Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Day (September 2018)
73 slides from Oceanfirst Financial's investor day presentation, Sep 12, 2018
Slide 1: OceanFirst Financial Corp. Investor Day
. . . OceanFirst Financial Corp. Investor Day September 12, 2018 110 West Front Street, Red Bank, NJ 07701 Webcast Link: http://irsolutions.snl.com/corporateprofile.aspx?iid=102614 . . .
Slide 2: Forward Looking Statements
I N V E S T O R D A Y 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 de
Slide 3: Discussion Topics
I N V E S T O R D A Y P R E S E N T A T I O N . . . Discussion Topics Welcome Introduction Digital & Customer Strategy Satisfaction Corporate Cash Risk Cyber Management Landscape Security . . . S E P T E M B E R | 2018 IT & Operations Panel Discussion Closing Remarks 3
Slide 4: Welcome
. . . Welcome Christopher Maher Chairman and Chief Executive Officer
Slide 5: Strategic Objectives: 2018-2023
I N V E S T O R D A Y P R E S E N T A T I O N . . . Strategic Objectives: 2018-2023 • Expand human capital – breadth & depth • Demonstrate consistent and broad top quality performance • ROA • Net interest margin • Asset quality • ROTCE • Efficiency ratio • Regulatory compliance • Expand product line
Slide 6: Introduction & Customer Satisfaction
. . . Introduction & Customer Satisfaction Joseph Lebel Executive Vice President & Chief Banking Officer
Slide 7: Net Promoter Score (NPS) Overview
I N V E S T O R D A Y P R E S E N T A T I O N . . . Net Promoter Score (NPS) Overview The Net Promoter Score is determined by subtracting the % of detractors from the % of promoters. However, in order to obtain the % of each, you must take into consideration the total number of responses, including
Slide 8: Quantitative Management of Client Satisfaction
I N V E S T O R D A Y P R E S E N T A T I O N . . . Quantitative Management of Client Satisfaction 78k+ customers added with Cape 57k+ customers 80% conversion. added with OCH 70k+ customers conversion. added with Sun conversion. 70% 60% 50% 40% 41% - 2017 Bank Industry Average1 30% 20% SAMPLE: Cust
Slide 9: Digital Strategy
. . . Digital Strategy David R. Howard President, Digital Strategy & Innovation
Slide 10: Digital Strategy Introduction
I N V E S T O R D A Y P R E S E N T A T I O N . . . Digital Strategy Introduction Why are we focusing on this? • OceanFirst has been tech-savvy as compared to community bank peers • The gap to best-in-class was more significant • Strategy is to be a Fast Follower Discussion Topics Research Products
Slide 11: Digital Strategy: Strategic Focus 2017-2018
I N V E S T O R D A Y P R E S E N T A T I O N . . . Digital Strategy: Strategic Focus 2017-2018 • Digital strategy team Rebecca Tricia Ciliberto, Rothstein, Senior Customer Marketing Experience Officer Officer Richard Jillian DiLouie, Santanello, Quantitative Instructional Analytics Designer • Six-m
Slide 12: Digital Product Offerings
I N V E S T O R D A Y P R E S E N T A T I O N . . . Digital Product Offerings Online Banking Mobile Banking Apps Biometric ID Verification Remote Check Deposit Bill Pay P2P Transfers Online Account Opening Apple Pay Samsung Pay Google Pay Digital Loyalty Programs CardValet Fraud Mitigation Video Ban
Slide 13: Personal Financial Management in OFB's App
I N V E S T O R D A Y P R E S E N T A T I O N . . . Personal Financial Management in OFB’s App Link Accounts Track Spending Budgeting Digital Promotion Get Mobile hAPPy! Introducing Money Management . . . D I G I T A L S T R A T E G Y New PFM tool brings OFB to parity with Best-In-Class (Finn & Move
Slide 14: Online Account Opening Upgrade
I N V E S T O R D A Y P R E S E N T A T I O N . . . Online Account Opening Upgrade Old New Products Limited products (primarily CDs) Nearly all retail products No promotional use ~10 promotion spaces available Rewards banking, Fresh Start Mobility Traditional computer only Simple, mobile first desig
Slide 15: Account Opening: Process & Dashboards
I N V E S T O R D A Y P R E S E N T A T I O N . . . Account Opening: Process & Dashboards . . . D I G I T A L S T R A T E G Y Robust monitoring protects against fraud and allows tailored customer outreach. 15
