Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (February 2016)
39 slides from Oceanfirst Financial's investor presentation, Feb 18, 2016
Slide 1: Investor Presentation February 2016
OceanFirst Financial Corp. Exhibit 99.1 Investor Presentation February 2016
Slide 2: Forward-Looking Statements
OceanFirst Financial Corp. 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, stra
Slide 3: OceanFirst Milestones – 114 Years of Growth
OceanFirst Milestones – 114 Years of Growth 3
Slide 4: Serving Central and Southern New Jersey Market
Serving Central and Southern New Jersey Market Community Bank serving the Central Jersey market - $2.6 billion in assets and 27 branch offices Market Cap $297.9 million OceanFirst Headquarters Retail Branches, Commercial Loan Production Offices, and Wealth Management Office 30 million people, or app
Slide 5: Experienced Leadership
Experienced Leadership Name Position # of Years at OCFC # of Years In Banking Previous Experience Christopher D. Maher President, Chief Executive Officer 3 28 Patriot National Bancorp; Dime Community Bancshares Michael J. Fitzpatrick Executive Vice President, Chief Financial Officer 23 34 KPMG Josep
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 and Southern New Jersey Expanding into Monmouth, Mercer and Middlesex Counties and Southern New Jersey Developing the franchise, including strategic acquisitions Growing revenue Creating additional value for shareholders Grow
Slide 8: Highlights – 2015
Highlights – 2015 Completed the acquisition of Colonial American Bank on July 31, 2015, which added $142.4 million to assets, $121.5 million to loans, and $123.3 million to deposits On January 5, 2016, announced the acquisition of Cape Bancorp valued at $208.1 million; expected to close in the summe
Slide 9: Branch Map and Cape Bancorp Acquisition Overview
Branch Map ¹ Financial data as of or for the period ending September 30, 2015; Dollars in Millions. - Cape Bank Branches Metro Philadelphia ¹ Loans: 36.6% Deposits: 10.7% West New Jersey ¹ Loans: 19.8% Deposits: 35.2% Jersey Shore ¹ Loans: 43.6% Deposits: 54.1% Valued at $208.1 million – 85% stock,
Slide 10: Competing Favorably Against Banking Behemoths and Local Community Banks
Competing Favorably Against Banking Behemoths and Local Community Banks Source: FDIC Summary of Deposits, June 30, 2015 Institution Ocean County # of Branches Dep. In Mkt. ($000) Mkt. Shr. (%) TD Bank (Canada) 22 2,547,306 16.84 M&T Bank (NY) 14 1,988,785 13.15 Wells Fargo (CA) 26 1,961,487 12.97 Sa
Slide 11: Strategic Deposit Composition Transition
Strategic Deposit Composition Transition Total Cost of Deposits 0.26% 87% Transaction Deposits Consumer Commercial Dec 2015 Deposits by Customer Segment
Slide 12: Strategic Focus on Commercial Lending Drives Business Deposits
Strategic Focus on Commercial Lending Drives Business Deposits Note: Amounts include repurchase agreements classified as borrowings but offered to local business relationships
Slide 13: Mobile Banking and Digital Services
Mobile Banking Consistently adopting mobile-centric options. In 2015, added TouchID, Apple Watch, and Apple Pay. Growing customer usage of mobile deposit capture. Online Banking & Bill Pay In 2015, 40% of depositors used online banking and an average of 30,000 bills were paid with online bill pay se
