Slide 1: 4Q 2022 Investor Presentation
. . . 1 The 4Q 2022 Investor Presentation should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on January 19, 2023. Exhibit 99.2 OceanFirst Financial Corp. 4Q 2022 Investor Presentation1 January 2023
Slide 2: Legal Disclaimer
. . .Legal Disclaimer FORWARD LOOKING STATEMENTS. In addition to historical information, 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, strateg
Slide 3: Strategic and Operational Focus
. . .Strategic and Operational Focus 3 Outstanding and Proven Growth Efficiency Cost Model Focused on Investment in Technology Efficient Funding Base and Competitive Spreads Strategic Capital Utilization Significant top-line revenue growth driven by robust loan growth. Optimized branch network by re
Slide 4: 2022 Financial Highlights
. . .2022 Financial Highlights 4 Performance Year-over-Year (1) Core metrics exclude merger related expenses, net branch consolidation expenses (benefit), net loss/gain on equity investments, and the income tax effect of these items, (collectively referred to as “non-core” items). TBV (tangible book
Slide 5: Proven Historical Net Interest Income and Loan Growth
. . .Proven Historical Net Interest Income and Loan Growth 5 76,829 120,262 169,218 240,502 255,971 312,951 305,338 377,477 2016 3.71% 3.46% 3.25% 2015 3.52% 2017 2018 3.62% 2019 3.16% 2020 2.93% 2021 3.37% 2022 Net Interest Margin Net Interest Income Peer Leading Net Interest Income Growth ($’000)
Slide 6: Successful Commercial Loan Growth and Geographic Diversification
. . .Successful Commercial Loan Growth and Geographic Diversification 6 49% 69% 2015 Q4-22 +20% (Commercial % of Loan Portfolio) Commercial Loans by Geography as of Q4-22 52% of commercial loans originated in Philadelphia and NY Emphasis on Commercial Increase of $5.8B in commercial loans since 2015
Slide 7: Balanced Approach to Deposit Pricing and Growth
. . .Balanced Approach to Deposit Pricing and Growth 7 Shift Toward Non-Interest Bearing Deposits ($’millions) 1,661 3,542 3,736 4,948 5,393 8,055 8,958 8,133647 607 866 936 1,373 775 1,542 2020 255 202120182015 2016 2017 2019 2022 1,916 4,189 4,343 5,814 6,329 9,428 9,733 9,675 CoreNon-Core (1) Cor
Slide 8: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 8 Core Non-Interest Expense1 ($’000) 43,126 42,802 41,721 42,331 45,711 13,971 12,326 12,992 13,937 11,111 Q1-22Q4-21 3,206 Q2-22 2,777 Q4-22 2,519 Q3-22 57,097 55,128 57,919 59,045 59,341 Trident Technology Expense Other Core No
Slide 9: Core Non-Interest Income: Expansion Opportunity
. . .Core Non-Interest Income ($’000)1 Expansion Opportunity 9 Q4-22 non-interest income included Trident operations, which generated $2.6 million of non-interest income in the quarter. We anticipate Trident run- rate fee income of $3 – $5 million per quarter. 656 731 784 873 745 1,323 2,781 2,294
Slide 10: Operational Efficiency
. . .Operational Efficiency 10 Deposits per Branch ($’millions) (56) bps2.39% 1.83% 2015 2022 Core Non-interest Expense1 to Total Avg. Assets 71 69 94 99 113 152 207 255 20182015 20222016 20212017 2019 2020 3.6x Operating Efficiency ($’millions) (1) Core metrics exclude merger related expenses, net
Slide 11: Growth in Net Interest Margin
. . .Growth in Net Interest Margin 11 Asset-sensitive balance sheet well-positioned for rising interest rates with 29% of the loan portfolio at 12/31/22 set to re-price. Average loan balances increased by $263 million from the linked quarter with a loan pipeline of $166 million at 12/31/22. Co
Slide 12: Generating Consistent and Attractive Returns
. . .Generating Consistent and Attractive Returns 12 Book Value and Tangible Book Value per Common Share ($)1 Core ROAA, ROTE1, and ROTCE1 • Tangible book value per common share increased by $0.78 (or 4.8%) per share compared to the linked quarter. • Announced and paid increased dividend by 18% to $
