and$53.7 million at December 31, 2024 and 2023, respectively[164] - The Bank's total investment in Federal Reserve Bank of Philadelphia stock was $39.8 million and$39.7 million at December 31, 2024 and 2023, respectively[165] - The Federal Reserve Bank of Philadelphia paid dividends totaling $1.7 million for the year ended December 31, 2024, compared to$1.6 million in the prior year[166] Capital and Regulatory Compliance - The Company exceeded all regulatory capital requirements as of December 31, 2024, with Tier 1 capital to average assets at 9.50% compared to the required 4.00%[126] - Common equity Tier 1 capital to risk-weighted assets was reported at 11.17%, exceeding the required 7.00%[126] - Total capital to risk-weighted assets stood at 14.52%, surpassing the required 10.50%[126] - As of December 31, 2024, the Bank's Tier 1 capital to average assets ratio was 8.99%, exceeding the required 4.00%[142] - The Common Equity Tier 1 capital to risk-weighted assets ratio was 11.83%, surpassing the required 7.00%[142] - Total capital to risk-weighted assets ratio stood at 12.61%, above the required 10.50%[142] - The Bank was in compliance with the loans-to-one borrower limitations as of December 31, 2024[153] - The Bank and the Company are in compliance with the capital conservation buffer requirements[140] - The Bank's capital position indicates it satisfies the criteria to be classified as well-capitalized[147] - The Bank's management is not aware of any practices that could lead to the termination of deposit insurance[151] - The Bank's capital distribution may be restricted if it falls below regulatory requirements, impacting its ability to pay dividends or repurchase stock[155] Acquisitions and Growth - The Company completed the acquisition of Spring Garden on October 1, 2024, for a total consideration of $162.7 million, enhancing its specialty finance offerings[97] - The Company has made several acquisitions, including Spring Garden Capital Group, LLC, to expand its specialty finance offerings[102] - The Company will continue to evaluate potential acquisition opportunities to further create stockholder value[98] Employee and Community Engagement - As of December 31, 2024, the Bank had a total of 1,031 employees, with approximately 67$625 million in loans and investments benefiting communities it serves[163] - The Bank committed to invest at least $14 million in a mortgage loan subsidy fund over five years as part of settlement agreements with the DOJ and HUD[162] Operating Expenses and Assessments - The Bank incurred total deposit insurance assessment expenses of$9.7 million in 2024, slightly down from $9.9 million in 2023[152] - A special assessment of$418,000 was incurred in 2024 due to the FDIC's final rule, compared to $1.7 million in 2023[152] - The Bank paid OCC assessments totaling$1.3 million and $1.2 million for the years ended December 31, 2024 and 2023, respectively[156] - The FDIC's risk-based assessment system charges lower premiums to institutions deemed less risky, impacting the Bank's operating expenses[148] Performance and Evaluation - The Bank received a CRA Performance Evaluation rating of "Outstanding" for the evaluation period from 2021 to 2023[160] - The Company was in compliance with Board guidelines for interest rate risk sensitivity scenarios as of December 31, 2024 and 2023[377] - The measure of Economic Value of Equity (EVE) at risk decreased in all rate scenarios from December 31, 2023 to December 31, 2024[379]