Slide 14: Strategic Loan Composition Transition
Strategic Loan Composition Transition
Slide 15: 2015 Loan Production
2015 Loan Production (1)Growth includes a total of $121.5 million from acquisition of Colonial American Bank.
Slide 16: Credit Underwriting Remains Conservative: Commercial Loan Production
Credit Underwriting Remains Conservative: Commercial Loan Production 2014 and 2015 (Dollars in thousands) Commercial Loan Originations 2014 2015 Commercial Loan Portfolio at December 31, 2015 Amount $243,858 $264,385 $963,233 Weighted average rate 4.14% 4.16% 4.39% Weighted average debt service cove
Slide 17: OceanFirst Maintains Conservative CRE Portfolio Relative to Peers
OceanFirst Maintains Conservative CRE Portfolio Relative to Peers Domestic CRE Loans (Construction, Multifamily & Other Nonfarm Non-residential) to Total Risk Based Capital. Supervisory guideline is 300% of TRBC. Peers include: AROW, BMTC, DCOM, FFIC, FISI, FLIC, LBAI, NFBK, ORIT, PGC, SCNB, UVSP an
Slide 18: Highlights – Risk Management
Highlights – Risk Management During 2015: Interest Rate Risk Management Extended $55 million of FHLB advances into 4 – 5 year terms $57.2 million total increase in non-interest bearing deposits which now represent 17.6% of total deposits Core deposits(1) are 86.7% of total deposits, a significant he
Slide 19: Effective Interest Rate Risk Management
Effective Interest Rate Risk Management Duration Rate Characteristics All asset categories managed with limited duration
Slide 20: Term Borrowings Extended as Interest Rate Hedge
Term Borrowings Extended as Interest Rate Hedge TOTAL $242.5MM 1.71% AVG. COST At December 31, 2015
Slide 21: Credit Metrics Reflect Conservative Culture
Credit Metrics Reflect Conservative Culture (1)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%. 0.10% 0.00% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% Net Charge-Offs Net Charge-O
Slide 22: OceanFirst Average Charge-Offs Are 20% Below Peer Average
Charged-off loans and lease financing receivables debited to the allowance for loan and lease losses divided by average loans outstanding. Peers include: AROW, BMTC, DCOM, FFIC, FISI, FLIC, LBAI, NFBK, ORIT, PGC, SCNB, UVSP and WSFS. Source: BankRegData.com OceanFirst Average Charge-Offs Are 20% Bel
Slide 23: 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. 12/31/11(1) 12/31/12 12/31/13 12/31/14 12/31/15
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 ten consecutive quarters Superstorm Sand
Slide 25: Net Interest Margin Stabilized at Historical Levels but Now Expanding
Net Interest Margin Stabilized at Historical Levels but Now Expanding Quarterly Trend Historical Average Net Interest Margin (3.28%) Q4 NIM at 3.37% includes 3 BP of prepayment fees
Slide 26: Diversified Streams of Non-Interest Income
Diversified Streams of Non-Interest Income $2.5M $16.5M 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 27: 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. (2)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 28: 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.
Slide 29: 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 30: Attractive Valuation Metrics
Attractive Valuation Metrics Valuation Price / Tang. Book Value 126% 154% Price / LQA EPS 13.9x 13.6x Price / Estimated EPS 12.0x 13.5x Core Deposit Premium 3.4% 7.0% Cash Dividend Yield 3.0% 3.1% OCFC Peers(1) 1) Peers include: AROW, BMTC, DCOM, FFIC, FISI, FLIC, LBAI, NFBK, ORIT, PGC, SCNB, UVSP a
Slide 31: Appendix
Appendix
Slide 32: 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 33: Commercial Portfolio Metrics
Commercial Portfolio Metrics APPENDIX 2 Commercial Real Estate (CRE) Total portfolio $818.4 million % of Total Loan Portfolio 41.2% Average size of CRE loans $891,000 Largest CRE loan $18.8 million Current Pipeline $34.7 million Weighted Average Yield 4.37% Weighted Average Repricing Term 5.5 years
Slide 34: 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 December 31, 2015.
Slide 35: Residential Portfolio Metrics
Residential Portfolio Metrics APPENDIX 3 Residential Real Estate Total Portfolio $830.5 million % of Total Loan Portfolio 41.8% Average size of mortgage loans $202,000 % of loans for second homes 14.9% Portfolio weighted average loan-to-value ratio (using original or most recent appraisal) - Loans o
Slide 36: Colonial American Bank Acquisition Supports Retail Expansion
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 37: OFB and Cape Loan Portfolio as of January 2016
OFB and Cape Loan Portfolio as of January 2016 37 Cape Bank Only OceanFirst Bank Only APPENDIX 5
Slide 38: OFB and Cape Loan Portfolio as of January 2016 (Cont'd)
OFB and Cape Loan Portfolio as of January 2016 38 OceanFirst and Cape APPENDIX 5 (Cont’d)
Slide 39: Serving Our Communities
Serving Our Communities Recovering from Superstorm Sandy – Construction Financing 2013 – 2015 funded 287 loans = $117.2 million OceanFirst Foundation Provided $500,000 in grants dedicated to assisting our neighbors after Superstorm Sandy hit the Jersey Shore in 2012 First foundation established duri
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