Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (May 2020)
41 slides from Oceanfirst Financial's investor presentation, May 5, 2020
Slide 1: OceanFirst Financial Corp. Investor Presentation May 2020
. . . Exhibit 99.1 OceanFirst Financial Corp. Investor Presentation May 2020
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
Slide 3: About OceanFirst Financial Corp.
. . . About OceanFirst Financial Corp. 3
Slide 4: OceanFirst Financial Corp.
INVESTOR PRESENTATION . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $997million1 • 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 Headquarters OceanFirst Ba
Slide 5: 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 70 basis points • Strength of Assets • Strong and diversified balance sheet underpins flexibility to grow the business • Di
Slide 6: Commitment to Execution
INVESTOR PRESENTATION . . . Commitment to Execution Our Recent Accomplishments... …Lead to Our Path Forward • Seven Acquisitions Closed in Less Than • Local to Regional Scale Five Years, Including Two River Bancorp (NASDAQ: TRCB) & Country Bank • Increased Investment in Digital Banking Holding Compa
Slide 7: Our Business
. . . Our Business 7
Slide 8: First Quarter 2020 Highlights
INVESTOR PRESENTATION . . . First Quarter 2020 Highlights Financial Highlights Operational Highlights • Core Net Income of $27.0 million • Acquisitions of Two River and Country • Core Diluted EPS of $0.45 Bank completed on January 1, 2020, with • Net Interest Margin of 3.52% full integration of Two
Slide 9: ACL Components
INVESTOR PRESENTATION . . . ACL Components In addition to the Allowance for Credit Losses, there is $38 million in net unamortized purchase accounting credit marks. 9
Slide 10: PPP Application Status
INVESTOR PRESENTATION . . . PPP Application Status $10M 141 2K Loans approved to date have an estimated fee income of approximately $17.1 million that will be realized in future quarters. 10 Data as of May 3, 2020
Slide 11: Net Interest Margin
INVESTOR PRESENTATION . . . Net Interest Margin Operational Highlights Net Interest Margin 2 4.50 • Non-interest bearing deposits 4.00 are 21% of average balance of 3.58 3.50 total deposits 1 3.39 3.00 • Balanced interest rate risk 2.50 position 2.00 Percentage 1.50 1.55 1.00 0.50 0.00 2014 2015 201
Slide 12: Effective Interest Rate Risk Management
INVESTOR PRESENTATION . . . Effective Interest Rate Risk Management Duration 5.0 All asset categories managed with limited duration 4.0 3.0 Years 2.0 1.0 0.0 Securities Mortgage Loans Consumer Loans Commercial Loans Total Assets FHLB Term Time Deposits (Weighted Average) Borrowings Rate Characterist
Slide 13: Deposit Growth with Branch Consolidation
INVESTOR PRESENTATION . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch 1 9,000 125 Average Deposits Per Branch ($ Millions) ($ Branch Deposits Per Average 8,000 100 7,000 Strength and Durability of Low-Cost 6,000 Deposit Position 75 • $105 million average branch size as of 5,
Slide 14: Loan Composition Emphasizes Commercial
INVESTOR PRESENTATION . . . Loan Composition Emphasizes Commercial1 Total Loans Outstanding Loans by Customer Segment – 2020 2015 2016 36% 2017 2018 64% 2019 2020 Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 (in millions) Residential Home
Slide 15: 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 Peer 5 Peer 6 Capacity to grow Investor CRE Peer 7 by $209 million while Peer 8 remaining under 300% Peer 9 Peer 10 OCFC 2
Slide 16: Generating Consistent & Attractive Returns
INVESTOR PRESENTATION . . . Generating Consistent & Attractive Returns 16.0% 1.50% 1.35% 14.0% 1.20% 12.0% 1.05% 10.0% Assets on Return 0.90% 8.0% 0.75% 0.60% 6.0% 0.45% 4.0% 0.30% 2.0% ReturnTangibleon Equity Common 0.15% 0.0% 0.00% 20151 20161 20171 2018 1 20191 2020 1, 2 Core Return on Tangible C
Slide 17: Credit Metrics Reflect Conservative Culture
INVESTOR PRESENTATION . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.05% 0.15% 0.10% 0.05% 0.02% 0.06% 1.00% 0.91% 0.90% 0.80% 0.70% 0.60% 0.52% 0.50% 0.40% 0.35% 0.31% 0.30% 0.29% 0.21% 0.20% 0.10% Non-Performing Non-
Slide 18: Our Strategy
. . . Our Strategy 18
Slide 19: 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 July31,2015 ~$12million $ 142million Cape Bancorp May2,2016 ~$196million $1,518million Ocean Shore Hold
Slide 20: 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
Slide 21: 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
Slide 22: Digital Culture – Years of Transformation
INVESTOR PRESENTATION . . . Digital Culture – 5 Years of Transformation Continuous Investment In Talent and Technologies • Funded from ongoing earnings and branch consolidations Artificial Intelligence Digital Customer Team Onboarding Team Wearables and Digital Strategy & First FinTech Equity Projec
