Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (April 2020)
48 slides from Oceanfirst Financial's investor presentation, Apr 27, 2020
Slide 1: OceanFirst Financial Corp. Investor Presentation April 2020
OceanFirst Financial Corp. Investor Presentation April 2020 Exhibit 99.1
Slide 2: Forward Looking Statements
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, strategies and expectations of
Slide 3: Forward Looking Statements (Continued)
Forward Looking Statements (Continued) This presentation is not an offer to sell securities, nor is it a solicitation of an offer to buy securities in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation o
Slide 4: About OceanFirst Financial Corp.
About OceanFirst Financial Corp.
Slide 5: OceanFirst Financial Corp.
OceanFirst Financial Corp. Nasdaq: OCFC Market Cap: $930 million1 Bank Holding Company with National Bank Subsidiary Founded in 1902 Total Assets of $10.5 billion2 75 Full-Service Branches in New Jersey and Metropolitan New York City³ Investor Presentation Based on closing stock price on April 24, 2
Slide 6: Investment Thesis
Source: The Company’s 10-K for the fiscal year ended December 31, 2019 (the “2019 10-K”) Investment Thesis Organic Growth Including Low-Cost and Durable Deposit Base Cost of deposits is one of the lowest in the state of New Jersey at 61 basis points¹ Strength of Assets Strong and diversified balance
Slide 7: Commitment to Execution
Commitment to Execution Our Recent Accomplishments... Seven acquisitions closed in less than five years, including Two River Bancorp (Nasdaq: TRCB) & Country Bank Holding Company Inc. (OTC PINK: CYHC) closed effective January 1, 2020 Consolidated 40 branches in the last three years with nominal depo
Slide 8: An Experienced Management Team
An Experienced Management Team Executive Title Years at OceanFirst1 Selected Experience Christopher D. Maher Chairman, President, Chief Executive Officer 6 Patriot National Bancorp Dime Community Bancshares Joseph J. Lebel III Executive Vice President, Chief Operating Officer 13 Wachovia Bank N.A. F
Slide 9: OceanFirst Milestones – 118 Years of Growth
Crossed $10 billion threshold Two River Bancorp Acquired OceanFirst Milestones – 118 Years of Growth Investor Presentation Founded in Point Pleasant, NJ Established Trust and Asset Management Colonial American Bank Acquired IPO to Mutual Depositors Branch Expansion into Middlesex County Branch Expan
Slide 10: Our Business
© OceanFinst Our Business e)
Slide 11: Highlights
Investor Presentation 2019 Highlights Financial Highlights¹ Net Income of $88.6 million Core² Net Income of $104.8 million Diluted EPS of $1.75 Core² Diluted EPS of $2.07 Net Interest Margin of 3.62% Strong ROAA of 1.10% and ROATCE² of 11.96% Strong Core ROAA² of 1.30% and Core ROATCE² of 14.16% Rec
Slide 12: Recent Developments: First Quarter 2020
Investor Presentation Recent Developments: First Quarter 2020 Financial Highlights¹ Net Income of $16.5 million, or $0.27 Diluted EPS Core² Net Income of $27.0 million, or $0.45 Core² Diluted EPS Net Interest Margin of 3.52% ROAA of 0.64% and Core ROAA² of 1.05% ROATCE² of 7.50%, and Core ROATCE² of
Slide 13: Net Interest Margin
Investor Presentation Net Interest Margin Operational Highlights Non-interest bearing deposits are 21% of average balance of total deposits1 Balanced interest rate risk position Net Interest Margin² Based on average balance for the year ended December 31, 2019 Financial data as of or for the period
Slide 14: Deposit Growth with Branch Consolidation
Investor Presentation Deposit Growth with Branch Consolidation Strength and Durability of Low-Cost Deposit Position Target average branch size above $100 million Core deposits represent 85%1 of total deposits as of December 31, 2019, an effective hedge against a volatile interest rate environment, w
Slide 15: Deposit Composition
Deposit Composition $7.9 Billion in total deposits as of March 31, 2020 23% non-interest bearing deposit accounts as of March 31, 2020 Low cost of deposits at 0.70% for the quarter ended March 31, 2020 Investor Presentation
Slide 16: Loan Composition Emphasizes Commercial
