Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (May 2018)
34 slides from Oceanfirst Financial's investor presentation, May 7, 2018
Slide 1: OceanFirst Financial Corp. Investor Presentation May 2018
. . . OceanFirst Financial Corp. Investor Presentation May 2018
Slide 2: Forward Looking Statements
I N V E S T O R P R E S E N T A T I O N . . . 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
Slide 3: About OceanFirst Financial Corp.
. . . About OceanFirst Financial Corp. 3
Slide 4: OceanFirst Financial Corp.
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $1.3 billion1 • Bank Holdings Company with National Bank Subsidiary • Founded in 1902 • Asset Value of $7.5 billion • 76 Branches in Central and Southern New Jersey Headquarters OceanFirst Bank Bran
Slide 5: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 33 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong balance sheet underpins fl
Slide 6: Commitment to Execution
I N V E S T O R P R E S E N T A T I O N . . . Commitment to Execution Our Recent Accomplishments... …Lead to Our Path Forward • Four Acquisitions in Two Years • Local to Regional Scale • Commercial Loan Growth in • Increased Investment in Direct Recent Years Banking & Digital Engagement • Increased
Slide 7: Our Business
© occanFinst Our Business \- Bom)
Slide 8: First Quarter 2018 Highlights
I N V E S T O R P R E S E N T A T I O N . . . First Quarter 2018 Highlights Financial Highlights Operational Highlights • Core Net Income of $20 million • Acquisition of Sun Bancorp, Inc. • Up 53% y/y completed on January 31, 2018 with • Core Diluted EPS of $0.45 full integration planned for Q2 2018
Slide 9: Net Interest Margin
I N V E S T O R P R E S E N T A T I O N . . . Net Interest Margin Operational Highlights Net Interest Margin (1) 3.70 • Cost of deposits increased only 1 bp from 4Q17 to 1Q18 3.60 • Non-interest bearing deposits are 3.50 3.51 19% of total deposits 3.40 3.38 • Balanced interest rate risk position 3.3
Slide 10: Deposit Growth with Branch Consolidation
I N V E S T O R P R E S E N T A T I O N . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch Strength and Durability of Low-Cost 7,000 150 Deposit Position Average Per Deposits Branch Millions) ($ • Target average branch size above 130 6,000 $100 million 110 • On schedule to cons
Slide 11: Loan Composition Emphasizes Commercial
I N V E S T O R P R E S E N T A T I O N . . . Loan Composition Emphasizes Commercial Total Loans Outstanding Loans by Customer Segment - 2018 2014* 2015* 42% 2016* 58% 2017* 2018** Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 (in millions) Residential Home Equ
Slide 12: Conservative CRE Portfolio Reflects Strategic Execution
I N V E S T O R P R E S E N T A T I O N . . . Conservative CRE Portfolio Reflects Strategic Execution CRE to Total Risk Based Capital 0 100 200 300 400 500 600 700 800 900 1,000 Peer 1 Peer 2 Peer 3 Peer 4 Capacity to grow Investor Peer 5 CRE by $305 million while Peer 6 remaining under 300%. Peer 7
Slide 13: Generating Consistent Attractive Returns
I N V E S T O R P R E S E N T A T I O N . . . Generating Consistent Attractive Returns 15.0% 1.25% 1.20% 14.0% 1.15% 13.0% 1.10% 12.0% 1.05% Return Assetson 1.00% 11.0% 0.95% 10.0% 0.90% 9.0% 0.85% 0.80% 8.0% 0.75% Return on Tangible Equity Common onTangible Return 7.0% 0.70% 1 1 1 2014 2015 2016 20
Slide 14: 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 . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.15%(1) 0.07% 0.15% 0.10% 0.02% (Annualized) 1.20% 1.06% 1.00% 0.91% 0.80% 0.60% 0.52% 0.40% 0.35% 0.34% 0.20% Performing Loans as P
Slide 15: Our Strategy
© occanFinst Our Strategy )O°®
Slide 16: 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 . . . 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 $1,518
Slide 17: New Jersey Expansion Opportunities
I N V E S T O R P R E S E N T A T I O N . . . New Jersey Expansion Opportunities • New Jersey is a strong market (1) • Population of 8.9 million • Most densely populated state • 11th most populous state • Median household income of $72,000 • Significant opportunities for acquisitions to build custom
