Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (September 2019)
40 slides from Oceanfirst Financial's investor presentation, Sep 3, 2019
Slide 1: OceanFirst Financial Corp. Investor Presentation
O oceanFnst ~~ OceanFirst Financial Corp. __ Investor Presentation # Septe .'%
Slide 2: Forward Looking Statements
(@) OcEaAnFirst 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
Slide 3: About OceanFirst
About OceanFirst © OceanFiasr Financial Corp. =)
Slide 4: OceanFirst Financial Corp.
OceanFirst Financial Corp. * NASDAQ: OCFC * Market Cap: $1.1 billion + * Bank Holding Company with National Bank Subsidiary © OceanFinst + Founded in 1902 * Asset Value of $8.0 billion 2 * 57 Full-Service Branches in Central and Southern New Jersey ? (O OceanFirst Bank Branches © OceanFirst Bank Loa
Slide 5: Investment Thesis
Investment Thesis * Low-Cost and Durable Deposit Base * Cost of deposits is one of the lowest in the state of New Jersey at 62 basis points, increasing slowly in response to rising rate environment * Strength of Assets * Strong and diversified balance sheet underpins flexibility to grow the business
Slide 6: Commitment to Execution
(@) OcEaAnFirst Commitment to Execution Our Recent Accomplishments... Five Acquisitions Closed in Four Years * Announced Merger Agreements with Two River Bancorp (NASDAQ: TRCB) & Country Bank Holding Company Inc. (OTC PINK: CYHC) on August 9, 2019 * Consolidated 39 Branches in the Last Three Years w
Slide 7: Overview of Two River Bancorp
Overview of Two River Bancorp * $1.2 billion asset commercial bank founded in 2000 serving consumers and businesses in Northern New Jersey * 14 branch locations and 2 loan production offices in Monmouth, Ocean, Union and Essex Counties @ OcEaAnFirst * Operates a relationship-based community bank mod
Slide 8: Overview of Country Bank Holding Company, Inc.
Overview of Country Bank Holding Company, Inc. * Founded in 1988, Country Bank is a $783 million asset full-service commercial bank * Network of five branches that spans from Midtown Manhattan to Scarsdale, NY * Focus on small business, commercial real estate and © OceanFinst multi-family commercial
Slide 9: Combined Highlights
Combined Highlights Strategically Compelling Acquisitions of two high-performing franchises * Two River ROAA and ROATCE of 1.06% and 12.0%, respectively! * Country Bank ROAA and ROATCE of 1.27% and 15.1%, respectively? * Positioned to cross $10B asset threshold * Natural extension of branch footprin
Slide 10: Our Business
© OceanFinst Our Business Oo
Slide 11: Second Quarter 2019 Highlights
(@) OcEANFirRsT Second Quarter 2019 Highlights Financial Highlights * Core Net Income of $26.0 million * Up 16% y/y * Core Diluted EPS of $0.51 * Up 11% y/y ¢ Net Interest Margin of 3.66% * Down 7 basis points y/y * Strong Core ROA of 1.29% and Core ROTE of 14.14% * Record loan pipeline of $297.8 mi
Slide 12: Net Interest Margin
Net Interest Margin Operational Highlights Net Interest Margin * * Cost of deposits increased only 5 bps from 1Q19 to 2Q19 = 372 a * Non-interest bearing deposits are 21% of average balanceof & 2.40 @ OceanFirst total deposits 1 a 2 2.00 * Balanced interest rate risk 150 position ang 2013-2014 2015
Slide 13: Effective Interest Rate Risk Management
(@) OcEANFirRsT Effective Interest Rate Risk Management Duration 5.0 aT 40 g 30 s - 204 u . | | | | 0.0 + 4 i Mortgage Loans Consumer Loans Commercialloans | _‘Total Assets FHLB Term Time Deposits (Weighted Average) Borrowings Rate Characteristics Mortgage loans ConsumerLoans Commercial Loans Securi
Slide 14: Deposit Growth with Branch Consolidation
@ OcEaAnFirst Deposit Growth with Branch Consolidation Total Deposits Per Branch 7,000 Total Deposits ($ Millions) 2014" 2015-2016" .2017*-2018* 2019" mmm Total Deposits © —— Average Deposits Per Branch *As of December 31, ** As of June 30, s 4 g gy (suomi $) youedg Jaq sysodaq aBeiany & 0 Strength
Slide 15: Loan Composition Emphasizes Commercial
