Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (September 2020)
50 slides from Oceanfirst Financial's investor presentation, Sep 9, 2020
Slide 1: OceanFirst Financial Corp. Investor Presentation September 2020
. . . Exhibit 99.1 OceanFirst Financial Corp. Investor Presentation September 2020
Slide 2: Forward Looking Statements
INVESTOR PRESENTATION . . . 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, str
Slide 3: About OceanFirst Financial Corp.
. . . About OceanFirst Financial Corp. 3
Slide 4: OceanFirst Financial Corp.
INVESTOR PRESENTATION . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $974.8 million1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Total Assets of $11.3 billion2 • 62 Full-Service Branches in New Jersey and Metropolitan New York City Headquarters OceanFirst
Slide 5: Investment Thesis – Well Positioned for the Post-COVID-19 Environment
INVESTOR PRESENTATION . . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Organic Growth Including Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 57 basis points • Strength of Assets • Strong and diversified balance s
Slide 6: Commitment to Execution
INVESTOR PRESENTATION . . . Commitment to Execution Our Recent …Lead to Our Path Forward Accomplishments... • Local to Regional Scale • Seven Acquisitions Closed in Less Than Five Years, Including Two River • Increased Investment in Digital Bancorp (NASDAQ: TRCB) & Country Banking & Customer Engagem
Slide 7: Our Business
. . . Our Business 7
Slide 8: Second Quarter 2020 Highlights
INVESTOR PRESENTATION . . . Second Quarter 2020 Highlights Financial Highlights Operational Highlights • Core Net Income of $21.6 million • Completed full integration of Two • Core Diluted EPS of $0.36 River Bank • Net Interest Margin of 3.24% • Branch consolidation • Core ROA of 0.78%, and Core ROT
Slide 9: Reserves for Credit Losses
INVESTOR PRESENTATION . . . Reserves for Credit Losses The ACL of $42.4m plus the unamortized credit mark of $35.4m $42.4m provided 92 basis points of coverage for the loan portfolio *Note: Net change-offs averaged 17 basis points over the past 13.5 years, including the period of the Great Recession
Slide 10: SBA Paycheck Protection Program Update
INVESTOR PRESENTATION . . . SBA Paycheck Protection Program Update As of August 31, 2020, 213 loans totaling $42.2 million were submitted to the SBA for forgiveness consideration. . . . Loans approved have an estimated fee income of approximately $17.6 million that will be earned over the life of th
Slide 11: Net Interest Margin
INVESTOR PRESENTATION . . . Net Interest Margin Operational Highlights Net Interest Margin 2 4.50 • Non-interest bearing deposits 4.00 are 23% of average balance of 3.25 1 3.50 total deposits 3.18* 3.00 • Balanced interest rate risk 2.50 position 2.00 Percentage • An extraordinary surplus 1.50 0.08
Slide 12: Deposit Growth with Branch Consolidation
INVESTOR PRESENTATION . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch 1 10,000 150 Average Deposits Per Branch($ Millions) 9,000 125 Strength and Durability of Low- 8,000 Cost Deposit Position 7,000 100 • $145 million average branch size as of 6,000 June 30, 2020, doubling i
Slide 13: Loan Composition Emphasizes Commercial
INVESTOR PRESENTATION . . . Loan Composition Emphasizes Commercial1 Total Loans Outstanding Loans by Customer Segment – 2020 2015 2016 34% 2017 2018 66% 2019 2020 Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 (in millions) Residential Home
Slide 14: Generating Consistent & Attractive Returns
