Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Shareholder Meeting (May 2007)
19 slides from Oceanfirst Financial's shareholder meeting presentation, May 17, 2007
Slide 1: Shareholder Presentation – May 17, 2007
EXHIBIT 99.1 SHAREHOLDER PRESENTATION – MAY 17, 2007 This is the 105th Annual Meeting of the Corporate Entity now known as OceanFirst Financial Corp., and today marks the eleventh time I have had the privilege to address this annual shareholders meeting since our 1996 conversion as a publicly owned
Slide 2: Diversifying income amid squeezed bank margins
today. I refer you to the Power Point presentation that we will review later this morning, which includes the Forward-Looking Statements on page 2, and is contained in the left side pocket of the folder. Please take careful note of the required caution we must provide you regarding forward-looking s
Slide 3: New business lines to diversify revenue
At OceanFirst, we opened several business lines, over and above mortgage banking, to accomplish this. Among them: Alternative Investment Sales, Trust and Asset Management, Captive Private Mortgage Insurance, Merchant and Title Insurance Services and our newest and most promising product, reverse mor
Slide 4: Moving past Columbia and executing the community bank plan
We have, and will continue to react appropriately to the current situation, however. The fact is that we will be moving past Columbia’s mortgage banking business line, executing our Community Bank business Plan after appropriately dealing with the issues of the day. Our business plan remains optimis
Slide 5: Update on recent events at the Company
As promised, I will now spend some time to bring you up to date on the recent events at the Company which have been heavily publicized. I refer you back to your folder and the Power Point Presentation in the left side pocket. POWERPOINT As we move forward, putting this Columbia episode behind us thi
Slide 6: Q&A, Adjourn Meeting
Q&A ADJOURN MEETING 6
Slide 7: Welcome to the 2007 Annual Meeting of Shareholders
Exhibit 99.1 WELCOME TO THE 2007 ANNUAL MEETING OF SHAREHOLDERS OceanFirst Financial Corp. MAY 17, 2007 NASDAQ: OCFC
Slide 8: Forward-looking statements
OceanFirst Financial Corp. This presentation contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe”, “expect”, “i
Slide 9: Subprime Mortgage Lending
Subprime Mortgage Lending Subprime Mortgage Loans – What Are They? Why Did OceanFirst Make Subprime Loans? What Happened To Cause The Subprime Problems? What Corrective Action Is OceanFirst Taking? How Long Will It Take To Be Completely Resolved? OceanFirst Without Columbia And Subprime Lending? 3 N
Slide 10: Subprime Mortgage Loans: What Are They?
Subprime Mortgage Loans What Are They? Loans made on a residence to borrowers who generally do not satisfy the credit documentation or standards of the prime market Enables borrowers with less than perfect credit, who cannot obtain a loan in the conventional market, to own a home Generally, a credit
Slide 11: Why Did OceanFirst Make Subprime Loans?
Why Did OceanFirst Make Subprime Loans? OceanFirst did not make subprime loans directly, but through our operating subsidiary, Columbia Home Loans, LLC, headquartered in Westchester County, New York While important to OceanFirst, Columbia’s mortgage banking revenue was not a major contributor to Com
Slide 12: Why Did OceanFirst Make Subprime Loans? (Continued)
Why Did OceanFirst Make Subprime Loans? (Continued) Selling the loans is one way to mitigate risk of default, however, misrepresentations in the application process or Early Payment Defaults (EPD) by the borrower generally result in the requested repurchase of the loans Columbia was one of many lend
Slide 13: What Happened To Cause The Subprime Problems?
What Happened To Cause The Subprime Problems? The entire subprime lending industry suffered an incredibly rapid reversal of fortune late in 2006 Media Reports and Industry Press Releases have been remarkably consistent in calling attention to one particular subprime mortgage product providing 100% f
Slide 14: What Happened To Cause The Subprime Problems? (Continued)
What Happened To Cause The Subprime Problems? (Continued) As events unfolded, it became evident that steps Columbia had taken to manage the risks associated with this particular subprime product were insufficient to protect Columbia from the onslaught of EPD claims The problems at Columbia were exac
Slide 15: What Corrective Action Is OceanFirst Taking?
What Corrective Action Is OceanFirst Taking? Subprime loan origination at Columbia was shut down in March While we initially found no widespread evidence of fraud, we have recently initiated a more thorough independent forensic review to confirm our earlier assessment Internal controls on financial
Slide 16: What Corrective Action Is OceanFirst Taking? (Continued)
What Corrective Action Is OceanFirst Taking? (Continued) In April following the end of the quarter, additional charges of $12 million were taken relative to Q1 2007 subprime activity: A mark-to-market of Columbia loan inventory which was held for sale A write-off of Goodwill from the August 2000 acq
Slide 17: How Long Will It Take To Be Completely Resolved?
How Long Will It Take To Be Completely Resolved? Issues at Columbia have been recognized, contained, and provided for $21.6 million in charges have been taken to earnings through 1Q 2007 The assumptions used in providing for potential losses from repurchase claims are proving to be valid through May
Slide 18: Repurchase Requests and Loss Reserve Amounts
Repurchase Requests and Loss Reserve Amounts $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Claims Reserve Claims Reserve Claims Reserve 12/31/2006 3/31/2007 5/15/2007 As expected, the rate of receipt of new repurchase requests has slowe
Slide 19: OceanFirst Without Columbia and Subprime Lending?
OceanFirst Without Columbia and Subprime Lending? Tighter, better focused Community Bank operation Despite heavy losses associated with Columbia in the short run, the overall financial impact on OceanFirst is very manageable Absent Columbia activities, with the continued hostile operating environmen
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