Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (September 2021)
41 slides from Oceanfirst Financial's investor presentation, Sep 7, 2021
Slide 1: OceanFirst Financial Corp. Investor Presentation September 2021
. . . OceanFirst Financial Corp. Investor Presentation September 2021 Exhibit 99.1
Slide 2: Forward Looking Statements
. . . Forward Looking Statements In addition to historical information, this presentation/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, strategies and ex
Slide 3: OceanFirst Financial Corp. at a glance
. . . . . . S E P T E M B E R | 2 0 2 1 I N V E S T O R P R E S E N T A T I O N • NASDAQ: OCFC • Market Cap: $1.28 billion1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Total Assets of $11.5 billion2 • 58 Full-Service Branches in New Jersey and Metropolitan New York City2
Slide 4: Investment Thesis – Well Positioned for the Post-COVID-19 Environment
. . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Strength of Balance Sheet • Balance sheet de-risked with executed loan sales, resolution of substantially all full forbearance loans, and extinguishment of high-cost borrowings • Low-Cost and Durable Deposit Base • Cost of
Slide 5: Second Quarter 2021 Results
. . . I N V E S T O R P R E S E N T A T I O N 5 Second Quarter 2021 Results Financial Results • Net interest margin of 2.89% • Loan originations of $447 million in Q21 • Record loan pipeline of $629 million at June 30, 2021 • Total deposit costs decreased by 10 bps from Q1 to 27 bps Strategic and Op
Slide 6: Net Interest Margin
. . . 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net Interest Margin2 Fed Funds Effective Rate OceanFirst Bank Peer Group Average Operational Highlights • Non-interest-bearing deposits are 26% of average balance of total deposits1 •
Slide 7: Deposit Growth with Branch Consolidation
. . . I N V E S T O R P R E S E N T A T I O N 7 Deposit Growth with Branch Consolidation Strength and Durability of Low- Cost Deposit Position: • $162 million average branch size as of June 30, 2021, doubling in size over the past 5 years • Core deposits represent 90%2 of total deposits, with a cost
Slide 8: Loan Composition Emphasizes Commercial
. . . I N V E S T O R P R E S E N T A T I O N 8 Loan Composition Emphasizes Commercial1 . . . 1 All periods as of December 31, except 2021 which is as of June 30 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 2021 2020 2019 2018 2017 2016 Total Loans Outstanding Residential Home E
Slide 9: Generating Consistent & Attractive Returns
. . . 0.00% 0.15% 0.30% 0.45% 0.60% 0.75% 0.90% 1.05% 1.20% 1.35% 1.50% 2016 2017 2018 2019 2020 2021 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Co re R et ur n on T an gi bl e St oc kh ol de rs ’ E qu ity Core Return on Tangible Stockholders' Equity Core Return on Assets 1, 3 1 I N V E S T O
Slide 10: Credit Metrics Reflect Conservative Culture
. . . I N V E S T O R P R E S E N T A T I O N 10 Credit Metrics Reflect Conservative Culture No n- Pe rfo rm in g Lo an s as P er ce nt o f T ot al L oa ns Re ce iva bl e 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 2016 2017 2018 2019 2020 2021 Residential Consumer Commercial Real Estate Commercial &
Slide 11: Asset Growth Supplemented by Strategic M&A
. . . I N V E S T O R P R E S E N T A T I O N 11 Asset Growth Supplemented by Strategic M&A Opportunistic Acquisitions of Local Community Banks 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,
Slide 12: Northeast and Mid-Atlantic Expansion Opportunities
. . . I N V E S T O R P R E S E N T A T I O N 12 . . . S E P T E M B E R | 2 0 2 1 Northeast and Mid-Atlantic Expansion Opportunities • New Jersey is an attractive market1 • Statewide total population of 9.3 million • Most densely populated state • 11th most populous state • Median household income
Slide 13: Regional Opportunities for M&A
. . . I N V E S T O R P R E S E N T A T I O N 13 Regional Opportunities for M&A Regional banking data as of June 30, 2020 Source: FDIC New York City Metro Area • 4 Banks with Assets Between $400 million and $1 billion • 7 Banks with Assets Between $1 billion and $10 billion New Jersey • 11 Banks wit
Slide 14: Continuous Investment in Talent and Technology
. . . Nest Egg AUM/A: $130 million2 2015 FTE 2021 FTE Continuous Investment in Talent and Technology • Funded from ongoing earnings and branch consolidations Digital Transformation I N V E S T O R P R E S E N T A T I O N 14 7 84 Paperless Residential Loan Applications (Blend) Best Rated Digital Bank
Slide 15: Digital Capabilities & Customer Ratings
. . . Digital Capabilities & Customer Ratings I N V E S T O R P R E S E N T A T I O N Source: iTunes App and Google App as of July 6th, 2021Source: S&P Global 2020 US Mobile Banking Report 14 12 11 11 OceanFirst National / Regional FinTechs / Digital Large MidAtlantic Mobile Capabilities Survey (# o
Slide 16: Digital Customer Acquisition
