Oceanfirst Financial Corp. · NASDAQ:OCFC

Oceanfirst Financial — Q4 2023 Earnings Presentation

20 slides from Oceanfirst Financial's earnings presentation, Jan 18, 2024

1. Slide 1: 4Q 2023 Earnings Release Supplement

   . . . 1 The 4Q 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 January 18, 2024. Exhibit 99.2 OceanFirst Financial Corp. 4Q 2023 Earnings Release Supplement1 January 2024

2. 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

3. Slide 3: Q4-23 Financial Highlights

   . . .Q4-23 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. (2) Estimated. Financial Highlights $0.45 Core Diluted EPS 1 $88 million Net Interest Income 0.77% Core ROAA 1 9

4. 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

5. 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 single-digit annualized growth in 2024. ▪ Loan yields continue to improve. 5,172 5,297 5,320 5,334 5,354 997 986 982 957 944 622 622 620 652 666 2,862 2,882

6. Slide 6: Credit Quality

   . . .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

7. 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 ($’000)1 Special Mention and Substandard Loans ($’000) Note: At December 31, 2023, of the Special Mention loans and Substandard loans represented

8. 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) 0.12% 0.57% Q4-22 0.10% 0.60% Q1-23 0.10% 0.61% Q2-23 0.09% 0.63% Q3-23 Q4-23 0.69% 0.70% 0.71% 0.72% 0.73% 0

9. 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

10. 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. ▪ Non-maturity deposits increased by $109 million (or 1%) from the linked quarter. ▪ High yield savings gr

11. Slide 11: Net Interest Income and Net Interest Margin Trends

    . . .Net Interest Income and Net Interest Margin Trends 11 (1) Core NIM excludes purchase accounting and prepayment fee income. Refer to the Earnings Release for additional information. Core NIM1 vs NIM NIM Bridge Q3-23 NIM -0.08 Rate environment, change in balances and funding mix, and other -0.01

12. Slide 12: Core Efficiency Ratio: Expense Discipline and Focused Investment

    . . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 12 Core Non-Interest Expense1 ($’000) 7,990 7,852 8,629 8,411 7,999 4,697 5,098 5,083 5,258 2,858 4,629 6,154 6,165 6,086 6,430 1,924 1,749 2,465 2,557 2,723 6,158 6,444 6,366 6,638 6,390 33,943 33,920 34,222 35,534 32,126 Q4-22

13. Slide 13: Generating Consistent Returns

    . . .Generating Consistent Returns 13 Book Value and Tangible Book Value per Common Share ($)1, 2 Core ROAA1, ROTE1, and ROTCE1 • Tangible book value per common share increased by $1.27 (or 7%) compared to the same quarter last year. • We have an outstanding share repurchase authorization totaling 2

14. Slide 14: Management 2024 Outlook

    . . .Management 2024 Outlook 14 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 the entire year. • Accounts for

15. Slide 15: Investor Presentation Appendix

    . . . I N V E S T O R P R E S E N T A T I O N 15 Appendix

16. Slide 16: CBD Office Concentration Exposure Is Moderate

    . . .CBD Office Concentration Exposure Is Moderate 16 CBD Office Portfolio by Geography 13% 36% 33% 18% New York City Newark Boston Philadelphia Central Business District (CBD) - Office #039;millions Book Balance % of Total WA LTV WA DSCR Credit Tenant 44 35.6% 61.3 1.79 Office 42 33.8% 56.2 2.02 Life

17. Slide 17: Northeast Outperforms Through Credit Cycles

    . . . COVID-19 Pandemic Northeast Outperforms Through Credit Cycles… 17 ▪ Historically, net charge-offs for Northeastern headquartered banks have greatly outperformed major exchange traded U.S. banks headquartered in other regions ▪ Median net charge-offs / average assets for Northeastern banks aver

18. Slide 18: Similar Story in Commercial Real Estate Portfolios

    . . . COVID-19 Pandemic Global Financial Crisis Hurricane Sandy …With a Similar Story in Commercial Real Estate Portfolios 18 ▪ Northeastern banks’ CRE portfolio net charge-offs have also historically outperformed major exchange traded banks in other regions ▪ Median CRE net charge-offs / average as

19. Slide 19: 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

20. Slide 20: Non-GAAP Reconciliations (2 of 2)

    . . .Non-GAAP Reconciliations (2 of 2) Non-GAAP Reconciliation #039;000 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Tangible Equity Total stockholders' equity 1,661,945 1,637,604 1,626,283 1,610,371 1,585,464 Less: Goodwill 506,146 506,146 506,146 506,146 506,146

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