Participation in workplace mortgage journeys up New Jersey financial institution
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OceanFirst Financial Corp. in Red Bank, New Jersey, stated it expects to report elevated third-quarter charge-offs linked to its participation in a mortgage secured by a Manhattan workplace constructing.
The $13.6 billion-asset OceanFirst acknowledged Thursday in a present occasions submitting with the Securities and Exchange Commission that mortgage losses linked to the Manhattan workplace credit score would complete between 45% and 50% of its $17 million complete publicity. For the second quarter, the corporate reported $123,000 of charge-offs.
OceantFirst’s announcement got here only a day after First Horizon Corp. in Memphis, Tennessee, and the Greenville, South Carolina-based United Community Banks revealed they’d report substantial third-quarter charge-offs tied to their participation in a $218.5 million mortgage to an oil distribution firm. The $26.1 billion-asset UCBI expects to write down off about $19 million, whereas First Horizon’s losses might complete $70 million.
Office loans are rising as a specific space of concern for banks, regulators and traders. The Federal Deposit Insurance Corp. underscored considerations in regards to the workplace market in its most up-to-date danger evaluation, whereas a number of banks have moved to improve reserves or curtail lending to the sector.
In its 8-Okay submitting, OceanFirst acknowledged the Manhattan workplace mortgage quantities to about 17% of the corporate’s $130 million portfolio of central enterprise district workplace loans. OceanFirst added it’s “continually evaluating” them and “currently is not aware of other material losses within this portfolio.”
David Bishop, who covers OceanFirst for Hovde, characterised the charge-off as “more a specific borrower related issue rather than a systemic issue with the overall CRE portfolio.” Janney Montgomery Scott Analyst Chris Marinac reached an analogous conclusion noting Friday in a analysis be aware that OceanFirst’s total ratio of criticized loans to loans, at 1.18%, is decrease than most friends.
Marinac reiterated his “buy” score on OceanFirst. Bishop rated the corporate’s shares at “outperform.”
OceanFirst shares had been buying and selling at $16.09 Friday afternoon, down 1.44%.
