Slide 1: 2Q 2023 Earnings Release Supplement
. . . 1 The 2Q 2023 Earnings Release Supplement should be read in conjunction with the Earnings Release furnished as Exhibit 99.1 to Form 8-K filed with the SEC on July 20, 2023. Exhibit 99.2 OceanFirst Financial Corp. 2Q 2023 Earnings Release Supplement1 July 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, strateg
Slide 3: Q2-23 Financial Highlights
. . .Q2-23 Financial Highlights 3 (1) For non-GAAP financial measures, please refer to the ‘Non-GAAP Reconciliations’ in the Appendices for a reconciliation to GAAP financial information. Financial Highlights $0.46 Core Diluted EPS 1 $92.1 million Net Interest Income 0.81% Core ROAA 1 10.36% Core RO
Slide 4: Investor Presentation Quarterly
. . . I N V E S T O R P R E S E N T A T I O N 4 Quarterly Earnings Update
Slide 5: Loan Portfolio Trends
. . .Loan Portfolio Trends 5 Moderated Loan Growth in the Portfolio ($’millions) Loan growth has moderated prudently, with the expectation of single-digit growth for the remainder of the year. Diversified portfolio with a focus on CRE Investor Owned and Residential loans. Attractive and improv
Slide 6: Credit Quality Historically Top Quartile and Well Positioned
. . .Credit Quality Historically Top Quartile and Well Positioned Underlying collateral is diversified: The underlying collateral for the CRE Investor Owned (“Investor”) portfolio is highly diversified and focused in low risk collateral types. Central business district loans comprise 1.1% of tot
Slide 7: Quarterly Credit Trends (1 of 2)
. . . Strong asset quality trends driven by prudent loan growth and credit decisioning. Quarterly Credit Trends (1 of 2) 7 Non-Performing Loans and Assets ($’000)1 Special Mention and Substandard Loans ($’000) Note: Of the $30.9 million in Special Mention loans and $88.2 million of Substandard loans
Slide 8: Quarterly Credit Trends (2 of 2)
. . .Quarterly Credit Trends (2 of 2) 8 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans NCOs / (Recoveries) and Provision for Credit Loss Expense ($’000) 0.17% 0.55% Q2-22 0.14% 0.55% Q3-22 0.12% 0.57% Q4-22 0.10% 0.60% Q1-23 Q2-23 0.72% 0.69% 0.69% 0.70% 0.71% 0
Slide 9: Track Record of Strong Credit Performance
. . . COVID-19 Pandemic Track Record of Strong Credit Performance 9 From 2006 to 2022, inclusive of the Global Financial Crisis, Hurricane Sandy, and the COVID-19 Pandemic, OCFC’s CRE NCO to average CRE loans totaled 6 bps per year compared to 81 bps for all commercial banks between $10 - $50 bill
Slide 10: Deposit Trends
. . .Deposit Trends 10 (1) Deposit beta is calculated as the increase in rate paid on total deposits per quarter divided by the incremental increase in the fed funds rate since January 1, 2022. (2) Includes money market and institutional deposits. Deposits (excl. brokered CD’s) remained stable, de
Slide 11: ~85% of Total Deposits Are Insured and Population Remains Granular
. . .~85% of Total Deposits Are Insured and Population Remains Granular 11 OCFC’s deposit composition is extremely granular with 98% of all deposit accounts having less than $250K. OCFC customers have long tenured relationships with an average age of 9 years. The median age of a deposit relation
Slide 12: Net Interest Income and Net Interest Margin Trends
. . .Net Interest Income and Net Interest Margin Trends 12 (1) Core NIM excludes purchase accounting and prepayment fee income. Refer to the Earnings Release for additional information. Core NIM1 vs NIM NIM Bridge Q1-23 NIM -0.27 3.02% Ordinary course rate impacts 0.01 Quarter-specific impacts (payo
Slide 13: Core Efficiency Ratio: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 13 Core Non-Interest Expense1 ($’000) 41,721 42,331 45,711 45,981 47,610 12,992 13,937 11,111 13,108 12,923 2,7773,206 Q4-22Q2-22 2,519 Q3-22 2,128 Q1-23 2,397 Q2-23 57,919 59,045 59,341 61,217 62,930 Trident Technology Expense O
Slide 14: Generating Consistent and Attractive Returns
. . .Generating Consistent and Attractive Returns 14 Book Value and Tangible Book Value per Common Share ($)1 Core ROAA1, ROTE1, and ROTCE1 • Book value per share increased by $0.30 (or 1.1%) per share compared to the linked quarter. • Tangible book value per common share increased by $0.30 (or 1.7%
Slide 15: Leading TBV Growth Supported by Prudent Liquidity Management
. . .Leading TBV Growth Supported by Prudent Liquidity Management 15 Tangible Book Value per Share Growth (Q1-22 to Q1-23)(1) (1) Peers include those companies defined in definitive proxy statement filed April 21, 2023. Excludes Investors Bancorp due to the sale to Citizens Financial Group. -20% -10
Slide 16: Management 2023 Outlook – Update
. . .Management 2023 Outlook – Update 16 Loans Deposits Operating Expenses Net Interest Margin Capital • Continued focus on credit risk management, anchored by our diversified CRE portfolio that has performed well in market downturns • Maintain loan-to-deposits ratio ~100% for remainder of the year
Slide 17: Appendix
. . . I N V E S T O R P R E S E N T A T I O N 17 Appendix
Slide 18: Liquidity Sources are Robust and Diverse
. . .Liquidity Sources are Robust and Diverse 18 Liquidity remains robust: Adjusted uninsured deposits accounted for 15% of total deposits. Cash held on balance sheet totaled $338 million(1). OCFC had no outstanding borrowings from the Federal Reserve Discount Window or Bank Term Funding Progr
Slide 19: High Quality and Low Risk Investment Portfolio
. . .High Quality and Low Risk Investment Portfolio 19 Unrealized gain on AFS debt securities of $0.3 million in Q2- 23 ($5.8 million in the YTD period). Portfolio remains high quality and investment grade with 86% rated AAA or AA. Total duration on the investment portfolio totaled 4 years. In
Slide 20: OCFC's Customer Base Values Operational Support
. . .OCFC’s Customer Base Values Operational Support OCFC’s deposit base is highly operational and values individualized service and support. OCFC customers initiated over 43 million total transactions in 2022 for over $101 billion, turning over our June 30, 2023 deposit balance more than 10 times p
Slide 21: Adjusted Uninsured Deposit Bridge Detail
. . .Adjusted Uninsured Deposit Bridge Detail 21 Note #1: Uninsured deposits are reported at the consolidated Bank level per the Call Report. (1) The State of NJ requires collateralization on municipal deposits and administers a backstop to protect these deposits. (2) Gross exclusions relate to inte
Slide 22: Non-GAAP Reconciliations (1 of 2)
. . .Non-GAAP Reconciliations (1 of 2) (1) The sale of specific positions in two financial institutions impacted both equity investments and debt securities for the three months ended March 31, 2023. On the Consolidated Statements of Income, the losses on sale of equity investments and debt securiti
Slide 23: Non-GAAP Reconciliations (2 of 2)
. . .Non-GAAP Reconciliations (2 of 2) Non-GAAP Reconciliation #039;000 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Tangible Equity Total stockholders' equity 1,626,283 1,610,371 1,585,464 1,540,216 1,521,432 Less: Goodwill 506,146 506,146 506,146 506,146 506,146 Cor