Slide 1: OceanFirst Financial Corp. Investor Presentation
Exhibit 99.1 ... OceanFirst Financial Corp. Investor Presentation August 2023 The 2Q 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 July 20, 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: 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% 3.46% 3.52% 384,986 3.37% 24.0% 3.25% 3.17% 3.16% 2.93% 377,477 Net Interest 312,951 305,338 Income CAGR 240,502 255,971 169,218 190,911 120,262 76,829 2015 2016 2017 2018 2019 202
Slide 6: Successful Commercial Loan Growth and Geographic Diversification
Successful ... Commercial Loan Growth and Geographic Diversification Commercial Loans by Geography as of Q2-23 Emphasis on Commercial (Commercial % of Loan Portfolio) 53% of commercial Increase of $6.0B loans originated in in commercial Boston & Baltimore Philadelphia and NY loans since 2015 6% +20%
Slide 7: Balanced Approach to Deposit Pricing and Growth
Balanced . . . Approach to Deposit Pricing and Growth Deposit Composition ($’millions) 10,158 9,428 9,733 9,675 1,854 2,133 2,412 2,101 6,329 Deposit Stratification 5,815 3,538 1,377 3,647 3,830 4,343 1,151 4,202 4,188 770 783 757 2,539 2,350 784 714 1,230 1,917 1,627 1,954 736 570 578 1,491 1,488 3
Slide 8: Conservative Credit Risk Profile
Conservative ... Credit Risk Profile Non-performing Loans by Type as % of Loans1 Continued Focus on Credit Risk1 0.54% 0.52% 0.01% 0.47% 0.52 0.02% 0.47 0.45% 0.35% 0.01% 0.36% 0.31% 0.08% 0.03% 0.29% 0.00% 0.30% 0.35 0.32% 0.05% 0.10% 0.22% 0.31 0.12% 0.00% 0.19 0.19 0.00% 0.00% 0.29 0.05% 0.12% 0.
Slide 9: Operational Efficiency
Operational ... Efficiency Operating Efficiency ($’millions) Deposits per Branch ($’millions) 3.8x 267 255 Assets per Branch 400 20 207 Assets per FTE 350 18 16 300 14 152 250 12 200 10 113 356 94 99 345 8 150 13250 13 13 71 69 12 6 100 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 Tangible Book Value per Share 1 Total Capital Return per Share 43.7% 116.2% $26.65 The growth in TBV per common share $25.61 $2.98 (TBVPCS1) is attributed to: $23.60 $2.98 ▪ Minimally dilutive and strategic $2.86 $21.36
Slide 11: Quarterly Earnings Update
INVESTOR PRESENTATION ... Quarterly Earnings Update 11
Slide 12: Loan Portfolio Trends
Loan Portfolio ... Trends Moderated Loan Growth in the Portfolio ($’millions) 5.17% 4.96% ▪ Loan growth has moderated prudently, with 4.76% the expectation of single-digit growth for the remainder of the year. 4.18% 3.95% ▪ Diversified portfolio with a focus on CRE Investor Owned and Residential loa
Slide 13: 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 14: 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 ($’000)1 Special Mention and Substandard Loans ($’000) 0.19% 164,106 0.18% 151,683 0.19% 0.19% 0.18% 60,812 54,330 119,011 0.15% 0.15% 110,744 0.14
Slide 15: 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) 0.72% 0.71% 0.69% 0.69% 0.70% NCO / Average Loans 0.10% 0.10% 0.17% 0.14% 0.12% were 0% for all periods presen
Slide 16: 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 Q1-23 were minimal, totaling $26.9 million. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1-23 OCFC CR
Slide 17: Deposit Trends
Deposit . . . Trends ▪ Deposits (excl. brokered CD’s) remained stable, decreasing by less Shift in Deposit Mix to Drive Retention ($’millions) than 0.2% from the linked quarter. 9,959 9,993 10,158 9,831 9,675 ▪ Continued mix shift in Q2-23 towards time deposits is driven by an 1,854 2,312 2,326 2,10