Slide 16: Web Based Investing with A Human Touch
I N V E S T O R D A Y P R E S E N T A T I O N . . . Web Based Investing with A Human Touch Customized Risk-Based Portfolios . . . D I G I T A L S T R A T E G Y On parity with SigFig and serves beginning savers to high net worth customers. 16
Slide 17: Digital Banking Culture Gap
I N V E S T O R D A Y P R E S E N T A T I O N . . . Digital Banking Culture Gap Online Banking Bill Pay Digital Payments Security & Safety Certified Digital Week 1 2 3 4 5 6 7 Banker Training Money Mobile App eWallets Management Team Goals Employee Mobile Usage Key Metric % Weight 100% Deposit Growt
Slide 18: Customer Mobile Activation
I N V E S T O R D A Y P R E S E N T A T I O N . . . Customer Mobile Activation Acquired banks all had lower mobile 27% Mobile Activations Up 26% usage: 25% • Cape: 14% 23.4% • Ocean City: 20% 23% • Sun: 16% 21% Branches are sharing best practices: 19% 18.6% • Highest branch (OFB): 42% • Lowest branc
Slide 19: Definition of Service Has Changed
I N V E S T O R D A Y P R E S E N T A T I O N . . . Definition of Service Has Changed Old Style New Style • What’s my balance • Converting to “Customer Help Desk” • Support phone, text, chat, email, and • I forgot my password social media channels • I lost my debit card • Help customers set-up onlin
Slide 20: Customer Service Infrastructure Upgrade
I N V E S T O R D A Y P R E S E N T A T I O N . . . Customer Service Infrastructure Upgrade Agent Availability per Interval 30.0 20.0 Agents Available 10.0 Abandoned 0.0 Agents required 6:45 7:30 8:15 9:00 9:45 13:30 10:30 11:15 12:00 12:45 14:15 15:00 15:45 16:30 17:15 18:00 18:45 • Total Sessions:
Slide 21: Tangible Results
I N V E S T O R D A Y P R E S E N T A T I O N . . . Tangible Results • Mobile Apps Retail Online Delivering results that are measurable, 90-Day Active Banking repeatable, and scalable, which: Up 52% y/y Registration • Increase customer retention Up 37% y/y • Increase share of wallet • Reduce cost to
Slide 22: Partners and Benchmarks
I N V E S T O R D A Y P R E S E N T A T I O N . . . Partners and Benchmarks : : : OLLOW ARTNERS UPPORT F P S E E UR W W O . . . D I G I T A L S T R A T E G Y We try to be a “fast follower” by partnering with or being customers of the Best-In-Class. 22
Slide 23: What's Next
I N V E S T O R D A Y P R E S E N T A T I O N . . . What’s Next • Foundation is ready People Products Infrastructure • Digital promotion stage has arrived • Targeted advertising campaigns by channel, demographic, geography Ready • Relative pricing model To Go! • OFB vs. Chase, TD, Santander, etc. •
Slide 24: Corporate Cash Management
. . . Corporate Cash Management Jeana Piscatelli Director of Cash Management, Senior Vice President
Slide 25: Process at the Speed of Life
I N V E S T O R D A Y P R E S E N T A T I O N . . . Process at the Speed of Life Consumer expectation cross over to B2B . . . C O R P O R A T E C A S H M A N A G E M E N T 25
Slide 26: Industry Parallels
I N V E S T O R D A Y P R E S E N T A T I O N . . . Industry Parallels Business and Financial Services Trends Proposition Canvas Client Needs Technology Customer Focus on solving problems for Customer Centric customers, simply and efficiently . . . C O R P O R A T E C A S H M A N A G E M E N T Focus
Slide 27: Cash Management Team
I N V E S T O R D A Y P R E S E N T A T I O N . . . Cash Management Team Single CRM Platform CM Director Jeana Piscatelli Sales Dedicated Service & Support Cash Management Cash Management Operations Consultants (CMC) Manager Cash Management B.O.S.S. Team Central Region Operations Supervisor Manager
Slide 28: Our Solutions
I N V E S T O R D A Y P R E S E N T A T I O N . . . Our Solutions • Convert paper to Competitive with PNC, electronic • Account reconcilement • Initiate ACH and wires processing (ARP) Bank of America, online • Business online banking Wells Fargo, TD Bank • Electronic receivables • Positive pay and J
Slide 29: Boots on the Ground: Sun Conversion