@ OcEaAnFirst Loan Composition Emphasizes Commercial Total Loans Outstanding Loans by Customer Segment — 2019** 5 i = Commercial Consumer Consumer ' Commercial so $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 {in millions) Residential mHome Equity & Consumer investor CRE m Owner Occupied CRE mi C
Slide 16: Conservative CRE Portfolio Reflects Strategic Execution
Conservative CRE Portfolio Reflects Strategic Execution CRE to Total Risk Based Capital Capacity to grow Investor CRE by $354 million while @ OceanFirst —s remaining under 200% Peer9 > OCFC 255 > OceanFirst Actual Peer 10 328 > Peer Group Average Domestic CRE Loans (Construction, Multifamily & Other
Slide 17: Generating Consistent & Attractive Returns
@ OcEaAnFirst Generating Consistent & Attractive Returns 16.0% 1.50% = Mon 1.35% z 1.20% E 120% ¢ 1.05% 2 =e es 0.90% 8 8.0% 0.75% S S P con 0.60% 5 0.45% S 4.0% a 0.30% 2 2.0% nett 0.0% 0.00% 2015 2016 * 20177 2018 * 2019 *? fmm Core Return on Tangible Common Equity | ——Core Return on Assets * Cont
Slide 18: Credit Metrics Reflect Conservative Culture
ae Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.07% 0.15% 0.10% 0.05% 0.05% (Annualized) 1.00% 0.91% | 0.90% i 0.80% @ OcEANFiRST =. 070% = 0.60% i 0.50% Fy 2 0.40% 3 0.31% 2 0.30% FE 0.20% A 0.10% 0.00% 2015 2017 YTD 2019
Slide 19: Our Strategy
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Slide 20: Asset Growth Supplemented by Strategic M&A
Asset Growth Supplemented by Strategic M&A Opportunistic Acquisitions of Local Community Banks Colonial American Bank July 31, 2015 ~$ 12 million $ 142 million Cape Bancorp May 2, 2016 ~$196 million $1,518 million @ OcEANFIRST Ocean Shore Holding Co. November 30, 2016 ~$146 million $1,097 million Su
Slide 21: New Jersey Expansion Opportunities
New Jersey Expansion Opportunities * New Jersey is an attractive market ! * Statewide Total Population of 8.9 million * Most densely populated state * 11' most populous state * Median household income of $72,000 @ OcEANFIRST * Significant opportunities for acquisitions to build customer base * Suppo
Slide 22: Regional Opportunities for M&A
Regional Opportunities for M&A © OcEANFirRsT Philadelphia Area + 4 Banks with Assets Bet * 11 Banks with Assets New York City Metro Area * 6 Banks with Assets Between $400M and $1B * 6 Banks with Assets Between $1B and $10B New Jersey + 15 Banks with Assets Between $400M and $1B “" SOUTHERN NJ © Hea
Slide 23: Certified Digital Bankers
@) OcEANFirRsT 561 Certified Digital Bankers Proprietary program training branch & care center staff to support customers’ use & adoption of digital services. Digital Services Online Banking, Mobile & Tablet Apps Biometric ID verification * Remote Check Deposit ¢ Bill Pay Pop Money (P2P) Money Manag
Slide 24: Organic Digital Banking Initiatives
(@) OcEaAnFirst Organic Digital Banking Initiatives ¢ nest egg « @ OceanFirst * Hybrid robo-advisor product offered by our partner RIA, NestEgg * Replaced prior third-party broker/dealer investment sales program * Promotion began in January, 2019 * Branch training complete, hardware installed, sales
Slide 25: Treasury Management Solutions
Treasury Management Solutions: * ACH Origination, Receipts, Addenda Reporting and Debit Blocking Accept Multiple Forms of Payment Account Analysis Statements Business Online Banking y OcEANFirst Coin & Currency ordering Early Adopter * Convert Paper to Electronic Introduced Cash Management Services
Slide 26: Protecting Our Clients with Cyber Security
(@) OcEaAnFirst Protecting Our Clients with Cyber Security * Remains current with evolving industry-wide i 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 * Qualified, certified senior In
Slide 27: Strategic Capital Allocation Generates Shareholder Returns
Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders * Stable & competitive dividend * 90* consecutive quarter * Historical Payout Ratio of 30% to 40% ¢ Repurchased 309,167 shares YTD $20 2019; 986,000 shares remain available Sis for repurchase $10 = 0 [] * Str
