Slide 1: OceanFirst Financial Corp. Investor Presentation October 2023
Exhibit 99.1 ... OceanFirst Financial Corp. Investor Presentation October 2023 1 The 3Q 2023 Investor Presentation should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on October 19, 2023.
Slide 2: Legal Disclaimer
Legal .Disclaimer .. 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, strategi
Slide 3: Overview of OceanFirst
Overview ... of OceanFirst Corporate Overview Corporate Overviewand Market & Market Data Data Tailored Footprint Across Key Markets Ticker OCFC (NASDAQ) HQ Red Bank, NJ Branch Network 38 branches and 8 commercial banking centers Core Markets New Jersey, New York City, Greater Philadelphia Expansion
Slide 4: Our Shareholder Value Proposition
Our Shareholder ... Value Proposition Forward-thinking risk management – Shifted focus from loan growth to securing back-up liquidity sources and maintaining price and credit structure discipline. Strong balance sheet – Strategically planned balance sheet provides ample liquidity, high-quality inves
Slide 5: Proven Historical Net Interest Income and Loan Growth
Proven . . . Historical Net Interest Income and Loan Growth Peer Leading Net Interest Income Growth ($’000) 3.71% 3.62% 3.52% 376,909 3.46% 3.37% 23% 3.25% 3.16% 2.93% 3.09% 377,477 Net Interest 255,971 312,951 305,338 281,907 Income CAGR 240,502 169,218 120,262 76,829 2015 2016 2017 2018 2019 2020
Slide 6: Successful Commercial Loan Growth and Geographic Diversification
Successful ... Commercial Loan Growth and Geographic Diversification Commercial Loans by Geography as of Q3-23 Emphasis on Commercial (Commercial % of Loan Portfolio) Increase of $6.0B in commercial Boston & Baltimore loans since 2015 6% +20% Philadelphia 23% 42% New Jersey Total: 69% $6.9B 49% 29%
Slide 7: Balanced Approach to Deposit Pricing and Growth
Balanced . . . Approach to Deposit Pricing and Growth Deposit Composition ($’millions) 10,534 9,428 9,733 9,675 1,827 2,133 2,412 2,101 Deposit Stratification 6,329 3,709 5,815 1,377 3,647 3,830 4,343 1,151 4,202 4,188 860 783 757 2,539 2,350 784 714 1,484 1,917 1,627 1,954 736 570 578 1,491 1,488 1
Slide 8: Conservative Credit Risk Profile
Conservative ... Credit Risk Profile Non-performing Loans by Type as % of Loans1 Continued Focus on Credit Risk1 0.89 0.52% 0.85 0.85 0.01% 0.47% 0.75 0.02% 0.73 0.73 0.69 0.64 0.62 0.35% 0.60 0.01% 0.59 0.36% 0.31% 0.54% 0.08% 0.03% 0.29% 0.00% 0.30% 0.27% 0.50 0.01% 0.52 0.47 0.44 0.05% 0.10% 0.22
Slide 9: Operational Efficiency
Operational ... Efficiency Operating Efficiency ($’millions) Deposits per Branch ($’millions) 3.9x 277 255 Assets per Branch 400 20 Assets per FTE 207 350 18 16 300 14 152 250 12 200 10 113 345 355 94 99 150 8 13250 13 14 71 12 6 69 100 9 9 185 7 7 8 147 4 50 118 127 96 85 2 0 0 2015 2015 2016 2016
Slide 10: Business Model Strength Driving Significant Capital Return
Business ... Model Strength Driving Significant Capital Return Growth Since 2013 $27.06 Tangible Book Value per Share 1 45.4% The growth in TBV per common share $25.61 Total Capital Return per Share 119.5% $2.98 (TBVPCS1) is attributed to: $23.60 $2.98 ▪ Minimally dilutive and strategic $2.86 $21.36
Slide 11: Quarterly Earnings Update
INVESTOR PRESENTATION ... Quarterly Earnings Update 11
Slide 12: Q3-23 Financial Highlights
