Oceanfirst Financial Corp. · NASDAQ:OCFC

Oceanfirst Financial — Investor Presentation (February 2021)

37 slides from Oceanfirst Financial's investor presentation, Feb 3, 2021

  1. Slide 1: OceanFirst Financial Corp. Investor Presentation February 2021

    . . . OceanFirst Financial Corp. Investor Presentation February 2021 Exhibit 99.1

  2. Slide 2: Forward Looking Statements

    . . . 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, strategies and expectatio

  3. Slide 3: OceanFirst Financial Corp.

    . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $1.10 billion 1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Total Assets of $11.45 billion 2 • 62 Full-Service Branches in New Jersey and Metropolitan New York City I N V E S T O R P R E S E N T A T I O N 3 1

  4. Slide 4: Investment Thesis – Well Positioned for the Post-COVID-19 Environment

    . . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Strength of Assets • Balance sheet de-risked with executed loan sales, resolution of substantially all full forbearance loans, and extinguishment of high-cost borrowings • Organic Growth Including Low-Cost and Durable Depo

  5. Slide 5: Fourth Quarter 2020 Results

    . . . I N V E S T O R P R E S E N T A T I O N 5 Fourth Quarter 2020 Results Financial Results • Net interest margin of 2.97% • Loan pipeline of $368 million at December 31, 2020 • Total deposit costs decreased by 4 basis points from Q3 to Q4 • Creation of a yield-focused debt and equity portfolio wh

  6. Slide 6: Operational Highlights

    . . . Operational Highlights • Non-interest bearing deposits are 23% of average balance of total deposits 1 • Balanced interest rate risk position • An extraordinary surplus of liquidity will temporarily weigh on margins until the excess cash can be prudently deployed I N V E S T O R P R E S E N T A

  7. 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 • $152 million average branch size as of December 31, 2020, doubling in size over the past 5 years • Core deposits represent 85%2 of total deposits, with a c

  8. 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, 2020 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 2020 2019 2018 2017 2016 2015 Total Loans Outstanding Residential Home Equity & Consumer Investor CRE

  9. Slide 9: Generating Consistent & Attractive Returns

    . . . 2020 returns adversely impacted by COVID-19. De- risking of balance sheet positions the Bank for improved returns in 2021 0.00% 0.15% 0.30% 0.45% 0.60% 0.75% 0.90% 1.05% 1.20% 1.35% 1.50% 2015 2016 2017 2018 2019 2020 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% R e tu rn o n T a n g ib le

  10. 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 N o n -P e rf o rm in g L o a n s a s P e rc e n t o f T o ta l L o a n s R e ce iv a b le 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 2015 2016 2017 2018 2019 2020 Residential Consumer

  11. 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,

  12. Slide 12: New Jersey Expansion Opportunities

    . . . Headquarters OceanFirst Bank Branches OceanFirst Bank Loan Offices I N V E S T O R P R E S E N T A T I O N 12 New Jersey Expansion Opportunities • New Jersey is an attractive market 1 • Statewide Total Population of 8.9 million • Most densely populated state • 11th most populous state • Median

  13. 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

  14. Slide 14: Digital Banking Team: Continuous Investment in Talent and Technologies

    . . . Digital Banking Team Continuous Investment In Talent and Technologies • Funded from ongoing earnings and branch consolidations 2015 FTE 2020 FTE Best Rated Digital Bank in NJ!* Digital Customer Onboarding Team & Account Opening via Telephone $93 million Nest Egg Assets Milestone Artificial Int

  15. 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 January 8, 2021 4.8 4.5 4.5 4.6 4.0 OceanFirst National / Regional Large MidAtlantic FinTechs / Digital Proxy Peer Group Mobile App Customer Ratings (Apple & Google) Source:

  16. 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 . . . F E B R U A R Y | 2 0 2 1 Customer Usage Statistics* Online Branch Digital Usage 98.4% 75.1% Mobile Usage 78.4% 58.3% Direct Deposits / Month 2.4 1.9 Mobile Deposi

  17. Slide 17: Treasury Management Services

    . . . 1 Data as of December 31, 2020 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 •

  18. 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 • Real-time analytical tools in place for fraud protection and firewall security • Use of top tier, neural-based, real-time debit card fraud analytics •

  19. Slide 19: Strategic Capital Allocation Generates Shareholder Returns

    . . . 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 A n n u a l R e tu rn o f C a p it a l ($ M il li o n s ) Total Cash Returned to Shareholders: $222.7 million $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 2014 2015 2016 2017 2018 201

  20. 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 7 Patriot National Bancorp Dime Community Bancshares Joseph J. Lebel III President, Chief Operating Officer