INVESTOR PRESENTATION . . . Generating Consistent & Attractive Returns 16.0% 1.50% 1.35% 14.0% 1.20% 12.0% 1.05% 10.0% Return on Assets 0.90% 8.0% 0.75% 0.60% 6.0% 0.45% 4.0% 0.30% 2.0% Return on Tangible Common Equity on Tangible Return 0.15% 0.0% 0.00% 20151 20161 20171 2018 1 20191 2020 1, 2 Core
Slide 15: Credit Metrics Reflect Conservative Culture
INVESTOR PRESENTATION . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.05% 0.15% 0.10% 0.05% 0.02% 0.02% 1.00% 0.91% 0.90% 0.80% 0.70% 0.60% 0.52% 0.50% 0.40% 0.35% 0.31% 0.29% 0.30% 0.25% 0.20% 0.10% Non-Performing Loan
Slide 16: Our Strategy
. . . Our Strategy 16
Slide 17: Asset Growth Supplemented by Strategic M&A
INVESTOR PRESENTATION . . . Asset Growth Supplemented by Strategic M&A Opportunistic Acquisitions of Local Community Banks Target Closing Date Transaction Value Total Assets Colonial American Bank July31,2015 ~$ 12million $ 142million Cape Bancorp May 2, 2016 ~$196 million $1,518 million Ocean Shore
Slide 18: New Jersey Expansion Opportunities
INVESTOR PRESENTATION . . . 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 household income of $72,000 • Significant opportunities for acquisitions to build custo
Slide 19: Regional Opportunities for M&A
INVESTOR PRESENTATION . . . Regional Opportunities for M&A 10% of the total population of the United States resides within a 2-hour drive of Headquarters Philadelphia Area New York City Metro Area • 7 Banks with Assets Between $400M and $1B • 7 Banks with Assets Between $400M and $1B • 9 Banks with
Slide 20: Digital Culture – Years of Transformation
INVESTOR PRESENTATION . . . Digital Culture – 5 Years of Transformation Continuous Investment In Talent and Technologies Artificial Intelligence • Funded from ongoing earnings and branch consolidations Team Digital Strategy & Customer First FinTech Equity Project Digital Customer Data Science Team I
Slide 21: Digital Capabilities & Customer Ratings
INVESTOR PRESENTATION . . . Digital Capabilities & Customer Ratings Mobile Capabilities Survey Mobile App Customer Ratings (# of features, out of 18) (Apple & Google) OceanFirst 12 OceanFirst 4.7 # Ratings = 5,669 National / 4.5 National / Regional 10 Regional Large MidAtlantic 4.5 FinTechs / 10 Dig
Slide 22: Digital Customer Acquisition
INVESTOR PRESENTATION . . . Digital Customer Acquisition Attaining Scale… … And Attracting Valuable Customers • Digital marketing campaign Customer Usage Statistics* Online Branch launched in December 2018 Digital Usage 86.8% 70.7% • Artificial Intelligence campaigns added in Mobile Usage 70.1% 52.8
Slide 23: Treasury Management Services
INVESTOR PRESENTATION . . . Treasury Management Services Treasury Management Solutions: • ACH Origination, Receipts, Addenda Reporting and Debit Blocking Accounts1 Balances1 • Digital Account Opening Over 33,000 Over $3.2 billion • Accept Multiple Forms of Payment • Account Analysis Statements • Bus
Slide 24: Protecting Our Clients with Cyber Security
INVESTOR PRESENTATION . . . 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 • Qualified, certified
Slide 25: Strategic Capital Allocation Generates Shareholder Returns
INVESTOR PRESENTATION . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to $65 Shareholders $60 $55 $50 • Stable & competitive dividend $45 th $40 • 94 consecutive quarter $35 • Historical Payout Ratio of 30% to $30 40% $25 $20 $15 • Repurchased 648,851 shares YTD Ann
Slide 26: An Experienced Management Team
INVESTOR PRESENTATION . . . An Experienced Management Team Years at Executive Title Selected Experience OceanFirst1 Chairman, President, Patriot National Bancorp Christopher D. Maher 7 Chief Executive Officer Dime Community Bancshares Executive Vice President, Wachovia Bank N.A. Joseph J. Lebel III
