Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (May 2015)
29 slides from Oceanfirst Financial's investor presentation, May 19, 2015
Slide 1: OceanFirst Financial Corp. Investor Presentation May 2015
Exhibit 99.1 OceanFirst Financial Corp. Investor Presentation May 2015
Slide 2: Forward Looking Statements
OceanFirst Financial Corp. Forward Looking Statements: This presentation contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These for
Slide 3: OceanFirst Bank Milestones
OceanFirst Bank Milestones Rebuilt Capital Founded, Established To 9.5% Through Point Pleasant, Commercial Secondary NJ Lending Stock Offering Established OceanFirst IPO To Trust and Foundation Passes Mutual Asset Management $25 Million In Depositors Cumulative Grants Branch Expansion Branch Expansi
Slide 4: Serving Central New Jersey Market
Serving Central New Jersey Market • Community Bank serving the Central Jersey market - $2.4 billion in assets and 23 branch offices (24 th branch opening in mid 2015) • Targeting growth opportunities in Monmouth, Mercer and Middlesex Counties • Market Cap $290.7 million Pending Colonial acquisition
Slide 5: Experienced Leadership
Experienced Leadership • Substantial insider ownership of 27.3% – aligned with shareholders’ interests OceanFirst Bank ESOP 10.0% Directors & Senior Executive Officers 10.6% (Chairman 5.9%) Director and Proxy Officer Stock Ownership Guidelines OceanFirst Foundation 6.7% As of March 10, 2015 proxy da
Slide 6: Depth of Management
Depth of Management # of Years Previous Name Position at OCFC Experience PGB Trust and Investments (Division of Craig C. Spengeman Executive Vice President, Director of Wealth Management 1 Peapack-Gladstone Bank) Wells Fargo Bank, N.A.; Margaret Lanning First Senior Vice President, Chief Credit Offi
Slide 7: Our Strategy
Our Strategy • Positioned as the leading Community Bank in attractive Central Jersey market – developing the franchise, growing revenue and creating additional value for shareholders • Strategically focused on revenue growth in commercial lending, wealth management, and bankcard services • Guarding
Slide 8: Significant Primary Market Deposit Share
Significant Primary Market Deposit Share Competing Favorably Against Banking Behemoths # of Dep. In Mkt. Mkt. Shr. Rank Institution Branches ($000) (%) Ocean County, NJ 1 TD Bank, National Association (Canada) 22 2,541,705 17.45 (1) 2 Hudson City Bancorp Inc. (NJ) 14 2,212,695 15.19 3 Wells Fargo Ba
Slide 9: Strategic Deposit Composition Transition
Strategic Deposit Composition Transition *Time deposits duration of 19 months 9
Slide 10: Deposit Transition Supported by Strategic Focus on Business Checking
Deposit Transition Supported by Strategic Focus on Business Checking 10
Slide 11: Technology and Delivery Systems
Technology and Delivery Systems Commercial Cash Management Online Banking & Bill Pay Mobile Banking Added Remote Deposit Capture In 2014, 42% of depositors used Added mobile deposit capture (RDC) in 2007. In 2014, 88 clients online banking and an average of in 2013. More than 14,000 processed over 6
Slide 12: Strategic Loan Composition Transition
Strategic Loan Composition Transition (1)Commercial loan (CRE and C&I) duration of 3.2 years. 12
Slide 13: Credit Underwriting Remains Conservative
Credit Underwriting Remains Conservative Commercial Loan Production 2014 and 2015 First Quarter 2014 Total 2015 Total Commercial Commercial Total Loan Loan Portfolio at (Dollars in thousands) Originations Originations March 31, 2015 Amount $243,858 $69,436 $775,246 Weighted average rate 4.14% 4.13%
Slide 14: Highlights – First Quarter 2015
Highlights – First Quarter 2015 • Announced a merger agreement with Colonial American Bank in an all stock transaction valued at $11.3 million at the time of announcement. Colonial operates two full service banking centers in Middletown and Shrewsbury, New Jersey, with total assets of $143.7 million
Slide 15: Highlights – Risk Management
Highlights – Risk Management Over the past year through March 31, 2015: • Interest Rate Risk Management Extended $154 million of FHLB advances into 3 – 5 year terms $90 million of retail checking migrated to non-interest bearing Core deposits (1) are 88.1% of total deposits, a significant hedge agai
Slide 16: Credit Metrics Reflect Conservative Culture
