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, representing 0.02% of average net loans outstanding, compared to $8.38 million or 0.08% in 2023[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]. Deposits and Funding - As of December 31, 2024, total deposits decreased by $368.6 million to $10.07 billion 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 as of 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 rate paid of 2.36%[92]. - The Bank had $1.07 billion in outstanding advances from the FHLB as of December 31, 2024[89]. - The Company pledged $7.43 billion of loans with the FHLB and the FRB to enhance borrowing capacity as of December 31, 2024[94]. - The Bank's time deposits in amounts of $250,000 or more totaled $457.2 million, with a weighted average rate of 4.47%[92]. Acquisitions and Investments - The Company completed the acquisition of Spring Garden on October 1, 2024, for a total consideration of $162.7 million, which included $17.2 million in goodwill[97]. - The Bank's acquisition of Spring Garden Capital Group, LLC on October 1, 2024, aims to expand its specialty finance offerings[103]. - Equity investments held by the Company decreased to $84.1 million as of December 31, 2024, down from $100.2 million in 2023[88]. - The Bank's investment in FHLB New York stock was $68.4 million in 2024, up from $53.7 million in 2023[165]. - The Bank's investment in Federal Reserve Bank of Philadelphia stock was $39.8 million in 2024, slightly up from $39.7 million in 2023[166]. - The Federal Reserve Bank of Philadelphia paid dividends of $1.7 million for 2024, compared to $1.6 million in the prior year[167]. Capital and Regulatory Compliance - At December 31, 2024, the Company exceeded all regulatory capital requirements, with Tier 1 capital to average assets at 9.50%, Common equity Tier 1 to risk-weighted assets at 11.17%, and Total capital to risk-weighted assets at 14.52%[127]. - The Company is required to maintain a capital conservation buffer of 2.50% above the minimum risk-based capital requirements[141]. - The Bank's capital position indicates it is classified as well-capitalized under federal regulations[144]. - The Bank incurred total deposit insurance assessment expenses of $9.7 million in 2024, slightly down from $9.9 million in 2023[153]. - A special assessment of $418,000 was incurred in 2024 due to FDIC regulations, compared to $1.7 million in 2023[153]. - The Bank was in compliance with the loans-to-one borrower limitations as of December 31, 2024[154]. Employee and Talent Management - The Company has a total of 1,031 employees, with approximately 67% being female and an average tenure of over seven years as of December 31, 2024[104]. - The Bank's talent acquisition strategy emphasizes internal promotions and external hires, with a focus on developing talent from within[107]. - The Company maintains competitive total rewards programs, including annual bonuses, stock ownership plans, and health benefits, to attract and retain talent[105]. - The Company is committed to maintaining a workforce that reflects the communities it serves, supported by internship and entry-level development programs[108]. Community Engagement and Performance - The Bank received a CRA Performance Evaluation rating of "Outstanding" for the evaluation period from 2021 to 2023[161]. - 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[163]. - Since 2020, the Bank has provided over $625 million in loans and investments benefiting thousands in the communities it serves[164]. Interest Rate Sensitivity and Economic Value - The Company reported a decrease in Economic Value of Equity (EVE) sensitivity across all interest rate scenarios from December 31, 2023, to December 31, 2024[379]. - The net interest income sensitivity results at December 31, 2024 were modestly asset sensitive to neutral compared to the prior year[378]. - The weighted average cost of non-maturity deposit accounts was 1.64% with an average age of approximately 11 years[376]. Regulatory Changes - The EGRRCPA increased the asset threshold for stress tests from $10 billion to $250 billion, providing regulatory relief to institutions with $10 billion or more in assets[121]. - The Dodd-Frank Act requires a reasonable determination of a borrower's ability to repay mortgage loans, impacting lending practices[119]. - The Bank's assessments paid to the OCC totaled $1.3 million for 2024 and $1.2 million for 2023, with a 2.65% increase in marginal rates for 2025[157]. - The FDIC's special assessment will be collected over an initial eight quarterly assessment periods starting from January 1, 2024[149]. - The Company may face restrictions on capital distributions if it fails to meet regulatory capital requirements[156].
OCEANFIRST FINL(OCFCP) - 2024 Q4 - Annual Report