'It’s future positioning:' OceanFirst acquires Cherry Hill mortgage firm, preps for rate cuts

August 6, 2024

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OceanFirst Bank has increased its mortgage loan officer headcount by more than 60% with the acquisition of Cherry Hill-based Garden State Home Loans.

Financial terms of the deal were not disclosed.

Stephen Adamo, who joined OceanFirst in March 2023 as president of residential and consumer lending, said the Toms River-based regional bank is investing its residential mortgage business despite many of its competitors backing away due to the high-interest rate environment. The theory is when rates do drop, OceanFirst will be able to take advantage of a spike in mortgage originations and refinancings.

“For us, it’s future positioning,” Adamo said. “I think we could agree that rates probably aren't going up. And if that's the case, then now is a good time to invest in this for when think rates will come down. Housing has a lot of pent-up demand, and we'll be able to harness much of that pent-up demand.”

Garden State Home Loans was founded in 2011 as a direct-to-consumer business that added a retail element. Adamo said the firm originates loans but does not keep them on a balance sheet. It is licensed to serve 14 states but by being part of OceanFirst, it can now lend in all 50 states.

Adamo declined to speak about how OceanFirst connected with Garden State or specifics about the transaction. Through the deal, he said the bank adds a direct-to-consumer channel to OceanFirst’s retail lending focus.

“We have retail people that are feet on the street — supporting our branch network, working with the Realtors, builders, nonprofit associations, neighborhood groups and so on,” Adamo said. “[Garden State has] some of that, but the lion's share of their business is focused on direct to consumer, which is a centralized sales platform that's working on leads in the market, instead of actually putting feet into the markets.”

OceanFirst said Garden State’s offices at 2091 Springdale Road in Cherry Hill will remain open and the firm will now be known as Garden State Home Loans, a Division of OceanFirst Bank.

Adamo said all 42 employees will be joining OceanFirst, including its 19 loan officers. Combined with OceanFirst’s 32 loan officers, the bank increased its headcount by 60%.

“The lion’s share of their business comes out of New Jersey, and they’ve done nice work with the investors they have loans to,” Adamo said. “They have a solid reputation and it does give us a faster way to enter into a broader market.”

OceanFirst is a subsidiary of $13.3 billion-asset OceanFirst Financial Corp. (NASDAQ: OCFC), which had a little more than $3 billion in consumer loans as of June 30.

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