. . . Digital Customer Acquisition I N V E S T O R P R E S E N T A T I O N 16 Attaining Scale… … And Attracting Valuable Customers . . . Customer Usage Statistics2 Online Branch Digital Usage 85% 72% Mobile Usage 68% 55% Direct Deposits / Month 2.66 1.91 Mobile Deposits / Month 0.40 0.27 Debit Card
Slide 17: Treasury Management Services
. . . 1 As of June 30, 2021 Treasury Management Solutions: • ACH Origination, Receipts, Addenda Reporting and Debit Blocking • Digital Account Opening • Accept Multiple Forms of Payment • Account Analysis Statements • Business Online Banking • Coin & Currency Ordering • Commercial Card • Investment
Slide 18: Protecting Our Clients with Cyber Security
. . . I N V E S T O R P R E S E N T A T I O N 18 Protecting Our Clients with Cyber Security • Remains current with evolving industry-wide standards and threat environment • Real-time analytical tools in place for fraud protection and cybersecurity • Use of top tier, neural-based, real-time debit car
Slide 19: Strategic Capital Allocation Generates Shareholder Returns
. . . $0 $10 $20 $30 $40 $50 $60 $70 $80 2016 2017 2018 2019 2020 2021 Returned Capital to Shareholders Cash Dividends Share Repurchases Annualized I N V E S T O R P R E S E N T A T I O N 19 Strategic Capital Allocation Generates Shareholder Returns An nu al R et ur n of C ap ita l ( $ M illi on s)
Slide 20: An Experienced Management Team
. . . I N V E S T O R P R E S E N T A T I O N 20 An Experienced Management Team Executive Title Years at OceanFirst1 Selected Experience Christopher D. Maher Chairman, Chief Executive Officer 8 Patriot National Bancorp Dime Community Bancshares Joseph J. Lebel III President, Chief Operating Officer
Slide 21: OceanFirst Foundation: Serving Our Communities
. . . I N V E S T O R P R E S E N T A T I O N 21 OceanFirst Foundation: Serving Our Communities • Over $43 million has been granted to organizations serving OceanFirst’s market • Provided $250,000 in grants dedicated to assisting the non-profit organizations helping our neighbors during the coronavi
Slide 22: Investment Thesis – Well Positioned for the Post-COVID-19 Environment
. . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Strength of Balance Sheet • Balance sheet de-risked with executed loan sales, resolution of substantially all full forbearance loans, and extinguishment of high-cost borrowings • Low-Cost and Durable Deposit Base • Cost of
Slide 23: Investor Relations Inquiries
. . . Investor Relations Inquiries Jill A. Hewitt Senior Vice President, Director of Investor Relations & Corporate Communications jhewitt@oceanfirst.com (732) 240-4500, ext. 7513 23
Slide 24: Appendix
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Slide 25: Favorable Competitive Position
. . . Favorable Competitive Position I N V E S T O R P R E S E N T A T I O N 25 Institution # of Branches Dep. In Mkt. ($000) TD Bank (Canada) 151 33,278,985 Wells Fargo (CA) 178 32,317,778 PNC Bank (PA) 168 28,781,019 Bank of America (NC) 139 26,112,590 JP Morgan Chase (NY) 99 11,930,399 OceanFirst
Slide 26: Credit Costs Consistently Lower than Peer Group
. . . Credit Costs Consistently Lower than Peer Group I N V E S T O R P R E S E N T A T I O N 26 . . . Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through June 30, 2021 Note: Peer Group 2 - Commercial Banks between $10 billion and $100 bil
Slide 27: 2007 to 2021 Cumulative Credit Losses Also Outperform
. . . 2007 to 2021 Cumulative Credit Losses Also Outperform I N V E S T O R P R E S E N T A T I O N 27 . . . Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through June 30, 2021 Note: Peer Group 2 - Commercial Banks between $10 billion and $1
Slide 28: 2007 to 2021 Cumulative Losses By Segment
. . . 2007 to 2021 Cumulative Losses By Segment I N V E S T O R P R E S E N T A T I O N 28 . . . Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through June 30, 2021 1 Peer Group 2 - Commercial Banks between $10 billion and $100 billion in as
Slide 29: Effective Interest Rate Risk Management
. . . 1 As of June 30, 2021 2 Total deposits excluding time deposits Duration Rate Characteristics All asset categories managed with limited duration Effective Interest Rate Risk Management1 29 I N V E S T O R P R E S E N T A T I O N . . . 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Securities Mortgage Loan
Slide 30: OceanFirst Milestones – 119 Years of Growth
. . . Commercial Expansion into Baltimore/D.C. OceanFirst Milestones – 119 Years of Growth I N V E S T O R P R E S E N T A T I O N 30 OceanFirst Foundation Exceeds $25M in Cumulative Grants Cape Bancorp Acquired IPO to Mutual Depositors Founded, Point Pleasant, NJ Sun Bancorp, Inc. Acquired Created
Slide 31: Q2 2021 Earnings Supplement
. . . Q2 2021 Earnings Supplement1 July 29, 2021 1 The Q2 2021 Earnings Supplement is for the purpose and use in conjunction with our Earnings Release furnished as Exhibit 99.1 to our Form 8-K on July 29, 2021.