Slide 18: Total Deposits Are Insured and Population Remains Granular
. . . Total Deposits Are Insured and Population Remains Granular ~85% of Total Deposits ($’millions) 9,831 9,959 9,675 9,993 10,158 ▪ OCFC’s deposit composition is extremely granular with 98% 15.1% of all deposit accounts having less than $250K. 22.7% 22.5% 21.3% 18.6% ▪ OCFC customers have long ten
Slide 19: Net Interest Income and Net Interest Margin Trends
Net Interest ... Income and Net Interest Margin Trends Net Interest Income ($’000) NIM Bridge 106,488 3.34% 98,802 -0.27 95,965 92,109 90,797 0.01 -0.06 3.02% Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Net Interest Income Q1-23 NIM Ordinary course Quarter-specific Liquidity build- Q2-23 NIM rate impacts impacts
Slide 20: Expense Discipline and Focused Investment
Expense . . . Discipline and Focused Investment Core Non-Interest Expense1 ($’000) ▪ Q2-23 core operating expenses increased $1.7 million 61,217 62,930 from the prior linked quarter and totaled $62.9 million. 57,919 59,045 59,341 2,397 2,519 2,128 3,206 2,777 11,111 13,108 12,923 ▪ The current quart
Slide 21: Generating Consistent and Attractive Returns
Generating ... Consistent and Attractive Returns Book Value and Tangible Book Value per Common Share ($)1 Core ROAA1, ROTE1, and ROTCE1 27.37 27.07 26.81 15.86% 14.53% 14.40% 26.04 12.80% 25.73 15.01% 10.36% 13.73% 13.62% 12.15% 17.72 9.84% 17.08 17.42 1.22% 1.13% 1.11% 15.96 16.30 1.00% 0.81% Q2-22
Slide 22: TBV Growth Supported by Prudent Liquidity Management
Leading . . . TBV Growth Supported by Prudent Liquidity Management Tangible Book Value per Share Growth (Q1-22 to Q1-23)(1) 10% 9.3% 5% 0% -5% -10% -15% -20% -25% -30% OCFC Peer 1 Peer 2 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
Slide 23: 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 Low single-digit • Maintain loan-to-deposits ratio
Slide 24: Appendix
INVESTOR PRESENTATION ... Appendix 24
Slide 25: Liquidity Sources are Robust and Diverse
Liquidity . . . Sources are Robust and Diverse Liquidity remains robust: 4,026 260% ▪ Adjusted uninsured deposits accounted for 15% of total deposits. 702 ▪ Cash held on balance sheet totaled $338 million(1). 175 ▪ OCFC had no outstanding borrowings from the Federal Reserve Discount Window or Bank T
Slide 26: 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 1,812 5% 4% 1,749 1,765 4% Rate Exposure: Asset-Backed • 22% floating 16% 3.40% 3.47% • 78% fixed 2.83% Total: 2.27% 1.90% $1.8B
Slide 27: 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
Slide 28: Adjusted Uninsured Deposit Bridge Detail
. . . Uninsured Deposit Bridge Detail Adjusted Adjusted Uninsured Deposit Bridge #039;millions Schedule/Line June 30, 2023 Estimated Uninsured Deposits RC-O Line M.2 5,057 1 Less: Collateralized Municipal Deposits (2,027) Less: Gross Exclusion Deposits2 (1,482) Estimated Adjusted Uninsured Deposits, ne
Slide 29: Non-GAAP Reconciliations (1 of 2)
Non-GAAP ... Reconciliations (1 of 2) Non-GAAP Reconciliation For the Three Months Ended June 30, March 31, December 31, September 30, June 30, #039;000 2023 2023 2022 2022 2022 Core Earnings: Net income available to common stockholders (GAAP) 26,793 26,879 52,268 37,607 27,957 Add (less) non-recurring
Slide 30: Non-GAAP Reconciliations (2 of 2)
Non-GAAP ... Reconciliations (2 of 2) Non-GAAP Reconciliation June 30, March 31, December 31, September 30, June 30, #039;000 2023 2023 2022 2022 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 Core