Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (October 2006)
22 slides from Oceanfirst Financial's investor presentation, Oct 30, 2006
Slide 1: OceanFirst Financial Corp. Investor Presentation November 2006
NASDAQ: OCFC 1 OceanFirst Financial Corp. John R. Garbarino, Chairman, President & CEO Michael J. Fitzpatrick, Executive Vice President & CFO INVESTOR PRESENTATION NOVEMBER 2006 Exhibit 99.1
Slide 2: Forward-looking statements
NASDAQ: OCFC 2 This presentation contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe”, “expect”, “intend”, “ant
Slide 3: OceanFirst Financial Today
NASDAQ: OCFC 3 $2.1 Billion in Assets – 19 OceanFirst Bank branches within a tightly defined market area and 2 satellite loan production offices Columbia Home Loans, LLC. (CHL) – wholly owned mortgage banking subsidiary headquartered in Westchester County, New York with offices in the greater NYC me
Slide 4: Attractive Market Area
NASDAQ: OCFC 4 Attractive Market Area Attractive Market Area
Slide 5: Ocean County – Fastest Growing County in NJ
NASDAQ: OCFC 5 558,000 people in Ocean County in 2005 • 9.3% increase since 2000 • Outpacing NJ (3.6% increase) • Outpacing US (5.3% increase) $52,065 Ocean County median household income in 2005 • 12.1% increase since 2000 83% Home Ownership in Ocean County • Outpacing NJ (65%) • Outpacing US (66%)
Slide 6: Ocean County Deposit Market Share
NASDAQ: OCFC 6 Total Average # of Deposits Branch Market Bank Branches (000) Size (000) Share % Commerce 17 $1,607,426 $ 94,554 14.5 Wachovia 31 $1,544,740 $ 49,830 13.9 Hudson City Savings 14 $1,482,195 $105,871 13.4 OceanFirst 15 $1,166,196 $ 77,746 10.5 Bank of America 41 $1,140,420 $ 27,815 10.3
Slide 7: Growth Opportunities in Market
NASDAQ: OCFC 7 Source: US Census Bureau - 2000 Growth Opportunities in Market Growth Opportunities in Market 3 New Branches Committed Little Egg Harbor Freehold (2) Wall (2) Many More Opportunities Ahead e.g. Jackson Area (2) • 100 Square miles • Population 42,816 • 10 Year Population Growth = 28.8%
Slide 8: Ten Years Delivering Shareholder Value
NASDAQ: OCFC 8 9/30/2006 12/31/1996 CAGR Total Loans $1,714,760,000 $ 690,306,000 9.8% Core Deposits 825,158,000 317,070,000 10.3% Last 12 Months Year Ended Sept. 30, 2006 Dec. 31, 1997 CAGR EPS $1.58 $.59 11.9% Annual Dividend .80 .27 13.2% ROE 14.1% 6.0% 10.2% Fee and Service Charge Income $10,313
Slide 9: Current Plan Execution Challenges
NASDAQ: OCFC 9 Flat to inverted yield curve Aggressive CD pricing dominating consumer choice Margin pressure from deposit preference shift Mortgage banking encounters most difficult operating environment in last 10 years Market relaxation of lending standards at wrong time make growth difficult for
Slide 10: Core Deposit Growth has Stalled
NASDAQ: OCFC 10 0 200 400 600 800 1000 1200 1400 1600 Core Deposits CD's At December 31, unless otherwise indicated. Core deposits include all deposits other than certificates. Core Deposit Growth has Stalled - Core Deposit Growth has Stalled - 2006 2006
Slide 11: Commercial Loans Have Grown – Stabilized 2006
NASDAQ: OCFC 11 At December 31 unless otherwise indicated. 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Commercial Mortgage and Consumer Commercial Loans Have Grown – Commercial Loans Have Grown – Stabilized 2006 Stabilized 2006
Slide 12: Credit Risk Aided by Portfolio Characteristics
NASDAQ: OCFC 12 Commercial Lending • Diversified, low risk $350 million portfolio Commercial real estate - 86% $598,000 average C & I - 14% $87,000 average Only 4 loans between $5 million and $10 million Limited exposure to residential construction lending • No large, speculative subdivisions Strong
Slide 13: Business Plan Targets Need to Reset
NASDAQ: OCFC 13 Commercial/Consumer Loans Mix 30% 38% Revenue Mix (percent of total revenue) • Mortgage Banking 14% ? • Fee and Service Charge 13% 17% With Balance Sheet growth and transformation limited in this environment – share repurchases continue to support EPS. Target continues to be to resto
Slide 14: Mortgage Banking – Year Cyclicality
NASDAQ: OCFC 14 CHL Quarterly EPS Contribution -0.06 -0.04 -0.02 0.00 0.02 0.04 0.06 0.08 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 2001 2002 2003 2004 2005 2006 $ Mortgage Mortgage Banking Banking – – Year Year Cyclicality Cyclicality
Slide 15: Other Non-Interest Income Initiatives
NASDAQ: OCFC 15 Largest reverse mortgage originator headquartered in NJ, one of a handful of select, nationwide FNMA seller/servicers • Expected to contribute $1.0 million in fee income in 2006 and $1.2 million in 2007 Trust Service fees continue to grow, contribute to bottom line • $850,000 in 2006
Slide 16: Share Repurchase Plans
NASDAQ: OCFC 16 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 0 5 10 15 20 25 Cumulative Repurchases Capital Ratio Capital ratios are as of December 31 unless otherwise indicated. Share repurchases are for the year ended December 31 unless otherwise indicated. Share Repurchase Plans Share Repu
Slide 17: Repurchase Program Supporting EPS Growth
NASDAQ: OCFC 17 Repurchased 16.8 million shares in total; 62% of original issue Thirteenth common stock repurchase program announced in July 2006 for an additional 5% (615,883) of outstanding shares Currently accretive to EPS by 3% • Pro-forma capital ratio declines to 6.2% at December 31, 2007 from
Slide 18: In this Environment……Managing Carefully
NASDAQ: OCFC 18 Enterprise-wide Risk Management Exercise discipline/restraint in growth initiatives Rationalize Mortgage Banking business line Take what the market gives without forcing Issue Tier II Capital to support share repurchases Assuming the Fed is done, and the yield curve reverts In this E
Slide 19: Retail Deposit Funding Must First Be Restored
NASDAQ: OCFC 19 Disciplined de novo branching and core deposit generation • Over 10 years, 11 branches were opened with an average core deposit mix of 68% Current branch activity in our growth market • Barnegat branch opened in May 2006 • Whiting branch was relocated to a more convenient, prominent
Slide 20: Business Plan Imperatives
NASDAQ: OCFC 20 Focus on disciplined de novo branch and core account development to support the margin, drive asset/revenue growth Target commercial lending as the focus of portfolio growth, improving the loan portfolio mix Grow non-interest income (with or without CHL) a key driver of top-line reve
Slide 21: Building Additional Shareholder Value
NASDAQ: OCFC 21 In the long run, we hope you agree the following undoubtedly create value for the long term OCFC investor: • Enterprise-wide Risk Management supports OceanFirst credibility to preserve and build value in this environment • Low Risk, uncomplicated business plan to deliver earnings gro
Slide 22: Thank you for your interest in OceanFirst Financial Corp.
NASDAQ: OCFC 22 Thank you for your Thank you for your interest in interest in OceanFirst OceanFirst Financial Corp. Financial Corp.
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