Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (July 2015)
31 slides from Oceanfirst Financial's investor presentation, Jul 27, 2015
Slide 1: Investor Presentation July 2015
Investor Presentation July 2015 OceanFirst Financial Corp. Exhibit 99.1
Slide 2: Forward Looking Statements
OceanFirst Financial Corp. Forward Looking Statements: This presentation contains certain forward-looking statements within the meaning of the Private Securities Reform Act of which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-
Slide 3: OceanFirst Milestones – 113 Years of Growth
OceanFirst Milestones – 113 Years of Growth Established Trust and Asset Management Founded, Point Pleasant, NJ Established Commercial Lending Rebuilt Capital To 9.5% Through Secondary Stock Offering IPO To Mutual Depositors Repurchased 62% Of Original IPO shares OceanFirst Foundation Passes $25 mill
Slide 4: Serving Central New Jersey Market
Serving Central New Jersey Market 30 million people, or approximately 10% of the total U.S. population, reside within a 2-hour drive* • Community Bank serving the Central Jersey market - $2.4 billion in assets and 24 branch offices (25 th branch opening in third quarter 2015) • Targeting growth oppo
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 Patriot National Bancorp; Dime Community Bancshares Michael J. Fitzpatrick Executive Vice President, Chief Financial Officer KPMG Joseph R. Iantos
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 PGB Trust and Investments (Division of Peapack-Gladstone Bank) Margaret Lanning First Senior Vice President, Chie
Slide 7: Our Strategy
Our Strategy • Currently positioned as the leading Community Bank in Central New Jersey • Expanding into Monmouth, Mercer and Middlesex Counties Developing the franchise Growing revenue Creating additional value for shareholders • Strategically focused on revenue growth in commercial lending, wealth
Slide 8: Significant Primary Market Deposit Share
Significant Primary Market Deposit Share # of Dep. In Mkt. Mkt. Shr. Rank Institution Branches ($000) (%) 4 OceanFirst Financial Corp. (NJ) 19 1,480,885 10.17 Competing Favorably Against Banking Behemoths Ocean County, NJ TD Bank, National Association (Canada) 2,541,705 17.45 Hudson City Bancorp Inc
Slide 9: Strategic Deposit Composition Transition
Strategic Deposit Composition Transition Time Deposits Time Deposits MMDA & Savings MMDA & Savings MMDA & Savings Interest Checking Interest Checking Interest Checking Non-Interest Checking Non- Interest Checking WAR 0.05% WAR 1.40% Time Deposits* WAR 0.09% 0% 20% 40% 60% 80% 100% Dec 1996 Dec 2009
Slide 10: Strategic Focus on Commercial Lending Drives Business Checking
Strategic Focus on Commercial Lending Drives Business Checking
Slide 11: Full Suite of Technology and Delivery Systems
Full Suite of Technology and Delivery Systems Mobile Banking Added mobile deposit capture in 2013 and TouchID in April 2015. More than 14,000 depositors use mobile, text or smart phone apps monthly. Online Banking & Bill Pay In 2014, 42% of depositors used online banking and an average of 34,000 bil
Slide 12: Strategic Loan Composition Transition
Strategic Loan Composition Transition Residential R.E. (57.4%) Residential R.E. (89.6%) Residential R.E. Investment CRE Investment CRE Investment CRE Consumer & Other Consumer & Other Consumer & Other C&I Owner- Occupied CRE Owner- Occupied CRE C&I (43.9%) 0% 20% 40% 60% 80% 100% Dec 1996 Dec 2009 J
Slide 13: Credit Underwriting Remains Conservative: Commercial Loan Production
Credit Underwriting Remains Conservative: Commercial Loan Production 2014 and 2015 (Dollars in thousands) 2014 Total Commercial Loan Originations First Half 2015 Total Commercial Loan Originations Total Portfolio at June 30, 2015 Amount $243,858 $121,473 $809,515 Weighted average rate 4.14% 4.13% 4.
Slide 14: Highlights – Second Quarter 2015
Highlights – Second Quarter 2015 • Received required regulatory and stockholder approvals relating to the pending acquisition of Colonial American Bank. The transaction is scheduled to close on July 31, 2015. • Grew commercial loan portfolio $34.3 million, 17.7% annualized A new commercial lending t
Slide 15: Highlights – Risk Management
Highlights – Risk Management Over the past year through June 30, 2015: • Interest Rate Risk Management Extended $60 million of FHLB advances into – year terms $57 million of retail checking migrated to non-interest bearing Core deposits (1) are 88.1% of total deposits, a significant hedge against a
Slide 16: Credit Metrics Reflect Conservative Culture
Credit Metrics Reflect Conservative Culture Data as of December 31, unless otherwise indicated. 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%. Ratio for 2015 is annualize
Slide 17: OceanFirst Charge-Offs Are 44% Below Peer Average
OceanFirst Charge-Offs Are 44% Below Peer Average Peer group contains: BMTC, DCOM, FLIC, HUVL, LBAI, ORIT, PGC, SUBK, UVSP, WSFS. (FFIC excluded due to lack of data during full time period). Source: FDIC Statistics on Depository Institutions.