Credit Metrics Reflect Conservative Culture 3.50% 0.70% 3.00% 0.60% 2.50% 0.50% 2.00% 0.40% 1.50% 0.30% 1.00% 0.20% 0.50% 0.10% 0.00% 0.00% 2009 2010 2011 2012 2013 2014 3/31/2015 Residential Consumer Commercial Real Estate Commercial Net Charge-Offs Note: Atlantic County Loan Exposure totals $11.6
Slide 17: Prudently Provisioning for Credit Costs
Prudently Provisioning for Credit Costs $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 12/31/09 12/31/10 12/31/11(1) 12/31/12 12/31/13 12/31/14 3/31/15 Net Charge-Offs Net Charge-Offs Attributable to Bulk Sale of NPL's Provision for Loan Losses (1) Spike in charge-offs was due to a change in charge-off policy to
Slide 18: Net Interest Margin
Net Interest Margin Stabilizing Close to Historical Levels Historical Average Net Interest Margin (3.28%) 18
Slide 19: Diversified Streams of Non-Interest Income
Diversified Streams of Non-Interest Income 0.80% $15.6M 0.70% 0.60% Targeted Growth 0.50% Areas 0.40% 0.30% $2.5M 0.20% 0.10% 0.00% 1996 3/31/2015 (Annualized) Fees and Service Charges Gain on Sale of Loans BOLI Other BankCard Services Investment Services Wealth Management Non-Interest Income exclud
Slide 20: Generating Consistent Attractive Returns
Generating Consistent Attractive Returns 14.0% 1.40% 12.0% 1.20% 10.0% 1.00% 8.0% 0.80% 6.0% 0.60% 4.0% 0.40% 2.0% 0.20% 0.0% 2009 2010 2011 2012 2013 (1) 2014 3/31/15 0.0% (Annualized) Return on Equity Return on Assets (1) Excludesafter-taximpact of $3.1million in non-recurringchargesrelated to str
Slide 21: Prudently Managing Excess Capital in Near Term
Prudently Managing Excess Capital in Near Term $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 2011 2012 2013 2014 3/31/15 (Three Months) Stock Repurchases Cash Dividends Notes: Stock Repurchases – $15.06 Average Cost per Share. Quarterly dividend rate increased by $0.01, or 8.3%, in October 2014. 21
Slide 22: Challenge Today is to Grow Revenue, Build Shareholder Value
Challenge Today is to Grow Revenue Build Shareholder Value • Target growth in broader central New Jersey market – increasing share In early 2015, added new commercial lending team located in Mercer County Commercial loans increase at double digit percentage growth rate for seven consecutive quarters
Slide 23: Why OCFC…?
Why OCFC…? • Fundamental franchise value – superior deposit profile and consistent, conservatively underwritten, commercial loan growth • Seasoned and effective management team Substantial insider ownership – aligned with shareholders’ interests • Conservative credit culture and profile • Solid fina
Slide 24: Attractive Valuation Metrics
Attractive Valuation Metrics OCFC Peers (1) Valuation Price / Tang. Book Value 132% 150% Price / LQA EPS 13.5x 14.9x Price / Estimated EPS 13.4x 14.2x Core Deposit Premium 4.1% 7.2% Cash Dividend Yield 3.0% 2.9% 1) Peers include: DCOM, FFIC, FLIC, LBAI, ORIT, PGC, SNBC, SUBK, UVSP and WSFS Note: Fin
Slide 25: Appendix
Appendix 25
Slide 26: Market Demographics
APPENDIX 1 Market Demographics Ocean Monmouth Middlesex Mercer National Number of Offices 19 4 1 % of OceanFirst Deposits 86.2 10.9 2.9 Market Rank 4 17 35 Market Share (%) 10.2 0.9 0.2 Population 583,000 628,000 831,000 369,000 Projected 2014-2019 1.4 — 3.0 1.2 3.5 Population Growth (%) Median Hous
Slide 27: Commercial Portfolio Metrics
APPENDIX 2 Commercial Portfolio Metrics Commercial Real Estate (CRE) Total portfolio (1) $667.8 million % of Total Loan Portfolio 37.7% Average size of CRE loans $864,000 Largest CRE loan $15.9 million Current Pipeline $29.0 million Weighted Average Yield 3.98% Weighted Average Repricing Term 4.4 ye
Slide 28: Commercial Portfolio Segmentation
APPENDIX 2 (Cont’d) Commercial Portfolio Segmentation Total Commercial Loan Exposure Real Estate Investment by Property Classification by Industry Classification Miscellaneous, 8.1% Multi-Family, 6.0% Office, 33.4% Miscellaneous, 5.2% Retail Store, 8.4% Public Administration, 5.6% Educational Servic
Slide 29: Residential Portfolio Metrics
APPENDIX 3 Residential Portfolio Metrics Residential Real Estate Total Portfolio $784.4 million % of Total Loan Portfolio 45.2% Average size of mortgage loans $195,000 % of loans for second homes 10.4% Portfolio weighted average loan-to-value ratio (using original or most recent appraisal) 56% - Loa
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