Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Q1 2022 Earnings Presentation
22 slides from Oceanfirst Financial's earnings presentation, Apr 28, 2022
Slide 1: OceanFirst Financial Corp. 1Q 2022 Investor Presentation
. . . 1 The 1Q 2022 Investor Presentation should be read in conjunction with the Earnings Release furnished as Exhibit 99.2 to Form 8-K filed with the SEC on April 28, 2022. Exhibit 99.2 OceanFirst Financial Corp. 1Q 2022 Investor Presentation1 April 2022
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: Strategic and Operational Focus
. . .Strategic and Operational Focus 3 Outstanding and Proven Growth Efficiency Cost Model Focused on Investment in Technology Efficient Funding Base and Competitive Spreads Strategic Capital Utilization Significant top-line revenue growth driven by robust loan and deposit growth. Optimized branch n
Slide 4: First Quarter 2022 Financial Highlights
. . .First Quarter 2022 Financial Highlights 4 Performance Year-over-Year (1) Core metrics exclude merger related expenses, net branch consolidation expenses, net loss/gain on equity investments, and the income tax effect of these items, (collectively referred to as “non-core” items). TBV (tangible
Slide 5: Proven Historical Net Interest Income and Loan Growth
. . .Proven Historical Net Interest Income and Loan Growth 5 76,829 120,262 169,218 240,502 255,971 312,951 305,338 84,227 3.25% 2015 2016 3.18% 3.71% 3.46% 2019 3.52% 2017 2018 3.62% 341,587 3.16% 2020 2.92% 2021 Q1-22 Net Interest Margin Annualized Net Interest Income Peer Leading Net Interest Inc
Slide 6: Successful Commercial Loan Growth
. . .Successful Commercial Loan Growth 6 49% 2015 Q1-22 68% +19% (Commercial % of Loan Portfolio) Commercial Loans by Geography as of Q1-22 53% of Commercial Loans Originated in Philadelphia and NY Emphasis on Commercial Increase of $5.2B in Commercial Loans since 2015 44% 31% 22% 3% New Jersey New
Slide 7: Continued Focus on Growing Core Deposits
. . .Continued Focus on Growing Core Deposits1 7 Shift Toward Non-Interest Bearing Deposits ($’millions) 1,661 3,542 3,736 4,948 5,393 8,055 8,958 9,169 647 607 866 936 1,373 775 887 202120192015 255 2020 10,056 1,916 2016 2017 9,733 2018 Q1-22 4,3434,189 5,814 6,329 9,428 Non-Core Core (1) Core dep
Slide 8: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 8 Core Non-Interest Expense1 ($’000) 40,838 40,752 43,222 43,126 42,802 9,453 10,446 11,212 13,971 12,326 Q1-21 50,291 Q3-21Q2-21 Q4-21 54,434 Q1-22 51,198 57,097 55,128 Technology Expense Other Core Non-Int Exp 1.87% Q2-21 58.37
Slide 9: Operational Efficiency
. . .Operational Efficiency 9 Deposits per Branch ($’millions) (52) bps2.39% 1.87% 2015 Q1-22 Core Non-interest Expense 1 to Total Avg. Assets (Annualized) 71 69 94 99 113 152 207 265 20162015 2018 20192017 2020 2021 Q1-22 3.7x Operating Efficiency ($’millions) 7 7 8 9 9 12 13 13 96 85 118 127 147 1
Slide 10: Growth in Net Interest Margin
. . .Growth in Net Interest Margin 10 Average loan growth since 3Q-21 was ~$460MM and the loan pipeline of $515MM remains strong at March 31, 2022. In addition, end of period loan balances are $269MM higher than average balances for the quarter. Loan-to-deposit position provides funding base for
Slide 11: Generating Consistent and Attractive Returns
. . .Generating Consistent and Attractive Returns 11 Book Value and Tangible Book Value per Common Share1 Core ROAA and ROTE1 • Increase in tangible book value per common share versus linked quarter when many banks experienced a decline. In addition, tangible book value per common share increased by