Slide 18: Prudently Provisioning for Credit Costs
Prudently Provisioning for Credit Costs $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Net Charge-Offs Net Charge-Offs Attributable to Bulk Sale of NPL's Provision for Loan Losses (1) Higher 2011 charge-offs were due to a change in charge-off policy to recognize the charge-off when the loan is deemed uncollectib
Slide 19: Net Interest Margin
Net Interest Margin Stabilized at Historical Levels 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Quarterly Trend Historical Average Net Interest Margin (3.28%)
Slide 20: Diversified Streams of Non-Interest Income
Diversified Streams of Non-Interest Income Non-Interest Income excludes gain/loss from other real estate operations, gain on sale of securities and gain on sale of loan servicing.
Slide 21: Generating Consistent Attractive Returns
Generating Consistent Attractive Returns (1) Excludes after-tax impact of $3.1 million in non-recurring charges related to strategic advance restructuring and branch consolidation.
Slide 22: Prudently Managing Excess Capital in Near Term
Prudently Managing Excess Capital in Near Term $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 6/30/15 Stock Repurchases Cash Dividends Notes: Stock Repurchases – $15.19 Average Cost per Share. Quarterly dividend rate increased by $0.01, or 8.3%, in October 2014. (Six Months )
Slide 23: 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 eight consecutive quarters Superstorm
Slide 24: Colonial American Bank Acquisition
Colonial American Bank Acquisition Supports Retail Expansion in High Value Communities • 100% Stock deal, valued at $11.3 million • In-Market acquisition supports growth objective in towns of Middletown and Shrewsbury, NJ • Favorable financial terms (adjusted for DTA realization of $2 million) • Pri
Slide 25: Why OCFC…?
Why OCFC…? • Fundamental franchise value • Superior deposit profile • Conservative credit culture • Consistent commercial loan and deposit growth • Solid financial performance • Strong balance sheet and capital base • Seasoned and effective management team • Substantial insider ownership – aligned w
Slide 26: Attractive Valuation Metrics
Attractive Valuation Metrics Valuation Price / Tang. Book Value 140% 162% Price / LQA EPS 14.3x 16.0 x Price / Estimated EPS 14.2x 14.9x Core Deposit Premium 5.0% 9.1% Cash Dividend Yield 2.8% 2.8% OCFC Peers (1) 1) Peers include: BMTC, DCOM, FFIC, FLIC, LBAI, ORIT, PGC, SUBK, UVSP and WSFS Note: Fi
Slide 27: Appendix
Appendix
Slide 28: Market Demographics
Market Demographics APPENDIX 1 Ocean Monmouth Middlesex Mercer National Number of Offices % of OceanFirst Deposits 86.2 10.9 2.9 Market Rank Market Share (%) 10.2 0.9 0.2 Population 583,000 628,000 831,000 369,000 Projected 2014-2019 Population Growth (%) 1.4 — 3.0 1.2 3.5 Median Household Income ($
Slide 29: Commercial Portfolio Metrics
Commercial Portfolio Metrics APPENDIX 2 Commercial Real Estate (CRE) Total portfolio $698.3 million % of Total Loan Portfolio 38.7% Average size of CRE loans $896,000 Largest CRE loan $20.1 million Current Pipeline $41.5 million Weighted Average Yield 4.35% Weighted Average Repricing Term 5.9 years
Slide 30: Commercial Portfolio Segmentation
Commercial Portfolio Segmentation APPENDIX 2 (Cont’d) Total Commercial Loan Exposure by Industry Classification Real Estate Investment, 41.4% Arts/Entertainment/ Recreation, 6.6% Other Services, 2.7% Retail Trade, 4.2% Public Administration, 5.6% Miscellaneous, 5.5% Manufacturing, 3.7% Educational S
Slide 31: Residential Portfolio Metrics
Residential Portfolio Metrics APPENDIX 3 Residential Real Estate Total Portfolio $785.8 million % of Total Loan Portfolio 43.9% Average size of mortgage loans $195,000 % of loans for second homes 11.0% Portfolio weighted average loan-to-value ratio (using original or most recent appraisal) - Loans o
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