Oceanfirst Financial Corp. · NASDAQ:OCFC

Oceanfirst Financial — Investor Presentation (October 2019)

41 slides from Oceanfirst Financial's investor presentation, Oct 28, 2019

  1. Slide 1: OceanFirst Financial Corp. Investor Presentation October 2019

    . . . Exhibit 99.1 OceanFirst Financial Corp. Investor Presentation October 2019

  2. Slide 2: Forward Looking Statements

    INVESTOR PRESENTATION . . . 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 future plans, str

  3. Slide 3: About OceanFirst Financial Corp.

    . . . About OceanFirst Financial Corp. 3

  4. Slide 4: OceanFirst Financial Corp.

    INVESTOR PRESENTATION . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $1.3 billion 1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Total Assets of $8.1 billion • 56 Full-Service Branches in Central and Southern New Jersey Headquarters OceanFirst Bank Branches

  5. Slide 5: Investment Thesis

    INVESTOR PRESENTATION . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 62 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sheet underpins flex

  6. Slide 6: Commitment to Execution

    INVESTOR PRESENTATION . . . Commitment to Execution Our Recent Accomplishments... …Lead to Our Path Forward • Five Acquisitions Closed in Four Years • Local to Regional Scale • Announced Merger Agreements with • Increased Investment in Direct Banking & Two River Bancorp (NASDAQ: TRCB) & Digital Enga

  7. Slide 7: Overview of Two River Bancorp

    INVESTOR PRESENTATION . . . Overview of Two River Bancorp • $1.2 billion asset commercial bank founded in 2000 serving consumers and businesses in Northern New Jersey • 14 branch locations and 2 loan production offices in Monmouth, Ocean, Union and Essex Counties • Operates a relationship-based comm

  8. Slide 8: Overview of Country Bank Holding Company, Inc.

    INVESTOR PRESENTATION . . . Overview of Country Bank Holding Company, Inc. • Founded in 1988, Country Bank is a $783 million asset full-service commercial bank • Network of five branches that spans from Midtown Manhattan to Scarsdale, NY • Focus on small business, commercial real estate and multi-fa

  9. Slide 9: Combined Highlights

    INVESTOR PRESENTATION . . . Combined Highlights Strategically • Acquisitions of two high-performing franchises Compelling • Two River ROAA and ROATCE of 1.06% and 12.0%, respectively1 • Country Bank ROAA and ROATCE of 1.27% and 15.1%, respectively1 • Positioned to cross $10B asset threshold • Natura

  10. Slide 10: Estimated CECL Impact to 9/30/19 Balance Sheet

    INVESTOR PRESENTATION . . . Estimated CECL Impact to 9/30/19 Balance Sheet1 $60 Unamortized credit mark on acquired loans remains and $50 accreted over the remaining life $40 $24.3 $30 $10.0 ($ ($ Millions) $20 $8.4 $8.4 CECL Model $35.1 $25.1 $10 $16.7 $16.7 $0 9/30/19 Reported 9/30/19 CECL ALLL (G

  11. Slide 11: Our Business

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  12. Slide 12: Third Quarter 2019 Highlights

    INVESTOR PRESENTATION . . . Third Quarter 2019 Highlights Financial Highlights 2019 Operational Highlights • Core Net Income of $27.5 • Acquisition of Capital Bank of New • Up 7% y/y Jersey (Capital Bank) completed on • Core Diluted EPS of $0.54 January 31, 2019 with full integration • Up 2% y/y com

  13. Slide 13: Net Interest Margin

    INVESTOR PRESENTATION . . . Net Interest Margin Operational Highlights Net Interest Margin 2 4.50 • Cost of deposits remained flat 4.00 from 2Q19 to 3Q19 3.72 3.50 3.45 • Non-interest bearing deposits 3.00 are 22% of average balance of 2.50 2.40 total deposits 1 2.00 Percentage • Balanced interest r

