In a swift balance sheet repositioning move, OceanFirst Financial Corp. on Monday that its subsidiary, OceanFirst Bank, entered into an agreement to sell $1.4 billion of multifamily loans.
The decision comes just one week after OceanFirst finalized its acquisition of Flushing Financial Corporation on June 1. The massive loan portfolio being sold represents a majority of the multifamily loans OceanFirst inherited through that transaction.
The sale is a deliberate strategy by the Red Bank-based regional bank to mitigate risk in the commercial real estate sector. By offloading the $1.4 billion portfolio, the bank will significantly lower its Commercial Real Estate (CRE) concentration. Most notably, the transaction effectively eliminates the majority of OceanFirst’s exposure to rent-regulated properties located within New York City—a sector that has faced heightened economic and regulatory scrutiny in recent years.
According to the company, the agreed-upon purchase price aligns with the initial valuation estimates disclosed when the Flushing Financial acquisition was first made public.
OceanFirst expects to finalize the loan sales by the end of the second quarter of 2026. The final amount of loans transferred will be adjusted for ongoing prepayments, amortization, and standard closing adjustments.
Looking ahead, OceanFirst plans to pivot the proceeds from the sale into highly liquid, investment-grade securities. The bank noted that these replacement securities are expected to yield average returns similar to the loans being offloaded, effectively neutralizing the impact on overall revenue while drastically improving liquidity.
Founded in 1902, OceanFirst Bank N.A. operates as a $23 billion regional institution, providing commercial and retail financing, treasury management, and deposit services across New Jersey, New York, Long Island, and major metropolitan hubs extending from Massachusetts to Virginia.
Further details regarding the balance sheet restructuring and its impact on the newly combined company will be detailed in OceanFirst’s upcoming second-quarter earnings release and subsequent investor conference call.
