Loan and Credit Losses - The Bank's loan allowance for credit losses (ACL) as a percentage of total loans increased to 0.66% in 2023 from 0.57% in 2022[70] - The net charge-offs for the year ended December 31, 2023, amounted to $8.4 million, primarily related to one commercial real estate relationship[72] - The total ACL at the end of 2023 was $67.1 million, up from $56.8 million in 2022[74] - The provision for credit losses for 2023 was $18.7 million, compared to $7.6 million in 2022[72] - The ACL for commercial real estate loans was $32.3 million, representing 48.04% of total ACL as of December 31, 2023[74] Loans and Deposits - The Bank's average net loans outstanding during 2023 were $10,016.9 million, an increase from $9,323.6 million in 2022[73] - The Company's deposits increased by $759.7 million to $10.43 billion at December 31, 2023, compared to $9.68 billion in the prior year[85] - Total uninsured deposits were $5.32 billion at December 31, 2023, representing 15.2% of total deposits, down from 19.6% in the prior year[86] - The average balance of time deposits was $2.44 billion, with an average rate of 3.74%[87] Interest Rates and Securities - The weighted average yield on total debt securities was 4.40% as of December 31, 2023[81] - The total debt securities held by the Bank amounted to $1,940.9 million as of December 31, 2023[81] - The average rate paid on total deposits increased to 1.68% in 2023 from 0.31% in 2022[87] Capital and Regulatory Compliance - As of December 31, 2023, the Company exceeded all regulatory capital requirements, with Tier 1 capital to average assets at 9.31%, compared to the required 4.00%[123] - The Company reported a Common Equity Tier 1 capital ratio of 10.86%, exceeding the required 7.00%[123] - The total capital to risk-weighted assets ratio was 14.10%, above the required 10.50%[123] - The Bank satisfies the criteria to be classified as well-capitalized as of December 31, 2023[145] CRA Evaluation and Compliance - The Bank's CRA Performance Evaluation resulted in a rating of "Needs to Improve," which may restrict certain expansionary activities, including mergers and acquisitions[157] - The Bank's management is committed to addressing deficiencies cited in the CRA evaluation by enhancing compliance staff and implementing corrective actions[157] - The next CRA examination is expected to commence in 2024, covering the evaluation period from 2021 to 2023[159] Employee Diversity and Workforce - As of December 31, 2023, the Bank had 920 employees, with 67% being female and 20% being persons of color[98][103] - The Company is committed to diversity, with 20% of employees being persons of color and 61% of managers being female[103] Financial Performance and Risk Management - The Bank incurred total deposit insurance assessment expenses of $9.9 million in 2023, up from $5.9 million in 2022, primarily due to a special assessment of $1.7 million related to the protection of uninsured depositors[149] - The Company experienced a 12.8% decrease in Economic Value of Equity (EVE) under a 300 basis point interest rate increase scenario as of December 31, 2023[389] - The net interest income sensitivity results indicated that the Company was modestly asset sensitive to falling rates as of December 31, 2023[389] - The Company actively manages interest rate risk through various strategies, including the use of interest rate swaps and managing the investment portfolio[384] Acquisitions and Investments - The Company completed the acquisition of 60% of Trident Abstract Title Agency, LLC for $7.1 million, enhancing its service offerings[93] - The Bank's investment in FHLB New York stock was $53.7 million as of December 31, 2023, down from $69.4 million in 2022[161] - The Bank's total investment in Federal Reserve Bank of Philadelphia stock was $39.7 million at December 31, 2023, compared to $39.5 million in 2022[163] - Dividends received from the Federal Reserve Bank of Philadelphia for 2023 totaled $1.6 million, an increase from $1.3 million in the prior year[165]
OCEANFIRST FINL(OCFCP) - 2023 Q4 - Annual Report