Slide 27: OceanFirst Foundation: Serving Our Communities
INVESTOR PRESENTATION . . . OceanFirst Foundation: Serving Our Communities • Over $41 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 coronavirus pandemic • First
Slide 28: Investment Thesis – Well Positioned for the Post-COVID-19 Environment
INVESTOR PRESENTATION . . . Investment Thesis – Well Positioned for the Post-COVID-19 Environment • Organic Growth Including Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 57 basis points • Strength of Assets • Strong and diversified balance s
Slide 29: 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 29
Slide 30: Appendix
. . . Appendix 30
Slide 31: Country Bank Holding Company, Inc. Acquisition
INVESTOR PRESENTATION . . . Country Bank Holding Company, Inc. Acquisition • 100% Stock transaction, valued at $113 million • Expands branch network to support NYC lending efforts • Favorable financial terms1 • Price/Tangible Book Value of 151% • Price/Core Deposit Premium of 7.5% • Price/Earnings (
Slide 32: Two River Bancorp Acquisition
INVESTOR PRESENTATION . . . Two River Bancorp Acquisition • 75% stock and 25% cash, valued at $197 million • Strengthens presence in Monmouth County and expands market area into northern New Jersey • Favorable financial terms1 • Price/Tangible Book Value of 174% • Price/Core Deposit Premium of 9.5%
Slide 33: Favorable Competitive Position
INVESTOR PRESENTATION . . . Favorable Competitive Position Community Banks serving Mega Banks OceanFirst Bank Central & Southern NJ # of Branches Dep. In Mkt. # of Dep. In Mkt. Dep. In Mkt. Institution ($000) Institution # of Branches Branches ($000) ($000) 61 7,007,796* TD Bank (Canada) 125 22,671,
Slide 34: Commercial Forbearance Portfolio
INVESTOR PRESENTATION . . . Commercial Forbearance Portfolio 1st Forbearance Peak $1,122M 67% of Commercial Clients Have Committed to Monthly Payments as of August 31, 2020 Commercial Forbearances (1st and 2nd) at August 31, 2020 total $569 million Projected 2nd Forbearance Peak $500M Dec 2020 The S
Slide 35: Commercial Loan Forbearance
INVESTOR PRESENTATION . . . Commercial Loan Forbearance Commercial Portfolio Forbearance Requests Total Outstanding Balance: $5.6bn Total Forbearance Requests: $1.2bn *WA LTV: 56.7% *WA DSCR: 1.85x No delinquency (in life of loan): 68% Forbearance requests are well- secured and represent 22% of comm
Slide 36: Commercial Loan Forbearance
INVESTOR PRESENTATION . . . Commercial Loan Forbearance Reviewed $1.2 billion in Restaurant & maturing forbearance Hospitality requests $109 million to resume full payment or improve to interest only Out of $1.2 billion reviewed, $236 million are in Restaurant & Hospitality . . . SEPTEMBER | 2020 36
Slide 37: Commercial Loan Forbearance – Initial Forbearance Day
INVESTOR PRESENTATION . . . Commercial Loan Forbearance Initial Forbearance 90 Day . . . SEPTEMBER | 2020 37 Forbearance Data as of August 31, 2020
Slide 38: Commercial Loan Forbearance – 2nd Full Forbearance Day
INVESTOR PRESENTATION . . . Commercial Loan Forbearance 2nd Full Forbearance 180 Day . . . SEPTEMBER | 2020 38 Forbearance Data as of August 31, 2020
Slide 39: Commercial Loan Forbearance – Loan to Value
INVESTOR PRESENTATION . . . Commercial Loan Forbearance 2nd Full Forbearance - Loan to Value *WA LTV: 53.9% *WA DSCR: 2.00x . . . Forbearance Data as of August 31, 2020 SEPTEMBER | 2020 39 *WA LTV and WA DSCR as of most recent financial review
Slide 40: Consumer Forbearance Portfolio
INVESTOR PRESENTATION . . . Consumer Forbearance Portfolio 1st Forbearance Peak $329M 2nd Forbearance Peak $187M As compared to original projection of $237M at July 15th Consumer Forbearances (1st and 2nd) at August 31, 2020 total $206M, down 37% from peak of $329M Note: Data based on the date of ex