  14. Slide 14: Effective Interest Rate Risk Management

    INVESTOR PRESENTATION . . . Effective Interest Rate Risk Management Duration 5.0 All asset categories managed with limited duration 4.0 3.0 Years 2.0 1.0 0.0 Securities Mortgage Loans Consumer Loans Commercial Loans Total Assets FHLB Term Time Deposits (Weighted Average) Borrowings Rate Characterist

  15. Slide 15: Deposit Growth with Branch Consolidation

    INVESTOR PRESENTATION . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch 7,000 125 Average Per Deposits Branch Millions) ($ 6,000 Strength and Durability of Low-Cost 100 Deposit Position 5,000 • Target average branch size above 75 $100 million 4,000 • Cost of deposits increased

  16. Slide 16: Loan Composition Emphasizes Commercial

    INVESTOR PRESENTATION . . . Loan Composition Emphasizes Commercial Total Loans Outstanding Loans by Customer Segment – 2019** 2015* 2016* 44% 2017* 56% 2018* 2019** Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 (in millions) Residential Home Equity & Con

  17. Slide 17: Conservative CRE Portfolio Reflects Strategic Execution

    INVESTOR PRESENTATION . . . Conservative CRE Portfolio Reflects Strategic Execution CRE to Total Risk Based Capital 0 100 200 300 400 500 600 700 800 Peer 1 Peer 2 Peer 3 Peer 4 Capacity to grow Investor Peer 5 CRE by $390 million while Peer 6 Peer 7 remaining under 300% Peer 8 OCFC 251 → OceanFirst

  18. Slide 18: Generating Consistent & Attractive Returns

    INVESTOR PRESENTATION . . . Generating Consistent & Attractive Returns 16.0% 1.50% 1.35% 14.0% 1.20% 12.0% 1.05% Return Assetson 10.0% 0.90% 8.0% 0.75% 0.60% 6.0% 0.45% 4.0% 0.30% Return on Tangible Equity Common onTangible Return 2.0% 0.15% 0.0% 0.00% 2015 2016 1 2017 1 2018 1 2019 1, 2 Core Return

  19. Slide 19: Credit Metrics Reflect Conservative Culture

    INVESTOR PRESENTATION . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.07% 0.15% 0.10% 0.05% 0.03% (Annualized) 1.00% 0.91% 0.90% 0.80% 0.70% 0.60% 0.52% 0.50% 0.40% 0.35% 0.29% 0.31% 0.30% 0.20% Performing Loans as Perc

  20. Slide 20: Our Strategy

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  21. Slide 21: Asset Growth Supplemented by Strategic M&A

    INVESTOR PRESENTATION . . . 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 million Ocean S

  22. Slide 22: New Jersey Expansion Opportunities

    INVESTOR PRESENTATION . . . New Jersey Expansion Opportunities • New Jersey is an attractive market 1 • Statewide Total 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 custo

  23. Slide 23: Regional Opportunities for M&A

    INVESTOR PRESENTATION . . . Regional Opportunities for M&A Philadelphia Area New York City Metro Area • 7 Banks with Assets Between $400M and $1B • 7 Banks with Assets Between $400M and $1B • 9 Banks with Assets Between $1B and $10B • 6 Banks with Assets Between $1B and $10B New Jersey • 17 Banks wi

  24. Slide 24: Data Driven Digital Strategy

    INVESTOR PRESENTATION . . . Data Driven Digital Strategy Mobile Apps Online Banking Digital Services 90-Day Active 90-Day Active • Online Banking, Mobile & Tablet Apps Up 22% y/y Up 11% y/y • Biometric ID verification • Remote Check Deposit • Bill Pay Monthly Bills • Pop Money (P2P) Mobile Deposits

  25. Slide 25: Organic Digital Banking Initiatives

    INVESTOR PRESENTATION . . . Organic Digital Banking Initiatives • • Hybrid robo-advisor product offered by Spending (checking) account designed for digitally focused customers our partner RIA, NestEgg • Features aligned with Best-In-Class products • Replaced prior third-party broker/dealer offered b