  21. 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 $42 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

  22. Slide 22: Investment Thesis – Well Positioned for the Post-COVID-19 Environment

    . . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Strength of Assets • Balance sheet de-risked with executed loan sales, resolution of substantially all full forbearance loans, and extinguishment of high-cost borrowings • Organic Growth Including Low-Cost and Durable Depo

  23. 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

  24. Slide 24: Appendix

    O oceanFinst Appendix ©

  25. 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

  26. 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 Strong credit performance yields low net charge offs through the cycle. . . . Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through September 30

  27. Slide 27: 2007 to 2020 Cumulative Credit Losses Also Outperform

    . . . 2007 to 2020 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 . . . F E B R U A R Y | 2 0 2 1 Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through September 30, 2020 Note: Peer Group 2 - Commercial B

  28. Slide 28: 2007 to 2020 Cumulative Losses By Segment

    . . . 2007 to 2020 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 . . . F E B R U A R Y | 2 0 2 1 Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through September 30, 2020 1 Peer Group 2 - Commercial Banks between $10

  29. Slide 29: Effective Interest Rate Risk Management

    . . . As of December 31, 2020 Duration Rate Characteristics All asset categories managed with limited duration Effective Interest Rate Risk Management 29 I N V E S T O R P R E S E N T A T I O N . . . F E B R U A R Y | 2 0 2 1 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Mortgage Loans Consumer Loans Commerci

  30. Slide 30: OceanFirst Milestones – 119 Years of Growth

    . . . Crossed $10 billion threshold Two River Bancorp Acquired 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 Founded, Point Pleasant, NJ Established Trust and Asset Management Colonial American Bank Acquired IPO to Mutual Depositors Branch Expansion into Midd

  31. Slide 31: 4Q-20 Earnings Supplement

    . . . 4Q-20 Earnings Supplement1 January 28, 2021 1 The 4Q-20 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 January 28, 2021.

  32. Slide 32: Net Interest Margin – Quarter over Quarter

    . . . 3.25% 3.26% 2.98% 2.79% 2.71% 3.48% 3.52% 3.24% 2.97% 2.97% Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Core NIM NIM 2.97% 2.97% 0.09% 0.07% 0.01% 0.14% 0.03% Q3-20 NIM Lower average balance on PPP loans Purchase accounting impact Prepayment fee impact Excess liquidity Rate environment Q4-20 NIM Core NIM vs

  33. Slide 33: Credit Quality (1 of 3)

    . . . 0.34% 0.37% 0.46% 0.70% 0.78% 0.49% 0.49% 0.42% 0.40% 0.36% 0.82% 0.86% 0.88% 1.10% 1.14% Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 ACL Credit Marks Credit Quality (1 of 3) 33 355 9,969 9,649 35,714 4,072 139 1,154 (232) 14,995 2,942 0.01% 0.06% 0.00% 0.71% 0.15% Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Credit loss

  34. Slide 34: Credit Quality (2 of 3)

    . . . 73,178 87,365 106,344 175,979 194,372 34,529 48,697 66,441 141,467 165,844 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Substandard Special Mention Credit Quality (2 of 3) 34 17,849 16,263 21,044 29,895 36,410 264 484 248 106 106 0.29% 0.21% 0.25% 0.37% 0.47% 0.22% 0.16% 0.19% 0.84% 0.32% Q4-19 Q1-20 Q2-20 Q

  35. Slide 35: Credit Quality (3 of 3)

    . . .Credit Quality (3 of 3) 35 Commercial vs Consumer ($’million)Loans Held-for-Investment by Payment Structure ($’million) ~ 97.1% of total loans are in compliance with pre-COVID terms as of 12/31/20. 75% 90% 50% 55% 100% 95% 85% 80% 35 Q1-20 321 6,182 31 Q4-19 65 7,809 1,152 271 Q2-20 44 7,479 Q3

  36. Slide 36: Non-Interest Expense

    . . .Non-Interest Expense 36 Core Non-Interest Expense ($’000) 19,797 21,790 23,140 23,789 25,730 22,518 29,885 27,935 29,012 27,323 42,315 51,675 51,075 52,801 53,053 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Other Core Non-Int Exp Compensation & Employees Benefits Core Efficiency Ratio • $4.5 million for the

  37. Slide 37: Equity and Performance

    . . .Equity and Performance 37 15.13 14.62 14.79 14.58 14.98 22.88 23.38 24.47 24.21 24.57 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Tangible Book Value per Share Book Value per Share Book Value and Tangible Book Value per Share 1.25% 1.05% 0.81% -0.01% 0.78% 13.53% 12.25% 9.69% -0.11% 9.71% Q4-19 Q1-20 Q2-20 Q

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