Slide 23: Digital Capabilities & Customer Ratings
INVESTOR PRESENTATION . . . Digital Capabilities & Customer Ratings Mobile Capabilities Survey Mobile App Customer Ratings (# of features, out of 18) (Apple & Google) OceanFirst 12 OceanFirst 4.7 # Ratings = 5,029 National / 4.6 National / Regional 10 Regional Large MidAtlantic 4.5 FinTechs / 10 Dig
Slide 24: Digital Customer Acquisition
INVESTOR PRESENTATION . . . Digital Customer Acquisition Attaining Scale… … And Attracting Valuable Customers • Digital marketing campaign Customer Usage Statistics* Online Branch launched in December 2018 Digital Usage 95.6% 76.0% • Artificial Intelligence campaigns added in Mobile Usage 79.1% 57.0
Slide 25: 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 33,000 Over $2.5 billion • Account Analysis Statements • Business Online Banking • Coi
Slide 26: 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
Slide 27: Strategic Capital Allocation Generates Shareholder Returns
INVESTOR PRESENTATION . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders $65 $60 $55 $50 $45 • Stable & competitive dividend $40 • 93rd consecutive quarter $35 $30 • Historical Payout Ratio of 30% to 40% $25 $20 • Repurchased 648,851 shares YTD $15 Annu
Slide 28: 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 7 Chief Executive Officer Dime Community Bancshares Executive Vice President, Wachovia Bank N.A. Joseph J. Lebel III
Slide 29: OceanFirst Foundation: Serving Our Communities
INVESTOR PRESENTATION . . . OceanFirst Foundation: Serving Our Communities • Over $40 million has been granted to organizations serving OceanFirst’s market • Provided $250,000 in grants dedicated to assisting the non-profit organizations helping our neighbors during the coronavirus pandemic • First
Slide 30: 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 70 basis points • Strength of Assets • Strong and diversified balance sheet underpins flexibility to grow the business • Di
Slide 31: 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 31
Slide 32: Appendix
. . . Appendix 32
Slide 33: Country Bank Holding Company, Inc. Acquisition
INVESTOR PRESENTATION . . . Country Bank Holding Company, Inc. Acquisition • 100% Stock deal, valued at $113 million • Expands branch network to support NYC lending efforts • Favorable financial terms1 • Price/Tangible Book Value of 151% • Price/Core Deposit Premium of 7.5% • Effective execution • A
Slide 34: Two River Bancorp Acquisition
INVESTOR PRESENTATION . . . Two River Bancorp Acquisition • 75% stock and 25% cash, valued at $197 million • Strengthens presence in Monmouth County and expands market area into northern New Jersey • Favorable financial terms1 • Price/Tangible Book Value of 174% • Price/Core Deposit Premium of 9.5%
Slide 35: OceanFirst Milestones – Years of Growth
INVESTOR PRESENTATION . . . OceanFirst Milestones – 118 Years of Growth Crossed $10 billion IPO to Mutual threshold Depositors Created OceanFirst Colonial American Adopted National Two River Bancorp Foundation Bank Acquired Bank Charter Acquired Established Commercial LPO Country Bank Founded, Estab
Slide 36: 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
Slide 37: Commercial Portfolio Segmentation
INVESTOR PRESENTATION . . . Commercial Portfolio Segmentation 1 Total Commercial Loan Exposure by Real Estate Investment by Industry Classification Property Classification Miscellaneous 13.0% Office 26.0% Miscellaneous Hotel/Motel 12.0% 3.0% Other Services 3.0% Industrial/ Accommodations/ Warehouse
Slide 38: Commercial Loan Forbearance
INVESTOR PRESENTATION . . . Commercial Loan Forbearance Commercial Portfolio Forbearance Requests Total Outstanding Balance: $5bn Total Forbearance Requests: $775M Forbearance requests *WA LTV: 55% are well-secured and *WA DSCR: 1.9 represent just 16% of No delinquency last 24 months: 93% commercial
Slide 39: Commercial Loan Forbearance (Credit Attributes)
INVESTOR PRESENTATION . . . Commercial Loan Forbearance (Credit Attributes) Forbearance requests are moderating . . . 39 Data as of April 17, 2020
Slide 40: Residential and Consumer Loan Forbearance
INVESTOR PRESENTATION . . . Residential and Consumer Loan Forbearance Residential and Consumer Portfolio Forbearance Requests Total Outstanding Balance: $3bn Total Forbearance Requests: $311M WA LTV: 70% WA FICO Score: 742 WA LTV: 70% As of forbearance request date 40 Data as of April 17, 2020
Slide 41: Residential and Consumer Loan Forbearance (Credit Attributes)
INVESTOR PRESENTATION . . . Residential and Consumer Loan Forbearance (Credit Attributes) Forbearance requests are moderating FICO Score Payment History Vintage . . . 41 Data as of April 17, 2020
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