Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (November 2015)
32 slides from Oceanfirst Financial's investor presentation, Nov 3, 2015
Slide 1: OceanFirst Financial Corp. Investor Presentation November 2015
OceanFirst Financial Corp. Exhibit 99.1 Investor Presentation November 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 Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company
Slide 3: OceanFirst Milestones – 113 Years of Growth
OceanFirst Milestones – 113 Years of Growth 3 Established Trust and Asset Management Founded, Point Pleasant, NJ Established Commercial Lending Rebuilt Capital To 9.5% Through Secondary Stock Offering IPO To Mutual Depositors Repurchased 62% Of Original IPO shares OceanFirst Foundation Passes $25 mi
Slide 4: Serving Central New Jersey Market
Serving Central New Jersey Market Community Bank serving the Central Jersey market - $2.6 billion in assets and 27 branch offices Targeting growth opportunities in Monmouth, Mercer and Middlesex Counties Market Cap $333 million *Includes New York – Newark NY-NJ-PA-CT CSA and Philadelphia – Reading –
Slide 5: Experienced Leadership
Name Position # of Years at OCFC # of Years In Banking Previous Experience Christopher D. Maher President, Chief Executive Officer 2 27 Patriot National Bancorp; Dime Community Bancshares Michael J. Fitzpatrick Executive Vice President, Chief Financial Officer 23 34 KPMG Joseph R. Iantosca Executive
Slide 6: Deep Bench of Experienced Executives
Deep Bench of Experienced Executives Name Position # of Years at OCFC # of Years In Banking Previous Experience Craig C. Spengeman Executive Vice President, Director of Wealth Management 2 38 PGB Trust and Investments (Division of Peapack-Gladstone Bank) Margaret Lanning First Senior Vice President,
Slide 7: Our Strategy
Our Strategy Currently positioned as the leading Community Bank in Central New Jersey Expanding into Monmouth, Mercer and Middlesex Counties Developing the franchise Growing revenue Creating additional value for shareholders Strategically focused on revenue growth in commercial lending, wealth manag
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 (Canada) 22 2,547,306 16.84 2 Hudson City Savings Bank (NJ)(1) 14 1,988,785 13.15 3 Wells Fargo Bank (CA) 26 1,961,487 12
Slide 9: Strategic Deposit Composition Transition
Strategic Deposit Composition Transition Time Deposits* *Time deposits duration of 19 months WAR 0.12% Total Cost of Deposits 0.25% 87% Transaction Deposits
Slide 10: Strategic Focus on Commercial Lending Drives Business Checking
Strategic Focus on Commercial Lending Drives Business Checking 9/30/15
Slide 11: Mobile Banking and Digital Services
Mobile Banking Added mobile deposit capture in 2013, TouchID in April 2015 and Apple Watch in October 2015. More than 14,000 depositors use mobile, text or smart phone apps monthly. Online Banking & Bill Pay In 2014, 42% of depositors used online banking and an average of 34,000 bills were paid with
Slide 12: Strategic Loan Composition Transition
Strategic Loan Composition Transition C&I (1) (1)Commercial loan (CRE and C&I) duration of 2.7 years. (42.3%)
Slide 13: OceanFirst Maintains Significantly More Conservative CRE Portfolio Relative to Peers
OceanFirst Maintains Significantly More Conservative CRE Portfolio Relative to Peers Domestic CRE Loans (Construction, Multifamily and Non-Owner-Occupied Non-residential Properties) to Total Risk Based Capital. Supervisory guideline is 300% of TRBC. Peer group contains: UVSP, WSFS, BMTC, FLIC, SUBK,
Slide 14: Credit Underwriting Remains Conservative: Commercial Loan Production
Credit Underwriting Remains Conservative: Commercial Loan Production 2014 and 2015 (Dollars in thousands) 2014 Total Commercial Loan Originations Nine Months Ended September 30, 2015 Total Commercial Loan Originations Total Portfolio at September 30, 2015 Amount $243,858 $191,851 $933,442 Weighted a
Slide 15: Highlights – Third Quarter 2015
Highlights – Third Quarter 2015 Completed the acquisition of Colonial American Bank on July 31, 2015, which added $142.4 million to assets, $121.2 million to loans, and $123.3 million to deposits Grew commercial loan portfolio (excluding Colonial) $41.8 million, 20.7% annualized A new commercial len
Slide 16: Highlights – Risk Management
Highlights – Risk Management Over the past year through September 30, 2015: Interest Rate Risk Management Extended $50 million of FHLB advances into 3 – 5 year terms $84.9 million total increase in non-interest bearing deposits which now represent 18.4% of total deposits Core deposits(1) are 86.8% o
Slide 17: Credit Metrics Reflect Conservative Culture
Credit Metrics Reflect Conservative Culture Data as of December 31, unless otherwise indicated. Net charge-off ratio for 2014 excludes charge-off related to bulk sale of non-performing residential and consumer mortgage loans. Including this charge-off, the ratio is 0.45%. Ratio for 2015 is annualize
Slide 18: OceanFirst Charge-Offs Are 44% Below Peer Average
Peer group contains: BMTC, DCOM, FLIC, HUVL, LBAI, ORIT, PGC, SUBK, UVSP, WSFS. (FFIC excluded due to lack of data during full time period). Source: FDIC Statistics on Depository Institutions. ~ ~ OceanFirst Charge-Offs Are 44% Below Peer Average 18
Slide 19: Prudently Provisioning for Credit Costs
Prudently Provisioning for Credit Costs Higher 2011 charge-offs were due to a change in charge-off policy to recognize the charge-off when the loan is deemed uncollectible rather than when the foreclosure process is complete. 12/31/09 12/31/10 12/31/11(1) 12/31/12 12/31/13 12/31/14 9/30/15 Annualize
Slide 20: Net Interest Margin Stabilized at Historical Levels
Net Interest Margin Stabilized at Historical Levels Quarterly Trend Historical Average Net Interest Margin (3.28%)
Slide 21: Diversified Streams of Non-Interest Income
Diversified Streams of Non-Interest Income $2.5M $16.4M Targeted Growth Areas Non-Interest Income excludes gain/loss from other real estate operations, gain on sale of securities and gain on sale of loan servicing.