Investor Presentation Loan Composition Emphasizes Commercial Consumer Commercial Consumer Commercial As of December 31st of each respective year As of March 31, 2020
Slide 17: Commercial Portfolio Segmentation
Commercial Portfolio Segmentation Investor Presentation Diversified portfolio provides protection against industry-specific credit events Total Commercial Loan Exposure by Industry Classification Real Estate Investment by Property Classification Note: As of December 31, 2019
Slide 18: Credit Metrics Reflect Conservative Culture
Investor Presentation Credit Metrics Reflect Conservative Culture Non-Performing Loans as Percent of Total Loans Receivable 0.91% 0.35% 0.31% 0.52% 0.05% 0.15% 0.10% 0.05% NET CHARGE-OFFS 0.29% 0.02% Non-Performing Loans by Source (Percent of Loans Receivable) Pre and post financial crisis, OCFC has
Slide 19: Recent Acquisitions Reflect Credit Culture
Recent Acquisitions Reflect Credit Culture Investor Presentation OceanFirst Financial Corp.¹ Two River Community Bank² Country Bank² As of December 31 of each respective year As of December 31 of each respective year. Reflects bank-level, regulatory financial data, per Call Report
Slide 20: Duration Rate Characteristics
Duration Rate Characteristics All asset categories managed with limited duration Effective Interest Rate Risk Management Investor Presentation 1 Includes overnight advances Note: Data as of December 31, 2019
Slide 21: Interest Rate Sensitivity
Interest Rate Sensitivity Base case assumes static balance sheet as of December 31, 2019 Rate shocks are parallel rate shifts Interest rate risk is mitigated through effective balance sheet management Investor Presentation Source: The 2019 10-K
Slide 22: Non-Interest Income
Non-Interest Income Non-interest income represents 14% of total revenue¹ Investor Presentation Total revenue represents net interest income plus non-interest income for the fiscal year ended December 31, 2019 Source: The 2019 10-K
Slide 23: Investment Portfolio
Investment Portfolio Investor Presentation Source: The 2019 10-K
Slide 24: Liquidity
Liquidity To meet short term liquidity needs, OceanFirst Bank maintains a targeted cash and securities position; has borrowing capacity through a number of wholesale sources including the Federal Home Loan Bank System and the FRB; and maintains lines of credit with correspondent banks. The Bank may
Slide 25: Generating Consistent & Attractive Returns
Investor Presentation Generating Consistent & Attractive Returns Continued focus on improving efficiencies through acquisition synergies and branch consolidations For 2015, 2016, 2017, 2018 and 2019, excludes merger related expenses. For 2016, also excludes Federal Home Loan Bank prepayment fee and
Slide 26: Strong Capital Position
Strong Capital Position Investor Presentation Does not include Two River Community Bank or Country Bank, each acquired on January 1, 2020 This is a non-GAAP financial measure. Please see Appendix for reconciliation of non-GAAP items
Slide 27: Double Leverage & Interest Coverage
Double Leverage & Interest Coverage Investor Presentation As per 10-K filing for each respective year
Slide 28: Our Strategy
© OceanFinst Our Strategy ©
Slide 29: 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 Value¹ Total Assets¹ Colonial American Bank July 31, 2015 ~$12 million $142 million Cape Bancorp May 2, 2016 ~$196 million $1,518 million Ocean Shore H
Slide 30: New Jersey Expansion Opportunities
Headquarters OceanFirst Bank Branches OceanFirst Bank Loan Offices Investor Presentation New Jersey Expansion Opportunities New Jersey is an attractive market Statewide Total Population of 8.9 million Most densely populated state 11th most populous state Median household income of $87,000 Significan
Slide 31: Country Bank Holding Company, Inc. Acquisition
Investor Presentation Country Bank Holding Company, Inc. Acquisition 100% Stock deal, valued at $113 million¹ Expands branch network to support NYC lending efforts Favorable financial terms² Price/Tangible Book Value of 151% Core Deposit Premium of 7.5% Effective execution Announcement – August 9, 2
Slide 32: Two River Bancorp Acquisition
