Oceanfirst Financial Corp. · NASDAQ:OCFC

Oceanfirst Financial — Investor Presentation (May 2021)

41 slides from Oceanfirst Financial's investor presentation, May 5, 2021

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

    . . . OceanFirst Financial Corp. Investor Presentation May 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: $1.36 billion1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Total Assets of $11.6 billion2 • 58 Full-Service Branches in New Jersey and Metropolitan New York City1 I N V E S T O R P R E S E N T A T I O N 3 1 As

  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: First Quarter 2021 Results

    . . . I N V E S T O R P R E S E N T A T I O N 5 First Quarter 2021 Results Financial Results • Net interest margin of 2.93% • Record loan originations of $748 million in Q11 • Loan pipeline of $344 million at March 31, 2021 • Total deposit costs decreased by 8bps from Q4 to Q1 to 37bps • Gain of $8.

  6. Slide 6: Net Interest Margin

    . . . 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Net Interest Margin2 OceanFirst Bank Peer Average Operational Highlights • Non-interest bearing deposits are 23% of average balance of total dep

  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: • $153 million average branch size as of March 31, 2021, doubling in size over the past 5 years • Core deposits represent 88%2 of total deposits, with a cos

  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, except 2021 which is as of March 31 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 2021 2020 2019 2018 2017 2016 Total Loans Outstanding Residential Home

  9. Slide 9: Generating Consistent & Attractive Returns

    . . . 0.00% 0.15% 0.30% 0.45% 0.60% 0.75% 0.90% 1.05% 1.20% 1.35% 1.50% 2016 2017 2018 2019 2020 2021 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% C o re R e tu rn o n T a n g ib le S to c k h o ld e rs ’ E q u it y Core Return on Tangible Stockholders' Equity Core Return on Assets 1, 3 1 I N V

  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 c e iv a b le 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 2016 2017 2018 2019 2020 2021 Residential Consumer Commercial Real Estate

  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 Transformation

    . . . 2015 FTE 2021 FTE Continuous Investment in Talent and Technology • Funded from ongoing earnings and branch consolidations Digital Transformation I N V E S T O R P R E S E N T A T I O N 14 7 81 Nest Egg AUM: $109 million Paperless Residential Loan Applications (Blend) Best Rated Digital Bank in

  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 April 9, 2021 4.8 4.5 4.5 4.5 4.2 OceanFirst National / Regional Large MidAtlantic FinTechs / Digital Proxy Peer Group Source: S&P Global 2019 US Mobile Banking Report 14 12

  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 . . . M A Y | 2 0 2 1 Customer Usage Statistics* Online Branch Digital Usage 98.6% 76.1% Mobile Usage 80.1% 59.1% Direct Deposits / Month 1.2 1.0 Mobile Deposits / Month

  17. Slide 17: Treasury Management Services

    . . . 1 Data as of March 31, 2021 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 • Inves

  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 and threat environment • Real-time analytical tools in place for fraud protection and cybersecurity • Use of top tier, neural-based, real-time debit car

  19. Slide 19: Strategic Capital Allocation Generates Shareholder Returns

    . . . $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 2015 2016 2017 2018 2019 2020 2021 Returned Capital to Shareholders Cash Dividends Share Repurchases 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

  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 8 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 $42.5 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 corona

  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 . . . Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through December 31, 2020 Note: Peer Group 2 - Commercial Banks between $10 billion and $100

  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 . . . M A Y | 2 0 2 1 Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through December 31, 2020 Note: Peer Group 2 - Commercial Banks betwee

  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 . . . M A Y | 2 0 2 1 Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Call Report data available through December 31, 2020 1 Peer Group 2 - Commercial Banks between $10 billion an

  29. Slide 29: Effective Interest Rate Risk Management

    . . . 1 As of March 31, 2021 Duration Rate Characteristics All asset categories managed with limited duration Effective Interest Rate Risk Management1 29 I N V E S T O R P R E S E N T A T I O N . . . M A Y | 2 0 2 1 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Mortgage Loans Consumer Loans Commercial Loans (

  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: Q1 2021 Earnings Supplement

    . . . Q1 2021 Earnings Supplement1 April 29, 2021 1 The Q1 2021 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 April 29, 2021.

  32. Slide 32: 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, strategies and expectations of the Company. These fo

  33. Slide 33: Net Interest Margin – Quarter over Quarter

    . . . 3.26% 2.98% 2.79% 2.71% 2.75% 3.52% 3.24% 2.97% 2.97% 2.93% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Core NIM NIM 2.97% 2.93% 0.11% 0.02% 0.09% 0.05% 0.03% Q4-20 NIM Lower cost of funds Reduced excess liquidity Purchase accounting impact Lower yield on PPP loans Rate environment Q1-21 NIM Core NIM vs NIM

  34. Slide 34: Credit Quality (1 of 3)

    . . . 0.37% 0.46% 0.70% 0.78% 0.76% 0.49% 0.42% 0.40% 0.36% 0.33%0.86% 0.88% 1.10% 1.14% 1.09% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 ACL Credit Marks Credit Quality (1 of 3) 34 9,969 9,649 35,714 4,072 (620) 1,154 (232) 14,995 2,942 (280) 0.06% 0.00% 0.71% 0.15% 0.00% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Credit lo

  35. Slide 35: Credit Quality (2 of 3)

    . . . Improved asset quality trends align with positive economic outlook and recovery of our local markets. 87,365 106,344 175,979 194,372 188,981 48,697 66,441 141,467 165,844 150,221 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Substandard Special Mention Credit Quality (2 of 3) 35 16,263 21,044 29,895 36,410 34

  36. Slide 36: Credit Quality (3 of 3)

    . . .Credit Quality (3 of 3) 36 Commercial vs Consumer ($’million)Loans Held-for-Investment by Payment Structure ($’million) ~ 97.4% of total loans comply with pre-COVID terms as of 3/31/21. 55% 95% 80% 50% 75% 85% 90% 100% 7,669 124 131 6,920 65 7,479 Q4-20 51 31 1,152 71 7,809 Q1-20 35 271 321 Q2-

  37. Slide 37: Non-Interest Expense

    . . .Non-Interest Expense 37 Core Non-Interest Expense ($’000) 43,166 42,003 43,463 42,838 40,838 8,509 9,072 9,338 10,215 9,453 51,675 51,075 52,801 53,053 50,291 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Other Core Non-Int Exp Technology Expense Core Efficiency Ratio • Core non-interest expense in Q1-21 exclu

  38. Slide 38: Equity and Performance

    . . .Equity and Performance 38 14.62 14.79 14.58 14.98 15.26 23.38 24.47 24.21 24.57 24.84 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Tangible Book Value per Share Book Value per Share Book Value and Tangible Book Value per Common Share 1.05% 0.81% -0.01% 0.78% 0.94% 12.25% 9.69% -0.11% 9.71% 11.04% Q1-20 Q2-20

  39. Slide 39: Appendix

    Appendix @) OCEANFIRST

  40. Slide 40: Quarterly Non-GAAP / Adjusted to GAAP Disclosure

    . . .Quarterly Non-GAAP / Adjusted to GAAP Disclosure Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental Non-GAAP information, which consists of reported net income excludin

  41. Slide 41: Non-GAAP Financial Information

    . . .Non-GAAP Financial Information 41 • Refer to the Earnings Release for additional information. Non-GAAP Reconciliation For the Three Months Ended $'000 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Core Earnings: Net income (loss) available to common stockholde

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