Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Q3 2024 Earnings Presentation
21 slides from Oceanfirst Financial's earnings presentation, Oct 17, 2024
Slide 1: OceanFirst Financial Corp. 3Q 2024 Earnings Release Supplement
. . . 1 The 3Q 2024 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 October 17, 2024. Exhibit 99.2 OceanFirst Financial Corp. 3Q 2024 Earnings Release Supplement1 October 2024
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: Q3-24 Financial Highlights
. . .Q3-24 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. (2) CET1 ratio represents an estimate as of Q3-24. (3) PCD loans are not included in these metrics. Refer to Ass
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 with the expectation of low to mid-single digit annualized growth by Q4-24. ▪ Loan yields plateaued for Q3-24 and may contract slightly as our existing portfolio reprices with rate cuts. 5,33
Slide 6: Diversified CRE Portfolio with Conservative Risk Profile
. . .Diversified CRE Portfolio with Conservative Risk Profile ▪ Underlying collateral is diversified. ▪ Low concentration in the Multi-Family portfolio, which represents 7% of total assets. ▪ Maturity wall is modest and has a minimal impact: Our CRE investor owned maturity wall, totaling $820 millio
Slide 7: Quarterly Credit Trends (1 of 2)
. . . Strong asset quality trends driven by prudent loan growth and credit decisioning. Quarterly Credit Trends (1 of 2) 7 Non-Performing Loans and Assets ($’000)(1) Special Mention and Substandard Loans ($’000) Note #1: At September 30, 2024, of the Special Mention loans and Substandard loans repre
Slide 8: Quarterly Credit Trends (2 of 2)
. . .Quarterly Credit Trends (2 of 2) 8 Loan Allowance for Credit Losses (ACL) Plus PCD & General Credit Marks / Total Loans NCOs / (Recoveries) and Provision for Credit Loss Expense ($’000) 0.09% 0.63% Q3-23 0.07% 0.66% Q4-23 0.07% 0.66% Q1-24 0.06% 0.69% Q2-24 0.06% 0.69% Q3-24 0.72% 0.73% 0.73% 0
Slide 9: Track Record of Strong Credit Performance
. . . COVID-19 Pandemic Track Record of Strong Credit Performance 9 ▪ From 2006 to Q3-24, inclusive of the Global Financial Crisis, Hurricane Sandy, and the COVID-19 Pandemic, OCFC’s CRE NCO to average CRE loans totaled 7 bps per year compared to 70 bps for all commercial banks between $10 - $50 bil
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. ▪ Non-maturity deposits increased by $269 million (or 3.5%) from the prior quarter. ▪ High yield savings d
Slide 11: Net Interest Income and Net Interest Margin Trends
. . .Net Interest Income and Net Interest Margin Trends 11 (1) Core NIM excludes purchase accounting and prepayment fee income. Refer to the Earnings Release for additional information. Core NIM1 vs NIM NIM Bridge 2.91% 2.85% Q3-23 2.82% 2.77% Q4-23 2.81% 2.77% Q1-24 2.71% 2.67% Q2-24 2.67% 2.65% Q3
Slide 12: Core Efficiency Ratio: Expense Discipline and Focused Investment
. . . Core Efficiency Ratio1 Expense Discipline and Focused Investment 12 Core Non-Interest Expense (1) ($’000) 8,411 7,999 7,761 8,377 9,512 5,258 2,858 2,732 2,161 1,970 6,086 6,430 5,956 6,018 5,940 2,557 2,723 2,717 2,685 2,618 6,638 6,390 6,329 6,243 6,183 35,534 32,126 32,759 33,136 35,844 Q3-
Slide 13: Generating Consistent Returns
. . .Generating Consistent Returns 13 Book Value and Tangible Book Value per Common Share ($)1, 2 Core ROAA1, ROTE1, and ROTCE1 • Tangible book value per common share increased by $1.35 (or 8%) compared to the same quarter last year. • Capital remains strong and above “well capitalized” levels. • Re
Slide 14: Business Model Strength Driving Significant Capital Return
. . .Business Model Strength Driving Significant Capital Return 14 $12.33 $0.49 $0.55 $1.01 $13.67 2015 $1.04 $1.55 $12.94 2016 $1.09 $2.15 $13.58 2017 $1.39 $2.77 $14.26 2018 $1.97 $3.45 $15.13 2019 $2.25 $4.13 $14.98 2020 $2.86 $4.81 $15.93 2021 $2.98 $5.55 $17.08 2022 $2.98 $6.35 $18.35 2023 $3.3
Slide 15: Management 2024 Outlook
. . .Management 2024 Outlook 15 Loans Deposits Operating Expenses Net Interest Income Capital • We expect low to mid-single digit annualized growth in Q4-24. • Maintain loan-to-deposit ratio ~100% for the entire year. • Continued mix shift may pressure funding costs. Low to mid-single digit annualiz
Slide 16: Investor Presentation Appendix
. . . I N V E S T O R P R E S E N T A T I O N 16 Appendix
Slide 17: Conservative Risk Profile of CRE IO Office & Construction
. . .Conservative Risk Profile of CRE IO Office & Construction 17 Portfolio Highlights • 96% of Office & Construction loans are pass- rated (not classified or criticized). • 93% of Office & Construction loans are classified as non-Central Business District loans. • CBD loans comprise <1% of total as
Slide 18: Northeast Outperforms Through Credit Cycles
. . . Hurricane Sandy Global Financial Crisis COVID-19 Pandemic Northeast Outperforms Through Credit Cycles… 18 ▪ Historically, net charge-offs for Northeastern headquartered banks have greatly outperformed major exchange traded U.S. banks headquartered in other regions ▪ Median net charge-offs / av
Slide 19: Similar Story in Commercial Real Estate Portfolios
. . . Hurricane Sandy Global Financial Crisis COVID-19 Pandemic …With a Similar Story in Commercial Real Estate Portfolios 19 ▪ Northeastern banks’ CRE portfolio net charge-offs have also historically outperformed major exchange traded banks in other regions ▪ Median CRE net charge-offs / average as
Slide 20: Non-GAAP Reconciliations (1 of 2)
. . .Non-GAAP Reconciliations (1 of 2) Non-GAAP Reconciliation For the Three Months Ended $'000 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Core Earnings: Net income available to common stockholders (GAAP) 24,112 23,369 27,663 26,678 19,663 Add (less) non-rec
Slide 21: Non-GAAP Reconciliations (2 of 2)
. . .Non-GAAP Reconciliations (2 of 2) Non-GAAP Reconciliation $'000 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Tangible Equity Total stockholders' equity 1,694,508 1,676,669 1,665,837 1,661,945 1,637,604 Less: Goodwill 506,146 506,146 506,146 506,146 506,14