  26. Slide 26: Treasury Management Services

    INVESTOR PRESENTATION . . . Treasury Management Services Treasury Management Solutions: • ACH Origination, Receipts, Addenda Accounts1 Balances1 Reporting and Debit Blocking • Accept Multiple Forms of Payment Over 33,0002 Over $2.6 billion2 • Account Analysis Statements • Business Online Banking • C

  27. Slide 27: Protecting Our Clients with Cyber Security

    INVESTOR PRESENTATION . . . 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 • Qualified, certified

  28. Slide 28: Strategic Capital Allocation Generates Shareholder Returns

    INVESTOR PRESENTATION . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders $60 $55 • Stable & competitive dividend $50 st $45 • 91 consecutive quarter Annualized $40 • Historical Payout Ratio of 30% to 40% $35 $30 • Repurchased 786,567 shares YTD $25 2019

  29. Slide 29: An Experienced Management Team

    INVESTOR PRESENTATION . . . An Experienced Management Team Years at Executive Title Selected Experience OceanFirst1 Chairman, President, Patriot National Bancorp Christopher D. Maher 6 Chief Executive Officer Dime Community Bancshares Executive Vice President, Wachovia Bank N.A. Joseph J. Lebel III

  30. Slide 30: OceanFirst Foundation: Serving Our Communities

    INVESTOR PRESENTATION . . . OceanFirst Foundation: Serving Our Communities • Over $39 million has been granted to organizations serving OceanFirst’s market • First foundation established in the country during a mutual conversion to IPO (July 1996) • Completed merger of Cape Foundation into OceanFirs

  31. Slide 31: Investment Thesis

    INVESTOR PRESENTATION . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 62 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sheet underpins flex

  32. Slide 32: 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 32

  33. Slide 33: Appendix

    ae © OceanFirst Appendix ©

  34. Slide 34: Colonial American Bank Acquisition

    INVESTOR PRESENTATION . . . 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 in High of $2.3 mi

  35. Slide 35: Cape Bancorp Acquisition

    INVESTOR PRESENTATION . . . 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 value dilution of 7.2%

  36. Slide 36: Ocean Shore Holding Co. Acquisition

    INVESTOR PRESENTATION . . . 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 20% cash, valued at $146 million • Favorable financial terms 1 • Price/Tangible Book

  37. Slide 37: Sun Bancorp, Inc. Acquisition

    INVESTOR PRESENTATION . . . 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 terms 1 • Price/Tangib

  38. Slide 38: Capital Bank of New Jersey Acquisition

    INVESTOR PRESENTATION . . . Capital Bank of New Jersey Acquisition • Deepens OceanFirst’s market position in Southern NJ and the greater metro Philadelphia area • 100% stock, valued at $77 million • Favorable financial terms 1 • Price/Tangible Book Value of 172% • Price/Core Deposit Premium of 8.1%

  39. Slide 39: OceanFirst Milestones – Years of Growth

    INVESTOR PRESENTATION . . . OceanFirst Milestones – 117 Years of Growth IPO to Mutual Depositors Created OceanFirst Colonial American Adopted National Foundation Bank Acquired Bank Charter Established Commercial LPO Founded, Established Sun Bancorp, Inc. Trust and Asset Expansion into Point Pleasant

  40. Slide 40: Favorable Competitive Position

    INVESTOR PRESENTATION . . . Favorable Competitive Position Community Banks serving Mega Banks OceanFirst Bank Central & Southern NJ # of Branches Dep. In Mkt. # of Dep. In Mkt. Dep. In Mkt. Institution ($000) Institution # of Branches Branches ($000) ($000) 61 6,216,001 TD Bank (Canada) 125 22,671,2

  41. Slide 41: Commercial Portfolio Segmentation

    INVESTOR PRESENTATION . . . Commercial Portfolio Segmentation Total Commercial Loan Exposure by Real Estate Investment by Industry Classification Property Classification Transportation & Motel Miscellaneous Office Manufacturing Warehousing Miscellaneous Commercial2.9% 8.6% 22.9% 2.9% 1.7% 6.2% Devel

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