Slide 41: Consumer Loan Forbearance Profile
INVESTOR PRESENTATION . . . Consumer Loan Forbearance Profile Consumer Forbearances Peaked at $329M on June 13, 2020 Consumer Portfolio 90 Day Forbearance Portfolio 180 Day Forbearance Portfolio Total Outstanding Balance: $2.9bn Total Outstanding Balance: $22M Total Outstanding Balance: $184M WA LTV
Slide 42: Consumer Loan Forbearance Credit Metrics
INVESTOR PRESENTATION . . . Consumer Loan Forbearance Credit Metrics Each Forbearance period is 90 days, or a total of up to 180 days. Current 90 Day 90 Initial Initial Forbearance Current story 180Day . . . Continuing Forbearance SEPTEMBER | 2020 42 Forbearance Data as of August 31, 2020
Slide 43: Consumer Loan Forbearance Credit Metrics
INVESTOR PRESENTATION . . . Consumer Loan Forbearance Credit Metrics Total Portfolio Forbearance Portfolio LTV <= 80% LTV > 80% LTV <= 80% LTV > 80% $2.7bn (93%) $217M (7%) $186M (91%) $19M (9%) 1 1 Only $6.4 million of loans exhibit an LTV > 80% and a FICO < 650 FICO >= 650 FICO < FICO >= 650 $555M
Slide 44: Consumer Loan Forbearance by County
INVESTOR PRESENTATION . . . Consumer Loan Forbearance by County Sharply increasing real estate values should protect against credit losses Annual County Median Price Increase* Monmouth 9.2% Ocean 7.9% Atlantic 19.0% . . . Cape May 36.7% SEPTEMBER | 2020 Forbearance Data as of August 31, 2020 44 *201
Slide 45: Credit Costs Consistently Lower than Peer Group
INVESTOR PRESENTATION . . . Credit Costs Consistently Lower than Peer Group Strong credit performance yields low net charge offs through the cycle. Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Note: Peer Group 2 - Commercial Banks between $10BN and $100BN in assets;
Slide 46: 2007 to 2020 Cumulative Credit Losses Also Outperform
INVESTOR PRESENTATION . . . 2007 to 2020 Cumulative Credit Losses Also Outperform Cumulative OCFC losses are 43% lower than proxy peers and 70% lower than UBPR peers. Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. Note: Peer Group 2 - Commercial Banks between $10BN and
Slide 47: Largest Segments Drive Long Term Performance
INVESTOR PRESENTATION . . . Largest Segments Drive Long Term Performance Source: S&P Global Market Intelligence; FFIEC UBPR Peer Group Average Report. . . . Note1: Peer Group 2 - Commercial Banks between $10BN and $100BN in assets; Peer Group 3 - Commercial Banks between $3BN and $10BN in assets. No
Slide 48: 2007 to 2020 Cumulative Losses By Segment
INVESTOR PRESENTATION . . . 2007 to 2020 Cumulative Losses By Segment Cumulative OCFC losses are 26% lower than UBPR peers. Cumulative OCFC losses are 72% lower than UBPR peers. Cumulative OCFC losses are 44% lower than UBPR peers. Cumulative OCFC losses are 48% lower than UBPR peers. Source: S&P Gl
Slide 49: Effective Interest Rate Risk Management
INVESTOR PRESENTATION . . . Effective Interest Rate Risk Management Duration 5.0 All asset categories managed with limited duration 4.0 3.0 Years 2.0 1.0 0.0 Securities Mortgage Loans Consumer Loans Commercial Loans Total Assets FHLB Term Time Deposits (Weighted Average) Borrowings Rate Characterist
Slide 50: OceanFirst Milestones – Years of Growth
INVESTOR PRESENTATION . . . OceanFirst Milestones – 118 Years of Growth Crossed $10 IPO to Mutual Depositors billion threshold Created Two River Colonial American Adopted National OceanFirst Bancorp Bank Acquired Bank Charter Foundation Acquired Founded, Established Established Commercial LPO Countr
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