Slide 1: 3Q 2023 Earnings Release Supplement
. . . 1 The 3Q 2023 Earnings Release Supplement should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on October 19, 2023. Exhibit 99.2 OceanFirst Financial Corp. 3Q 2023 Earnings Release Supplement1 October 2023
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: Q3-23 Financial Highlights
. . .Q3-23 Financial Highlights 3 (1) For non-GAAP financial measures, please refer to the ‘Non-GAAP Reconciliations’ in the Appendices for a reconciliation to GAAP financial information. Financial Highlights $0.32 Core Diluted EPS 1 $91 million Net Interest Income 0.54% Core ROAA 1 6.88% Core ROTCE
Slide 4: Investor Presentation Quarterly
. . . I N V E S T O R P R E S E N T A T I O N 4 Quarterly Earnings Update
Slide 5: Loan Portfolio Trends
. . .Loan Portfolio Trends 5 Moderated Loan Growth in the Portfolio ($’millions) Loan growth has moderated prudently, with the expectation of low single-digit growth for the remainder of the year. Improving loan yields. 5,008 5,172 5,297 5,320 5,334 984 997 986 982 957 653 622 622 620 652 2,813
Slide 6: Credit Quality Historically Top Quartile and Well Positioned
. . .Credit Quality Historically Top Quartile and Well Positioned Underlying collateral is diversified: The underlying collateral for the CRE Investor Owned (“Investor”) portfolio is highly diversified and focused in low risk collateral types. Maturity wall is modest and has a minimal impact: Ou
Slide 7: Quarterly Credit Trends (1 of 2)
. . . Strong asset quality trends driven by prudent loan growth and credit decisioning. Quarterly Credit Trends (1 of 2) 7 Non-Performing Loans and Assets ($’000)1, 2 Special Mention and Substandard Loans ($’000) Note: At September 30, 2023, of the Special Mention loans and Substandard loans represe
Slide 8: Quarterly Credit Trends (2 of 2)
. . .Quarterly Credit Trends (2 of 2) 8 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans NCOs / (Recoveries) and Provision for Credit Loss Expense ($’000) 0.14% 0.55% Q3-22 0.12% 0.57% Q4-22 0.10% 0.60% Q1-23 0.10% 0.61% Q2-23 0.09% 0.63% Q3-23 0.69% 0.69% 0.70% 0
Slide 9: Track Record of Strong Credit Performance
. . . COVID-19 Pandemic Track Record of Strong Credit Performance 9 From 2006 to 2022, inclusive of the Global Financial Crisis, Hurricane Sandy, and the COVID-19 Pandemic, OCFC’s CRE NCO to average CRE loans totaled 6 bps per year compared to 81 bps for all commercial banks between $10 - $50 bill
Slide 10: Deposit Trends
. . .Deposit Trends 10 (1) Deposit beta is calculated as the increase in rate paid on total deposits per quarter divided by the incremental increase in the fed funds rate since January 1, 2022. Deposits (excl. brokered CDs) increased by 9% from the linked quarter. High yield savings grew by $328
Slide 11: ~84% of Deposits Are Insured/Collateralized, Long Tenured, and Granular
. . .~84% of Deposits Are Insured/Collateralized, Long Tenured, and Granular 11 OCFC’s deposit composition is extremely granular with 98% of all deposit accounts by number less than $250K. OCFC customers have long tenured relationships with an average age of 9 years. The median age of a deposit
Slide 12: Net Interest Income and Net Interest Margin Trends
. . .Net Interest Income and Net Interest Margin Trends 12 (1) Core NIM excludes purchase accounting and prepayment fee income. Refer to the Earnings Release for additional information. Core NIM1 vs NIM NIM Bridge 0.01 Q2-23 NIM -0.08 Ordinary course rate impacts Quarter-specific impacts (PA accreti
Slide 13: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 13 Core Non-Interest Expense1 ($’000) 42,331 45,711 45,981 47,610 49,910 13,937 11,111 13,108 12,923 11,873 2,397 2,777 Q3-22 2,1282,519 59,045 Q1-23Q4-22 Q2-23 2,701 Q3-23 59,341 61,217 62,930 64,484 Other Core Non-Int ExpTriden