Q3-23. .Financial . Highlights Financial Highlights $0.32 $91 million 0.54% Core Diluted EPS 1 Net Interest Income Core ROAA 1 6.88% $0.59 10.4% Core ROTCE 1 Core PTPP Diluted EPS 1 CET1 Ratio ▪ Net deposit growth of $376 million and prudent loan growth, resulted in a loan-to-deposit ratio of 96%. N
Slide 13: Loan Portfolio Trends
Loan Portfolio ... Trends Moderated Loan Growth in the Portfolio ($’millions) 5.30% 5.17% ▪ Loan growth has moderated prudently, with 4.96% the expectation of low single-digit growth for 4.76% the remainder of the year. 4.18% 10,124 ▪ Improving loan yields. 9,918 10,040 10,084 9,719 253 255 252 262
Slide 14: Credit Quality Historically Top Quartile and Well Positioned
Credit. .Quality . Historically Top Quartile and Well Positioned CRE Investor Owned - Collateral Details ▪ Underlying collateral is diversified: The underlying collateral for the CRE #039;millions CRE: Investor Owned % of Total WA LTV WA DSCR Investor Owned (“Investor”) portfolio is highly diversified
Slide 15: Quarterly Credit Trends (1 of 2)
Quarterly . . . Credit Trends (1 of 2) Strong asset quality trends driven by prudent loan growth and credit decisioning. Non-Performing Loans and Assets ($’000)1, 2, 3 Special Mention and Substandard Loans ($’000) 2.58% 2.53% 0.50% 0.50% 2.46% 2.39% 0.47% 1.56% 0.43% 0.40% 0.40% 0.39% 1.30% 0.35% 1.
Slide 16: Quarterly Credit Trends (2 of 2)
Quarterly . . . Credit Trends (2 of 2) Loan Allowance for Credit Losses (ACL) Plus PCD & General NCOs / (Recoveries) and Provision for Credit Loss Credit Marks / Total Loans Expense ($’000) 0.71% 0.72% 10,283 0.69% 0.69% 0.70% Driven by a charge-off on a single commercial 0.10% 0.09% 0.12% 0.10% rea
Slide 17: Track Record of Strong Credit Performance
Track . Record .. of Strong Credit Performance Global Financial Hurricane COVID-19 Crisis Sandy Pandemic Cumulative CRE charge-offs for OCFC between 2006 and Q3-23 were minimal, totaling $35 million. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1-23 Q2-23 OCF
Slide 18: Deposit Trends
Deposit . . . Trends ▪ Deposits (excl. brokered CDs) increased by 9% from the linked Shift in Deposit Mix to Drive Retention ($’millions) quarter. 10,534 10,158 9,959 9,675 9,993 ▪ High yield savings grew by $328 million from the previous quarter, 1,827 2,326 1,984 1,854 driving an improvement in th
Slide 19: Deposits Are Insured/Collateralized, Long Tenured, and Granular
. . . Deposits Are Insured/Collateralized, Long Tenured, and Granular ~84% of Total Deposits ($’millions) 9,959 9,675 9,993 10,158 10,534 ▪ OCFC’s deposit composition is extremely granular with 98% 15.1% 15.6% of all deposit accounts by number less than $250K. 22.5% 21.3% 18.6% ▪ OCFC customers have
Slide 20: Net Interest Income and Net Interest Margin Trends
Net Interest ... Income and Net Interest Margin Trends Net Interest Income ($’000) NIM Bridge 106,488 3.02% 98,802 -0.08 95,965 0.01 92,109 90,996 -0.04 2.91% Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Net Interest Income Q2-23 NIM Ordinary course Quarter-specific Excess liquidity Q3-23 NIM rate impacts impacts
Slide 21: Expense Discipline and Focused Investment
Expense . . . Discipline and Focused Investment Core Non-Interest Expense1 ($’000) ▪ Q3-23 core operating expenses increased $1.6 million 62,930 64,484 from the prior linked quarter and totaled $64.5 million, of 59,341 61,217 2,701 59,045 2,397 which $2.4 million were non-recurring staff costs. 2,51
Slide 22: Generating Consistent Returns