Slide 18: 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 . . . Regional Opportunities for M&A Philadelphia Area New York City Metro Area • 8 Banks with Assets Between $400M and $1B • 9 Banks with Assets Between $400M and $1B • 13 Banks with Assets Between $1B and $10B • 12 Banks with Assets Between $1B and $10B New
Slide 19: Data Driven Digital Strategy
I N V E S T O R P R E S E N T A T I O N . . . Data Driven Digital Strategy Digital Offerings Mobile Deposits Mobile Activations • Online Banking Up 56% y/y Up 21% y/y • Mobile Banking Apps • Biometric ID Verification • Remote Check Deposit Retail Online • Bill Pay Banking 68,000+ Monthly • Pop Money
Slide 20: 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 . . . Protecting Our Clients with Cyber Security • Remains current with evolving industry-wide 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 • Qu
Slide 21: Strategic Capital Allocation Generates Shareholder Returns
I N V E S T O R P R E S E N T A T I O N . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders • Stable & competitive dividend $25.0 th • 85 consecutive quarter • Historical Payout Ratio of 30% to 40% $20.0 • 1.8 million shares available for $15.0 repurchas
Slide 22: An Experienced Management Team
I N V E S T O R P R E S E N T A T I O N . . . An Experienced Management Team Years at Executive Title Selected Experience OceanFirst Chairman, President, Patriot National Bancorp Christopher D. Maher 5 Chief Executive Officer Dime Community Bancshares Executive Vice President, Michael J. Fitzpatrick
Slide 23: 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 . . . OceanFirst Foundation: Serving Our Communities • Over $35.2 million has been granted to organizations serving OceanFirst’s market • Provided $500,000 in grants dedicated to assisting our neighbors after Superstorm Sandy hit the Jersey Shore in 2012 • Fir
Slide 24: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 33 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong balance sheet underpins fl
Slide 25: 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 25
Slide 26: Appendix
(@} Ocean FIRST A ppendi a tS) = Sg i
Slide 27: Colonial American Bank Acquisition
I N V E S T O R P R E S E N T A T I O N . . . 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 Supports Retail • Favorable financial terms (adjusted for DTA realization Expansion
Slide 28: Cape Bancorp Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Cape Bancorp Acquisition • 85% stock and 15% cash, valued at $196 million • Favorable financial terms (1) • 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 va
Slide 29: Ocean Shore Holding Co. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . 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 and 20% cash, valued at $181 million • Favorable financial terms(1
Slide 30: Sun Bancorp, Inc. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . 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 term
Slide 31: State & Local Tax Sensitivity
I N V E S T O R P R E S E N T A T I O N . . . State & Local Tax Sensitivity Direct Exposure • Home Equity Interest Deduction % of total loan portfolios (total loans of $3,976mm) Elimination; $281 million total 3% exposure 7% • Residential mortgage borrowers with property taxes in excess of $10,000 -
Slide 32: OceanFirst Milestones – Years of Growth
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Milestones – 116 Years of Growth IPO to Mutual Depositors Created OceanFirst Colonial American Foundation Bank Acquired Established Commercial LPO Founded, Established Adopted National Trust and Asset Expansion into Point Pleasant, NJ Commerci
Slide 33: Favorable Competitive Position
I N V E S T O R P R E S E N T A T I O N . . . Favorable Competitive Position Mega Banks OceanFirst Bank Community Banks # of Branches Dep. In Mkt. # of Dep. In Mkt. Dep. In Mkt. Institution ($000) Institution # of Branches Branches ($000) ($000) 76 5,868,955 TD Bank (Canada) 127 19,832,103 Manasquan
Slide 34: Commercial Portfolio Segmentation
I N V E S T O R P R E S E N T A T I O N . . . Commercial Portfolio Segmentation Total Commercial Loan Exposure by Real Estate Investment by Property Industry Classification Classification Educational Services Public Administration Miscellaneous Miscellaneous 1.8% 4.8% 16.0% 1.3% Office Manufacturing
Oceanfirst Financial — Investor Presentation (May 2018) on 6ix