Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (July 2018)
33 slides from Oceanfirst Financial's investor presentation, Jul 30, 2018
Slide 1: OceanFirst Financial Corp. Investor Presentation August 2018
. . . OceanFirst Financial Corp. Investor Presentation August 2018
Slide 2: Forward Looking Statements
I N V E S T O R P R E S E N T A T I O N . . . Forward Looking Statements In addition to historical information, this presentation 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
Slide 3: About OceanFirst Financial Corp.
. . . About OceanFirst Financial Corp. 3
Slide 4: OceanFirst Financial Corp.
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $1.5 billion1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Asset Value of $7.7 billion • 59 Full-Service Branches in Central and Southern New Jersey Headquarters OceanFir
Slide 5: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 35 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sh
Slide 6: Commitment to Execution
I N V E S T O R P R E S E N T A T I O N . . . Commitment to Execution Our Recent Accomplishments... …Lead to Our Path Forward • Four Acquisitions in Three Years • Local to Regional Scale • Consolidated 33 Branches in the • Increased Investment in Direct Last Two Years with Nominal Banking & Digital
Slide 7: Our Business
(@) OceanFirst Our Business. 0e06
Slide 8: Second Quarter 2018 Highlights
I N V E S T O R P R E S E N T A T I O N . . . Second Quarter 2018 Highlights Financial Highlights Operational Highlights • Core Net Income of $22.4 million • Acquisition of Sun Bancorp, Inc. • Up 69% y/y completed on January 31, 2018 with • Core Diluted EPS of $0.46 full integration completed in Q2
Slide 9: Net Interest Margin
I N V E S T O R P R E S E N T A T I O N . . . Net Interest Margin Operational Highlights Net Interest Margin (1) 3.80 • Cost of deposits increased only 3.73 2 bps from 1Q18 to 2Q18 3.70 3.60 • Non-interest bearing deposits 3.50 are 21% of total deposits 3.40 3.43 • Balanced interest rate risk 3.30 P
Slide 10: Deposit Growth with Branch Consolidation
I N V E S T O R P R E S E N T A T I O N . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch Strength and Durability of Low-Cost 7,000 150 Deposit Position AverageDeposits Per Branch ($ Millions) Target average branch size above 130 • 6,000 $100 million 110 • Deploying Video Tell
Slide 11: Loan Composition Emphasizes Commercial
I N V E S T O R P R E S E N T A T I O N . . . Loan Composition Emphasizes Commercial Total Loans Outstanding Loans by Customer Segment - 2018 2014* 2015* 44% 2016* 56% 2017* 2018** Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 (in millions) Residential Home Equ
Slide 12: Conservative CRE Portfolio Reflects Strategic Execution
I N V E S T O R P R E S E N T A T I O N . . . Conservative CRE Portfolio Reflects Strategic Execution CRE to Total Risk Based Capital 0 100 200 300 400 500 600 700 800 900 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Capacity to grow Investor Peer 6 Peer 7 CRE by $299 million while Peer 8 remaining under 300%
Slide 13: Generating Consistent & Attractive Returns
I N V E S T O R P R E S E N T A T I O N . . . Generating Consistent & Attractive Returns 15.0% 1.50% 1.45% 14.0% 1.40% 13.0% 1.35% 1.30% Return on Assets 12.0% 1.25% 1.20% 11.0% 1.15% 10.0% 1.10% 1.05% 9.0% 1.00% 0.95% 8.0% Return on Tangible Common Equity on Tangible Return 0.90% 7.0% 0.85% 1 1 1 2
Slide 14: Credit Metrics Reflect Conservative Culture
I N V E S T O R P R E S E N T A T I O N . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.15%(1) 0.07% 0.15% 0.10% 0.04% (Annualized) 1.20% 1.06% 1.00% 0.91% 0.80% 0.60% 0.52% 0.40% 0.35% 0.33% 0.20% Performing Loans as P
Slide 15: Our Strategy
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Slide 16: Asset Growth Supplemented by Strategic M&A
I N V E S T O R P R E S E N T A T I O N . . . Asset Growth Supplemented by Strategic M&A Opportunistic Acquisitions of Local Community Banks Target Closing Date Transaction Value Total Assets Colonial American Bank July 31, 2015 $ 12 million $ 142 million Cape Bancorp May 2, 2016 $196 million $1,518
Slide 17: New Jersey Expansion Opportunities
I N V E S T O R P R E S E N T A T I O N . . . New Jersey Expansion Opportunities • New Jersey is a strong market (1) • Population of 8.9 million • Most densely populated state • 11th most populous state • Median household income of $72,000 • Significant opportunities for acquisitions to build custom
Slide 18: Regional Opportunities for M&A
I N V E S T O R P R E S E N T A T I O N . . . Regional Opportunities for M&A Philadelphia Area New York City Metro Area • 8 Banks with Assets Between $400M and $1B • 9 Banks with Assets Between $400M and $1B • 13 Banks with Assets Between $1B and $10B • 12 Banks with Assets Between $1B and $10B New