Generating ... Consistent Returns Book Value and Tangible Book Value per Common Share ($)1 Core ROAA1, ROTE1, and ROTCE1 27.37 27.56 27.07 15.9% 26.81 14.4% 26.04 12.8% 15.0% 10.4% 13.6% 12.2% 6.9% 17.72 17.93 9.8% 17.08 17.42 1.2% 16.30 1.1% 6.5% 1.0% 0.8% 0.5% Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q3-22 Q
Slide 23: Leading TBV Growth Supported by Prudent Liquidity Management
Leading . . . TBV Growth Supported by Prudent Liquidity Management Tangible Book Value per Share Growth (Q2-22 to Q2-23)(1) 15 11.0 10% 5% 0% -5% Peer 1 Peer 2 OCFC Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 Peer 19 Peer 2
Slide 24: 2023 Outlook – Update
Management ... 2023 Outlook – Update Guidance Key Assumptions / Commentary Low single-digit • Continued focus on credit risk management, anchored by our diversified CRE Loans growth for full year portfolio that has performed well in market downturns • Maintain loan-to-deposit ratio ~100% for remaind
Slide 25: Appendix
INVESTOR PRESENTATION ... Appendix 25
Slide 26: CBD Office Concentration Exposure Is Moderate
CBD Office ... Concentration Exposure Is Moderate CRE Investor Owned: Office (All Geographies) Office Portfolio #039;millions Book Balance % of Total WA LTV WA DSCR Office 530 48.6% 51.9 1.72 ▪ Central business district loans comprised 1% of total assets Life Sciences & Medical 330 30.3% 57.8 1.71 and
Slide 27: Liquidity Sources are Robust and Diverse
Liquidity . . . Sources are Robust and Diverse Liquidity remains robust: 4,324 262% ▪ Adjusted uninsured deposits accounted for 16% of total deposits. 816 ▪ Cash held on balance sheet totaled $304 million(1). 145 ▪ OCFC had no outstanding borrowings from the Federal Reserve Discount Window or Bank T
Slide 28: High Quality and Low Risk Investment Portfolio
High Quality ... and Low Risk Investment Portfolio Investment Portfolio Composition Portfolio Trends and Yield (1) Other US Government & Agency 1,955 1,931 Corporate Debt 1,873 6% 4% 1,749 1,765 4% Rate Exposure: Asset-Backed • 22% floating 3.82% 3.40% 3.47% 17% • 78% fixed 2.83% Total: 2.27% $1.7B
Slide 29: Customer Base Values Operational Support
Customer ... Base Values Operational Support Deposit base is highly operational and values individualized service and support. OCFC customers initiated over 43 million total transactions in 2022 for over $100 billion, turning over our September 30, 2023 deposit balance ~10 times per year. Volume Dol
Slide 30: Adjusted Uninsured Deposit Bridge Detail
. . . Uninsured Deposit Bridge Detail Adjusted Adjusted Uninsured Deposit Bridge #039;millions Schedule/Line September 30, 2023 Estimated Uninsured Deposits RC-O Line M.2 5,271 1 Less: Collateralized Municipal Deposits (2,164) 2 Less: Gross Exclusion Deposits (1,457) Estimated Adjusted Uninsured Deposi
Slide 31: Non-GAAP Reconciliations (1 of 2)
Non-GAAP ... Reconciliations (1 of 2) Non-GAAP Reconciliation For the Three Months Ended September 30, June 30, March 31, December 31, September 30, #039;000 2023 2023 2023 2022 2022 Core Earnings: Net income available to common stockholders (GAAP) 19,663 26,793 26,879 52,268 37,607 Add (less) non-recu
Slide 32: Non-GAAP Reconciliations (2 of 2)
Non-GAAP ... Reconciliations (2 of 2) Non-GAAP Reconciliation September 30, June 30, March 31, December 31, September 30, #039;000 2023 2023 2023 2022 2022 Tangible Equity Total stockholders' equity 1,637,604 1,626,283 1,610,371 1,585,464 1,540,216 Less: Goodwill 506,146 506,146 506,146 506,146 506,146