Slide 13: Business Model Strength Driving Significant Capital Return
. . .Business Model Strength Driving Significant Capital Return 13 $0.49 $1.01 $1.55 $2.15 $2.77 $3.45 $4.13 $4.81 $5.55 $0.55 $0.94 $1.04 $1.09 $1.39 $1.97 $2.25 $2.86 $2.98 $14.26 2013 $12.33 2014 $12.33 20202016 2018 $12.91 $17.08 $13.67 20222015 $12.94 2021 $13.58 $21.36 2017 $15.13 2019 $23.60
Slide 14: Appendix
. . . I N V E S T O R P R E S E N T A T I O N 14 Appendix
Slide 15: OCFC's Strong History of Credit Discipline
. . .OCFC’s Strong History of Credit Discipline 15 Global Financial Crisis Net Charge Offs (NCOs) / Avg. Loans (%) Hurricane Sandy (1) Source: S&P Global (2) Proxy and US Bank industry reporting is on a one quarter lag (3) Peer group disclosed in OCFC’s DEF-14A filed 4/26/22. This excludes (i) Inves
Slide 16: Conservative Credit Risk Profile
. . .Conservative Credit Risk Profile 16 0.21% 2021 0.03% 0.01% 2022 0.07% 0.08% 0.36% 0.35% 0.01% 0.10% 2016 2018 0.05% 0.02% 0.05% 0.11% 0.04% 2017 0.05% 0.12% 0.13% 0.31% 0.00% 0.29% 0.12% 2019 0.02% 0.30% 0.03% 0.11% 2020 0.00% 0.12% 0.47% 0.02% 0.00% 0.11% 0.06% 0.52% 0.22% 0.19 ResidentialComm
Slide 17: Quarterly Credit Trends (1 of 2)
. . .Quarterly Credit Trends (1 of 2) 17 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans Net Charge-offs (NCOs) / (Recoveries) and Credit Loss Expense (Benefit) ($’000) 0.57% 0.12% 0.22% 0.69% 0.56%0.57% Q4-21 0.18% 0.17% Q1-22 0.55% Q2-22 0.14% 0.55% Q3-22 Q4-22
Slide 18: Quarterly Credit Trends (2 of 2)
. . . Strong asset quality trends driven by prudent loan growth and credit decisioning. Quarterly Credit Trends (2 of 2) 18 Non-Performing Loans and Assets ($’000)1 Special Mention and Substandard Loans ($’000) Note: Of the $48.2 million in Special Mention loans and $50.8 million of Substandard loan
Slide 19: Asset Growth Supplemented by Strategic M&A
. . .Asset Growth Supplemented by Strategic M&A 19 ($ in millions) Target Closing Date Transaction Value Total Assets Colonial American Bank July 31, 2015 ~$12 million $142 million Cape Bancorp May 2, 2016 ~$196 million $1,518 million Ocean Shore Holding Co. November 30, 2016 ~$146 million $1,097 mi
Slide 20: Northeast and Mid-Atlantic Expansion Opportunities
. . .Northeast and Mid-Atlantic Expansion Opportunities1 20 • New Jersey is an attractive market. • Statewide total population of 9.3 million. • Most densely populated state. • 11th most populous state. • Median household income of $85,245. • Significant opportunities for acquisitions to build custo
Slide 21: Experienced Management Team with Banking Expertise
. . .Experienced Management Team with Banking Expertise 21 Substantial insider ownership of 11%2, including Directors, Executive Officers, ESOP and OceanFirst Foundation. Executive Title Years with OceanFirst1 Select Experience Christopher D. Maher Chairman & Chief Executive Officer 9 • Director of
Slide 22: Interest Rate Sensitivity (1 of 2)
. . .Interest Rate Sensitivity (1 of 2) 22 OceanFirst Bank’s balance sheet is asset-sensitive. An upward climb in rates should yield positive results in net interest income. Economic Value of Equity (EVE)1 - % ChangeEarnings at Risk (EAR)1 - % Change -5 0 5 10 15 14.3% +300 bps +100 bps 8.5% Base+
Slide 23: Interest Rate Sensitivity (2 of 2)
. . .Interest Rate Sensitivity (2 of 2) 23 Rate Characteristics 79% 91% 57% 46% 62% 90% 84% 21% 9% 43% 54% 38% 10% 16% Mortgage LoansSecurities Consumer Loans DepositsCommercial Loans (CRE & C&I) Total Assets (Weighted Avg) Borrowings Adjustable/Floating Core DepositsFixed Note: Data as of 12/31/22