Slide 28: An Experienced Management Team
@ OcEaAnFirst An Experienced Management Team Years at Executive Title = Selected Experience OceanFirst - Chairman, President, Patriot National Bancorp see toppe Dele Chief Executive Officer 5 Dime Community Bancshares Executive Vice President, Wachovia Bank N.A. deseo 2. teeellll Chief Operating Off
Slide 29: OceanFirst Foundation
irst Foundation: UAGLIYV! Communities UUF COTY * Over $39 million has been granted to organizations serving OceanFirst’s market * Provided $500,000 in grants dedicated to assisting our neighbors after Superstorm Sandy devastated the Jersey Shore in 2012 @) OcEANFirRsT * First foundation established
Slide 30: Investment Thesis
@ OcEaAnFirst Investment Thesis * Low-Cost and Durable Deposit Base * Cost of deposits is one of the lowest in the state of New Jersey at 62 basis points, increasing slowly in response to rising rate environment * Strength of Assets * Strong and diversified balance sheet underpins flexibility to gro
Slide 31: Investor Relations Inquiries
a i © oceanFinst nvestor Relations Inquiries “ Jill A. Hewitt Senior Vice , Director of Investor Relations & Corporate Communications 31
Slide 32: Appendix
© OceanFinst Appendix
Slide 33: Colonial American Bank Acquisition
Colonial American Bank Acquisition * 100% Stock deal, valued at $11.9 million * In-Market acquisition supports growth objective in towns of Middletown and Shrewsbury, NJ . Middle Supports Retail * Favorable financial terms (adjusted for DTA realization Expansion in High of $2.3 million) * Nate comen
Slide 34: Cape Bancorp Acquisition
Cape Bancorp Acquisition * 85% stock and 15% cash, valued at $196 million * Favorable financial terms * * Price/Tangible Book Value of 139% * Price/Core Deposit Premium of 4.4% * Expected accretion to GAAP EPS of 17% in 2017 + Expected tangible book value dilution of 7.2%, projected earnback of appr
Slide 35: Ocean Shore Holding Co. Acquisition
@ OcEaAnFirst Ocean Shore Holding Co. Acquisition * Reinforces Oceanfirst as the preeminent New Jersey based community banking franchise operating throughout central and southern New Jersey + 80% stock 20% cash, valued at $146 million * Favorable financial terms? + Price/Tangible Book Value of 132%
Slide 36: Sun Bancorp, Inc. Acquisition
@ OcEaAnFirst Sun Bancorp, Inc. Acquisition Strengthens and expands OceanFirst franchise into more demographically attractive Central New Jersey, Philadelphia and New York city metro markets 85% stock and 15% cash, valued at $475 million Favorable financial terms * Price/Tangible Book Value of 169%
Slide 37: Capital Bank of New Jersey Acquisition
Capital Bank of New Jersey Acquisition Deepens OceanFirst’s market position in Southern NJ and the greater metro Philadelphia area 100% stock, valued at $77 million Favorable financial terms 1 * Price/Tangible Book Value of 172% * Price/Core Deposit Premium of 8.1% @ OcEaAnFirst * 2020E EPS accretio
Slide 38: OceanFirst Milestones — Years of Growth
OceanFirst Milestones — 117 Years of Growth IPO to Mutual Depositors Created Oceanfirst Foundation Colonial American Adopted National Bank Acquired Bank Charter Established Trust and Asset Commercial LPO Founded, Established zs e@ OceanFirst Point Pleasant, Nd Commercial Lending Expansion into Sun B
Slide 39: Favorable Competitive Position
Favorable Competitive Position Community Banks servin; Mega Banks OceanFirst Bank Central & Southern NJ Hof Dep. In Mkt. oo oe D ey te z mt ‘TD Bank (Canada) 126 21,553,420 Sie EE) Manasquan 1,124,236 PNC Bank (PA) 147 18,784,246 OceanFirst Republic First 12 1,099,644 Competitive Position @ OceanFir
Slide 40: Commercial Portfolio Segmentation
(@) OcEaAnFirst Commercial Portfolio Segmentation Total Commercial Loan Exposure by Real Estate Investment by Industry Classification Property Classification Transportation & Motel Miscellaneous Warehousing _jyiscellaneous commercat 2) 9.2% Manufacturing 18% | 6.5% peepee \ Arts/Entertainment/ —~ |
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