Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Q1 2024 Earnings Presentation
20 slides from Oceanfirst Financial's earnings presentation, Apr 18, 2024
Slide 1: OceanFirst Financial Corp. 1Q 2024 Earnings Release Supplement
. . . 1 The 1Q 2024 Earnings Release Supplement should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on April 18, 2024. Exhibit 99.2 OceanFirst Financial Corp. 1Q 2024 Earnings Release Supplement1 April 2024
Slide 2: Legal Disclaimer
. . .Legal Disclaimer FORWARD LOOKING STATEMENTS. In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strateg
Slide 3: Q1-24 Financial Highlights
. . .Q1-24 Financial Highlights 3 (1) For non-GAAP financial measures, please refer to the ‘Non-GAAP Reconciliations’ in the Appendices for a reconciliation to GAAP financial information. (2) CET1 ratio represents an estimate as of Q1-24. (3) PCD loans are not included in these metrics. Refer to Ass
Slide 4: Quarterly Investor Presentation
. . . I N V E S T O R P R E S E N T A T I O N 4 Quarterly Earnings Update
Slide 5: Loan Portfolio Trends
. . .Loan Portfolio Trends 5 Moderated Loan Growth in the Portfolio ($’millions) ▪ Loan growth has moderated and will likely persist through mid-year with the expectation of low to mid-single digit annualized growth during the second half of the year. ▪ Loan yields continue to improve. 5,297 5,320 5
Slide 6: Credit Quality
. . .Credit Quality Historically Top Quartile and Well Positioned ▪ Underlying collateral is diversified: The underlying collateral for the CRE Investor Owned (“Investor”) portfolio is highly diversified. ▪ Low concentration in the Multi-Family portfolio, which represents 7% of total assets. ▪ Matur
Slide 7: Quarterly Credit Trends (1 of 2)
. . . Strong asset quality trends driven by prudent loan growth and credit decisioning. Quarterly Credit Trends (1 of 2) 7 Non-Performing Loans and Assets ($’000)1 Special Mention and Substandard Loans ($’000) Note: At March 31, 2024, of the Special Mention loans and Substandard loans represented ab
Slide 8: Quarterly Credit Trends (2 of 2)
. . .Quarterly Credit Trends (2 of 2) 8 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans NCOs / (Recoveries) and Provision for Credit Loss Expense ($’000) 0.10% 0.60% Q1-23 0.10% 0.61% Q2-23 0.09% 0.63% Q3-23 0.07% 0.66% Q4-23 Q1-24 0.70% 0.71% 0.72% 0.73% 0.73% 0
Slide 9: Track Record of Strong Credit Performance
. . . COVID-19 Pandemic Track Record of Strong Credit Performance 9 ▪ From 2006 to 2023, inclusive of the Global Financial Crisis, Hurricane Sandy, and the COVID-19 Pandemic, OCFC’s CRE NCO to average CRE loans totaled 7 bps per year compared to 73 bps for all commercial banks between $10 - $50 bill
Slide 10: Deposit Trends
. . .Deposit Trends 10 (1) Deposit beta is calculated as the increase in rate paid on total deposits per quarter divided by the incremental increase in the fed funds rate since January 1, 2022. ▪ Non-maturity deposits decreased by $73 million (or 1%) from the linked quarter. ▪ High yield savings dec
Slide 11: Net Interest Income and Net Interest Margin Trends
. . .Net Interest Income and Net Interest Margin Trends 11 (1) Core NIM excludes purchase accounting and prepayment fee income. Refer to the Earnings Release for additional information. Core NIM1 vs NIM NIM Bridge Q4-23 NIM -0.01 Non-core impacts Q1-24 NIM 2.82% 2.81% 3.34% 3.30% Q1-23 3.02% 2.97% Q
Slide 12: Core Efficiency Ratio: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 12 Core Non-Interest Expense1 ($’000) 7,852 8,629 8,411 7,999 7,761 5,098 5,083 5,258 2,858 2,732 6,154 6,165 6,086 6,430 5,956 1,749 2,465 2,557 2,723 2,717 6,444 6,366 6,638 6,390 6,329 33,920 34,222 35,534 32,126 32,759 Q1-23
Slide 13: Generating Consistent Returns
. . .Generating Consistent Returns 13 Book Value and Tangible Book Value per Common Share ($)1, 2 Core ROAA1, ROTE1, and ROTCE1 • Tangible book value per common share increased by $1.21 (or 7%) compared to the same quarter last year. • Capital remains strong and above “well capitalized” levels. • Re
Slide 14: Management 2024 Outlook
. . .Management 2024 Outlook 14 Loans Deposits Operating Expenses Net Interest Margin Capital • Continued focus on credit risk management, anchored by our diversified CRE portfolio that has performed well in market downturns. • Loan growth has moderated and will likely persist through mid-year with
Slide 15: Appendix
. . . I N V E S T O R P R E S E N T A T I O N 15 Appendix
Slide 16: CBD Office Concentration Exposure Is Moderate
. . .CBD Office Concentration Exposure Is Moderate 16 CBD Office Portfolio by Geography 13% 35% 34% 18% NY NJ MA PA CBD Proportion of Total Assets 99% 1% CBD Non-CBD Office Loan Classifications 96% 4% Criticized & Classified Non Criticized & Classified Central business district (CBD) loans have a we
Slide 17: Northeast Outperforms Through Credit Cycles
. . . Hurricane Sandy Global Financial Crisis COVID-19 Pandemic Northeast Outperforms Through Credit Cycles… 17 ▪ Historically, net charge-offs for Northeastern headquartered banks have greatly outperformed major exchange traded U.S. banks headquartered in other regions ▪ Median net charge-offs / av
Slide 18: Similar Story in Commercial Real Estate Portfolios
. . . Hurricane Sandy Global Financial Crisis COVID-19 Pandemic …With a Similar Story in Commercial Real Estate Portfolios 18 ▪ Northeastern banks’ CRE portfolio net charge-offs have also historically outperformed major exchange traded banks in other regions ▪ Median CRE net charge-offs / average as
Slide 19: Non-GAAP Reconciliations (1 of 2)
. . .Non-GAAP Reconciliations (1 of 2) (1) The sale of specific positions in two financial institutions impacted both equity investments and debt securities for the three months ended March 31, 2023. On the Consolidated Statements of Income, the losses on sale of equity investments and debt securiti
Slide 20: Non-GAAP Reconciliations (2 of 2)
. . .Non-GAAP Reconciliations (2 of 2) Non-GAAP Reconciliation $'000 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Tangible Equity Total stockholders' equity 1,665,837 1,661,945 1,637,604 1,626,283 1,610,371 Less: Goodw ill 506,146 506,146 506,146 506,146 506,146 C