Slide 12: Business Model Strength Driving Significant Capital Return
. . .Business Model Strength Driving Significant Capital Return 12 $0.49 $1.01 $1.55 $2.15 $2.77 $3.45 $4.13 $4.81 $4.98 $0.55 $0.94 $1.04 $1.09 $1.39 $1.97 $2.25 $2.86 $2.89 $15.93 2017 $12.33 20152013 $13.67 $15.62 $12.94 2016 $13.58 $14.26 2018 $23.81 2019 $14.98 2020 $12.91 $15.94 $12.33 $13.95
Slide 13: Appendix
. . . I N V E S T O R P R E S E N T A T I O N 13 Appendix
Slide 14: OCFC's Strong History of Credit Discipline
. . .OCFC’s Strong History of Credit Discipline 14 Global Financial Crisis Net Charge Offs (NCOs) / Avg. Loans (%) Hurricane Sandy (1) Source: S&P Global (2) Proxy and US Bank industry reporting is on a one quarter lag (3) Peer group disclosed in OCFC’s DEF-14A issued 4/20/21. This excludes UBNK due
Slide 15: Conservative Credit Risk Profile
. . .Conservative Credit Risk Profile 15 2016 0.08% 0.01% 0.12% 0.05% 0.36% 0.05% 0.12% 0.21% 0.01% 0.11% 2017 0.03% 0.22% 0.00% 0.10% 0.05% 0.13% 2018 0.00% 0.04% 0.12% 0.12% 2019 0.07% 0.02% 0.30% 0.03% 0.11% 2020 2021 0.03% 0.02% 0.08% 0.35% 0.52% 0.31% 0.29% 0.47% 0.02% Q1-22 0.25% ResidentialCo
Slide 16: Quarterly Credit Trends (1 of 2)
. . .Quarterly Credit Trends (1 of 2) 16 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans Net Charge-offs (NCOs) / (Recoveries) and Credit Loss Expense (Benefit) ($’000) 0.61% 0.26% 0.33% 0.76% Q1-21 0.30% 0.69% Q2-21 Q3-21 0.22% 0.57% Q4-21 0.18% 0.56% Q1-22 1.09
Slide 17: Quarterly Credit Trends (2 of 2)
. . . Stabilizing asset quality trends align with improving economic outlook. Quarterly Credit Trends (2 of 2) 17 Non-Performing Loans and Assets ($’000)1 Special Mention and Substandard Loans ($’000) Note: Of the $91.6 million in Special Mention loans and $113.9 million of Substandard loans, $90.2
Slide 18: Asset Growth Supplemented by Strategic M&A
. . .Asset Growth Supplemented by Strategic M&A 18 ($ in millions) 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 Shore Holding Co. November 30, 2016 ~$146 million $1,097 mi
Slide 19: Northeast and Mid-Atlantic Expansion Opportunities
. . .Northeast and Mid-Atlantic Expansion Opportunities1 19 • New Jersey is an attractive market. • Statewide total population of 9.3 million. • Most densely populated state. • 11th most populous state. • Median household income of $82,500. • Significant opportunities for acquisitions to build custo
Slide 20: Experienced Management Team with Banking Expertise
. . .Experienced Management Team with Banking Expertise 20 Substantial insider ownership of 11%2, including Directors, Executive Officers, ESOP and OceanFirst Foundation. Executive Title Years Experience1 Select Experience Christopher D. Maher Chairman & Chief Executive Officer 9 • Director of the F
Slide 21: Interest Rate Sensitivity (1 of 2)
. . .Interest Rate Sensitivity (1 of 2) 21 OceanFirst Bank balance sheet is highly asset-sensitive. A measurable upward change in the rate environment could have a significant impact to our performance going forward. Economic Value of Equity (EVE)1 - % ChangeEarnings at Risk (EAR)1 - % Change -8 -
Slide 22: Interest Rate Sensitivity (2 of 2)
. . .Interest Rate Sensitivity (2 of 2) 22 Rate Characteristics 78% 92% 55% 52% 66% 31% 91% 22% 45% 48% 34% 69% 9%8% Securities Consumer Loans BorrowingsTotal Assets (Weighted Avg) Mortgage Loans Commercial Loans (CRE & C&I) Deposits Core DepositsAdjustable/Floating Fixed Note: Data as of 3/31/22 3.