Slide 19: Data Driven Digital Strategy
I N V E S T O R P R E S E N T A T I O N . . . Data Driven Digital Strategy Mobile Apps Retail Online 90-Day Active Banking Digital Services Up 52% y/y Registration • Online Banking, Mobile & Tablet Apps Up 37% y/y • Biometric ID verification • Remote Check Deposit • Bill Pay Monthly Bills Mobile Dep
Slide 20: Protecting Our Clients with Cyber Security
I N V E S T O R P R E S E N T A T I O N . . . Protecting Our Clients with Cyber Security • Remains current with evolving industry-wide standards • Real-time analytical tools in place for fraud protection and firewall security • Use of top tier, neural-based, real-time debit card fraud analytics • Qu
Slide 21: Strategic Capital Allocation Generates Shareholder Returns
I N V E S T O R P R E S E N T A T I O N . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders • Stable & competitive dividend $30 • 86th consecutive quarter $25 • Historical Payout Ratio of 30% to 40% $20 • 1.8 million shares available for repurchase $15 c
Slide 22: An Experienced Management Team
I N V E S T O R P R E S E N T A T I O N . . . An Experienced Management Team Years at Executive Title Selected Experience OceanFirst Chairman, President, Patriot National Bancorp Christopher D. Maher 5 Chief Executive Officer Dime Community Bancshares Executive Vice President, Michael J. Fitzpatrick
Slide 23: OceanFirst Foundation: Serving Our Communities
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Foundation: Serving Our Communities • Over $36 million has been granted to organizations serving OceanFirst’s market • Provided $500,000 in grants dedicated to assisting our neighbors after Superstorm Sandy devastated the Jersey Shore in 2012
Slide 24: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 35 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sh
Slide 25: Investor Relations Inquiries
. . . Investor Relations Inquiries Jill A. Hewitt Senior Vice President, Director of Investor Relations & Corporate Communications jhewitt@oceanfirst.com (732) 240-4500, ext. 7513 25
Slide 26: Appendix
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Slide 27: Colonial American Bank Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Colonial American Bank Acquisition • 100% Stock deal, valued at $11.9 million • In-Market acquisition supports growth objective in towns of Middletown and Shrewsbury, NJ Supports Retail • Favorable financial terms (adjusted for DTA realization Expansion
Slide 28: Cape Bancorp Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Cape Bancorp Acquisition • 85% stock and 15% cash, valued at $196 million • Favorable financial terms (1) • Price/Tangible Book Value of 139% • Price/Core Deposit Premium of 4.4% • Expected accretion to GAAP EPS of 17% in 2017 • Expected tangible book va
Slide 29: Ocean Shore Holding Co. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Ocean Shore Holding Co. Acquisition • Reinforces OceanFirst as the preeminent New Jersey based community banking franchise operating throughout central and southern New Jersey • 80% stock and 20% cash, valued at $181 million • Favorable financial terms(1
Slide 30: Sun Bancorp, Inc. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Sun Bancorp, Inc. Acquisition • Strengthens and expands OceanFirst franchise into more demographically attractive Central New Jersey, Philadelphia and New York city metro markets • 85% stock and 15% cash, valued at $475 million • Favorable financial term
Slide 31: OceanFirst Milestones – Years of Growth
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Milestones – 116 Years of Growth IPO to Mutual Depositors Created OceanFirst Colonial American Foundation Bank Acquired Established Commercial LPO Founded, Established Adopted National Trust and Asset Expansion into Point Pleasant, NJ Commerci
Slide 32: Favorable Competitive Position
I N V E S T O R P R E S E N T A T I O N . . . Favorable Competitive Position Central & Southern NJ Mega Banks OceanFirst Bank Community Banks # of Branches Dep. In Mkt. # of Dep. In Mkt. Dep. In Mkt. Institution ($000) Institution # of Branches Branches ($000) ($000) 59 5,868,955 TD Bank (Canada) 12
Slide 33: Commercial Portfolio Segmentation
I N V E S T O R P R E S E N T A T I O N . . . Commercial Portfolio Segmentation Total Commercial Loan Exposure by Real Estate Investment by Property Industry Classification Classification Professional Transportation & Public Office Scientific & Warehousing Administration Miscellaneous Miscellaneous
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