Slide 22: Generating Consistent Attractive Returns
Generating Consistent Attractive Returns (1)For 2013, excludes after-tax impact of $3.1 million in non-recurring charges related to strategic advance restructuring and branch consolidation and for 2015, excludes non-recurring merger related expenses. (1) 0.0% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40
Slide 23: Prudently Managing Excess Capital in Near Term
Prudently Managing Excess Capital in Near Term Notes: Stock Repurchases – $15.32 Average Cost per Share. Quarterly dividend rate increased by $0.01, or 8.3%, in October 2014. (Nine Months)
Slide 24: Growing Revenue and Building Shareholder Value
Growing Revenue and Building 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 nine consecutive quarters Superstorm San
Slide 25: Colonial American Bank Acquisition Supports Retail Expansion in High Value Communities
Colonial American Bank Acquisition Supports Retail Expansion in High Value Communities 100% Stock deal, valued at $11.9 million In-Market acquisition supports growth objective in towns of Middletown and Shrewsbury, NJ Favorable financial terms (adjusted for DTA realization of $2.3 million) Price/Tan
Slide 26: Why OCFC…?
Why OCFC…? Fundamental franchise value Superior deposit profile Conservative credit culture Consistent commercial loan and deposit growth Solid financial performance Strong balance sheet and capital base Seasoned and effective management team Substantial insider ownership – aligned with shareholders
Slide 27: Attractive Valuation Metrics
Attractive Valuation Metrics Valuation Price / Tang. Book Value 143% 163% Price / LQA EPS 17.2x 16.3 x Price / Estimated EPS 15.1x 16.1x Core Deposit Premium 5.3% 8.9% Cash Dividend Yield 2.7% 2.8% OCFC Peers(1) 1) Peers include: BMTC, DCOM, FFIC, FLIC, LBAI, ORIT, PGC, SUBK, UVSP and WSFS Note: Fin
Slide 28: Appendix
Appendix
Slide 29: Market Demographics
Market Demographics Ocean Monmouth Middlesex Mercer National Number of Offices 19 5 1 % of OceanFirst Deposits 83.6 13.6 2.8 Market Rank 4 16 35 Market Share (%) 9.8 1.0 0.2 Population 590,000 629,000 845,000 373,000 Projected 2016-2021 Population Growth (%) 2.2 0.6 3.3 1.6 3.7 Median Household Inco
Slide 30: Commercial Portfolio Metrics
Commercial Portfolio Metrics APPENDIX 2 Commercial Real Estate (CRE) Total portfolio $804.1 million % of Total Loan Portfolio 41.1% Average size of CRE loans $873,000 Largest CRE loan $20.0 million Current Pipeline $37.1 million Weighted Average Yield 4.02% Weighted Average Repricing Term 5.3 years
Slide 31: Commercial Portfolio Segmentation
Commercial Portfolio Segmentation APPENDIX 2 (Cont’d) Total Commercial Loan Exposure by Industry Classification Real Estate Investment by Property Classification Diversified portfolio provides protection against industry-specific credit events. As of September 30, 2015.
Slide 32: Residential Portfolio Metrics
Residential Portfolio Metrics APPENDIX 3 Residential Real Estate Total Portfolio $827.0 million % of Total Loan Portfolio 42.3% Average size of mortgage loans $197,000 % of loans for second homes 12.0% Portfolio weighted average loan-to-value ratio (using original or most recent appraisal) - Loans o
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