Slide 14: Generating Consistent Returns
. . .Generating Consistent Returns 14 Book Value and Tangible Book Value per Common Share ($)1 Core ROAA1, ROTE1, and ROTCE1 • Tangible book value per common share increased by $1.63 (or 10%) compared to the same quarter last year. • Capital ratios remain above "well-capitalized" levels even if the
Slide 15: Leading TBV Growth Supported by Prudent Liquidity Management
. . .Leading TBV Growth Supported by Prudent Liquidity Management 15 Tangible Book Value per Share Growth (Q2-22 to Q2-23)(1) (1) Peers include those companies defined in definitive proxy statement filed April 21, 2023. Excludes Investors Bancorp due to the sale to Citizens Financial Group. 11.0 -5%
Slide 16: Management 2023 Outlook – Update
. . .Management 2023 Outlook – Update 16 Loans Deposits Operating Expenses Net Interest Margin Capital • Continued focus on credit risk management, anchored by our diversified CRE portfolio that has performed well in market downturns • Maintain loan-to-deposit ratio ~100% for remainder of the year •
Slide 17: Appendix
. . . I N V E S T O R P R E S E N T A T I O N 17 Appendix
Slide 18: CBD Office Concentration Exposure Is Moderate
. . .CBD Office Concentration Exposure Is Moderate Office Portfolio Central business district loans comprised 1% of total assets and have a weighted average LTV of 53.0% and weighted average DSCR of 1.85. Criticized and classified office loans totaled 2% of total office loans. 18 CBD Office Port
Slide 19: Liquidity Sources are Robust and Diverse
. . .Liquidity Sources are Robust and Diverse 19 Liquidity remains robust: Adjusted uninsured deposits accounted for 16% of total deposits. Cash held on balance sheet totaled $304 million(1). OCFC had no outstanding borrowings from the Federal Reserve Discount Window or Bank Term Funding Progr
Slide 20: High Quality and Low Risk Investment Portfolio
. . .High Quality and Low Risk Investment Portfolio 20 Unrealized gain on AFS debt securities of $2 million in Q3-23 ($8 million in the YTD period). Portfolio remains high quality and investment grade with 83% rated AAA or AA. Total duration on the investment portfolio totaled 4 years. Investm
Slide 21: Customer Base Values Operational Support
. . .Customer Base Values Operational Support Deposit base is highly operational and values individualized service and support. OCFC customers initiated over 43 million total transactions in 2022 for over $100 billion, turning over our September 30, 2023 deposit balance ~10 times per year. 13.6% 30.
Slide 22: Adjusted Uninsured Deposit Bridge Detail
. . .Adjusted Uninsured Deposit Bridge Detail 22 Note #1: Uninsured deposits are reported at the consolidated Bank level per the Call Report. (1) The State of NJ requires collateralization on municipal deposits and administers a backstop to protect these deposits. (2) Gross exclusions relate to inte
Slide 23: Non-GAAP Reconciliations (1 of 2)
. . .Non-GAAP Reconciliations (1 of 2) (1) The sale of specific positions in two financial institutions impacted both equity investments and debt securities for the three months ended March 31, 2023. On the Consolidated Statements of Income, the losses on sale of equity investments and debt securiti
Slide 24: Non-GAAP Reconciliations (2 of 2)
. . .Non-GAAP Reconciliations (2 of 2) Non-GAAP Reconciliation #039;000 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Tangible Equity Total stockholders' equity 1,637,604 1,626,283 1,610,371 1,585,464 1,540,216 Less: Goodwill 506,146 506,146 506,146 506,146 506,14