OceanFirst Financial in Red Bank, N.J., will report higher chargeoffs in the third quarter due to a loan participation.
The $13.5 billion-asset company disclosed in a regulatory filing that it has a $17 million participation in a $98 million credit to a borrower managed by a real estate fund. OceanFirst said it could end up charging off 45% to 50% of the exposure.
The credit, originated in June 2019 and secured by an office building in Midtown Manhattan, matured during the third quarter and was placed on nonaccrual. It will be included in OceanFirst’s nonperforming assets as of Sept. 30.
Any recoveries “cannot be reasonably predicted,” the filing said.
OceanFirst said the credit represents 13% of its $130 million portfolio of loans secured by office buildings located in central business districts.