Slide 32: Forward-Looking Statements
. . . In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These fo
Slide 33: Net Interest Margin – Quarter over Quarter
. . . 2.98% 2.79% 2.71% 2.75% 2.73% 3.24% 2.97% 2.97% 2.93% 2.89% Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Core NIM NIM 2.93% 2.89% 0.06% 0.03% 0.03% 0.04% 0.06% Q1-21 NIM Reduced excess liquidity Impact of prepayment fees Lower yield on PPP loans Purchase accounting impact Rate environment and other Q2-21 NIM
Slide 34: Credit Quality (1 of 3)
. . . 0.46% 0.70% 0.78% 0.76% 0.69% 0.42% 0.40% 0.36% 0.33% 0.30% 0.88% 1.10% 1.14% 1.09% 0.99% Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 ACL PCD Marks Credit Quality (1 of 3) 34 Loan Allowance for Credit Losses (ACL) Plus PCD Marks / Total Loans Net Charge-offs / (Recoveries) and Credit Loss Expense ($’000) 9,
Slide 35: Credit Quality (2 of 3)
. . . Stabilizing asset quality trends align with positive economic outlook and recovery of our local markets. 106,344 175,979 194,372 188,981 182,926 66,441 141,467 165,844 150,221 129,955 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Substandard Special Mention Credit Quality (2 of 3) 35 21,044 29,895 36,410 34,1
Slide 36: Credit Quality (3 of 3)
. . .Credit Quality (3 of 3) 36 Commercial vs Consumer ($’million)Loans Held-for-Investment by Payment Structure ($’million) ~ 98.3% of total loans comply with pre-COVID terms as of 6/30/21. 85% 50% 100% 95% 90% 80% 75% 55% 931 7,531 35 51 271 37 84131 22 7,691 Q3-20 158 321 6,920 Q2-21 7,479 Q4-20
Slide 37: Non-Interest Expense
. . .Non-Interest Expense 37 Core Non-Interest Expense ($’000) 42,003 43,463 42,838 40,838 40,752 9,072 9,338 10,215 9,453 10,446 51,075 52,801 53,053 50,291 51,198 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Other Core Non-Int Exp Technology Expense Core Efficiency Ratio • Core non-interest expense in Q2-21 excl
Slide 38: Equity and Performance
. . .Equity and Performance 38 14.79 14.58 14.98 15.26 15.58 24.47 24.21 24.57 24.84 25.22 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Tangible Book Value per Common Share Book Value per Share Book Value and Tangible Book Value per Common Share Core ROAA and ROTE • Strengthened balance sheet and increased tangibl
Slide 39: Appendix
Appendix @) OCEANFIRST
Slide 40: Quarterly Non-GAAP / Adjusted to GAAP Disclosure
. . .Quarterly Non-GAAP / Adjusted to GAAP Disclosure Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental Non-GAAP information, which consists of reported net income excludin
Slide 41: Non-GAAP Financial Information
. . .Non-GAAP Financial Information 41 • Refer to the Earnings Release for additional information. Non-GAAP Reconciliation For the Three Months Ended $'000 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Core Earnings: Net income (loss) available to common stockholder
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