Investor Presentation Two River Bancorp Acquisition 75% stock and 25% cash, valued at $197 million¹ Strengthens presence in Monmouth County and expands market area into northern New Jersey Favorable financial terms² Price/Tangible Book Value of 174% Core Deposit Premium of 9.5% Effective execution A
Slide 33: Continuous Investment In Talent and Technologies
Continuous Investment In Talent and Technologies Funded from ongoing earnings and branch consolidations FTE designated for digital banking and customer care 2015 FTE2019 FTE Build Alexa Voice Skill (1st Phase) Wearables & eWallets Replace Online & Mobile Account Opening AI Driven Marketing 100% Cert
Slide 34: Digital Capabilities & Customer Ratings
Digital Capabilities & Customer Ratings Investor Presentation A few notables include: BofA17 Chase 13 USAA 10 TD7 A few notables include: USAA4.8 Chime4.7 Chase4.6 M&T3.9 # Ratings = 4,337 Median # Ratings = 824 4.7 Source: S&P Global 2019 US Mobile Banking Report Source: iTunes App and Google App a
Slide 35: Digital Customer Acquisition
Digital Customer Acquisition Investor Presentation Digital marketing campaign launched in December 2018 Artificial Intelligence campaigns added in September 2019 Retail Checking accounts opened in 4Q 2019: Online exceeds average branch by 5x Online exceeds bottom 25% of entire branch network Online
Slide 36: Treasury Management Services
As of December 31, 2019 Investor Presentation Treasury Management Services Accounts1 Over 33,000 Balances1 Over $2.6 billion Future Enhancements Over $500k investment in enhancing our Online banking solution to be available in 2Q 2020. Treasury Management Solutions: ACH Origination, Receipts, Addend
Slide 37: 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 senior InfoSe
Slide 38: Strategic Capital Allocation Generates Shareholder Returns
Investor Presentation Strategic Capital Allocation Generates Shareholder Returns Stable & competitive dividend 92nd consecutive quarter Historical Payout Ratio of 30% to 40% Repurchased 1.1 million shares in 2019; 2.7 million shares remain available for repurchase under share repurchase program Stra
Slide 39: Investment Thesis
Investor Presentation Investment Thesis Organic Growth Including Low-Cost and Durable Deposit Base Cost of deposits is one of the lowest in the state of New Jersey at 61 basis points¹ Strength of Assets Strong and diversified balance sheet underpins flexibility to grow the business Digital Innovatio
Slide 40: COVID-19 Pandemic Response Overview & Appendix
COVID-19 Pandemic Response Overview & Appendix
Slide 41: PPP Application Status
PPP Application Status Data as of April 22, 2020 Loans approved to date have an estimated fee income of approximately $12 million that will be realized in future quarters. Investor Presentation
Slide 42: ACL Components
ACL Components In addition to the Allowance for Credit Losses, there is $38 million in net unamortized purchase accounting credit marks. Investor Presentation
Slide 43: Commercial Loan Forbearance
Commercial Loan Forbearance Commercial Portfolio Total Outstanding Balance: $5bn Forbearance Requests Total Forbearance Requests: $775M *WA LTV: 55% *WA DSCR: 1.9 No delinquency last 24 months: 93% Forbearance requests are well-secured and represent just 16% of commercial portfolio Data as of April
Slide 44: Commercial Loan Forbearance (Credit Attributes)
Commercial Loan Forbearance (Credit Attributes) Forbearance requests are moderating Data as of April 17, 2020 Investor Presentation
Slide 45: Residential and Consumer Loan Forbearance
Residential and Consumer Loan Forbearance Residential and Consumer Portfolio Total Outstanding Balance: $3bn WA LTV: 70% Forbearance Requests Total Forbearance Requests: $311M WA FICO Score: 742 WA LTV: 70% As of forbearance request date Data as of April 17, 2020 Investor Presentation
Slide 46: Residential and Consumer Loan Forbearance (Credit Attributes)
Residential and Consumer Loan Forbearance (Credit Attributes) Data as of April 17, 2020 Forbearance requests are moderating FICO Score Payment History Vintage Investor Presentation
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation Investor Presentation
Slide 48: Non-GAAP Reconciliation (Continued)
Non-GAAP Reconciliation (Continued) Investor Presentation
Oceanfirst Financial — Investor Presentation (April 2020) on 6ix