I N V E S T O R D A Y P R E S E N T A T I O N . . . Boots on the Ground: Sun Conversion Team Process drove 100% 20+ Team Members retention of Sun 125+ Weekly In-Person “Boots” cash management Calls Team Calls customers Extended Customer Service OVER 800 Conversion Hours CUSTOMERS Package Weekly Crea
Slide 30: Our Client Base
I N V E S T O R D A Y P R E S E N T A T I O N . . . Our Client Base Essential Monthly Impact Transaction Volumes 20 Years Experience 3,600 $41 Million in $2.4 Billion+ Customers Escrow balances $2.3 Billion in Balances 270,000+ $4 Million+ ACH & Wires Annualized Fee Income . . . C O R P O R A T E C
Slide 31: Our Opportunity
I N V E S T O R D A Y P R E S E N T A T I O N . . . Our Opportunity S&P Global: Market Intelligence1 Cash Management services are now fully digital, allowing OceanFirst to compete for a massive pool of low-cost deposits. . . . C O R P O R A T E C A S H M A N A G E M E N T 31 1 Taken from 2018 S&P Gl
Slide 32: Our Opportunity: FDIC Deposits
I N V E S T O R D A Y P R E S E N T A T I O N . . . Our Opportunity FDIC Deposits Comprised of Banks on previous slide (Billions) Retail Footprint1 $96 The commercial deposit market within a 2-hour drive, estimated to represent about 50% of these figures, presents a 2 massive opportunity for Greater
Slide 33: Risk Landscape
. . . Risk Landscape Grace Vallacchi Executive Vice President & Chief Risk Officer
Slide 34: Enterprise Risk Management Framework
I N V E S T O R D A Y P R E S E N T A T I O N . . . Enterprise Risk Management Framework Board Oversight Risk Corporate Assessment Governance & Management Enterprise Risk Management Framework Personnel Risk Management Reporting Capital . . . Planning R I S K L A N D S C A P E 34
Slide 35: Enterprise Risk Management Framework (cont.)
I N V E S T O R D A Y P R E S E N T A T I O N . . . Enterprise Risk Management Framework (cont.) Board Oversight Risk Corporate Assessment Governance & Management Enterprise Risk Management Framework Personnel Risk Management Reporting Capital . . . Planning R I S K L A N D S C A P E 35
Slide 36: Three Lines of Defense
I N V E S T O R D A Y P R E S E N T A T I O N . . . Three Lines of Defense LINES OF BUSINESS RISK MANAGEMENT AUDIT • Commercial banking • Board structure and • Internal audit • Residential/consumer renewal process • External audit direct bank • Governance practices • Treasury • Committee structure •
Slide 37: Preliminary CECL and DFAST Timeline
I N V E S T O R D A Y P R E S E N T A T I O N . . . Preliminary CECL and DFAST Timeline Dodd Frank Act The final CECL timeline will depend on a stress testing variety of factors, both internal and external. CECL Parallel Run Assess impact to capital & earnings CECL Parallel Run ALLL: Incurred Finali
Slide 38: Lunch Break
. . . OceanFirst Financial Corp. Investor Day – Lunch Break September 12, 2018 . . .
Slide 39: Cyber Security
. . . Cyber Security Brian Schaeffer, CISSP, CISA Chief Information Security Officer
Slide 40: Background Noise
I N V E S T O R D A Y P R E S E N T A T I O N . . . Background Noise . . . Source: Domo C Y B E R S E C U R I T Y Digital proliferation drives exponential increases in data and transactions. 40
Slide 41: Financial Activity
I N V E S T O R D A Y P R E S E N T A T I O N . . . Financial Activity . . . Financial services digital volumes reflect broader trends. C Y B E R S E C U R I T Y 41 1 Source: Domo.
Slide 42: The Challenge
I N V E S T O R D A Y P R E S E N T A T I O N . . . The Challenge 17 Mobile Malware $400 $856,164 Blocked Ransomware Global Cost of Source: Symantec payments Cybercrime ($300K in the US) 126,402 Source: McAfee Source: CNBC Blocked Threats 190 Source: TrendMicro Medical Records Stolen 542 1,274 Sourc
Slide 43: Cybercrime-as-a-Service
I N V E S T O R D A Y P R E S E N T A T I O N . . . Cybercrime-as-a-Service Money Mules Droppers Up to 60% of account Free - $10,000 balance Spammers Malware $1 - $4 per 1,000 Free - $20,000 emails Infrastructure Exploit Kits $50 - $1,000 per month $2,000 per month . . . Efficiency is not limited to
Slide 44: Visible Threats
I N V E S T O R D A Y P R E S E N T A T I O N . . . Visible Threats Public Web 4% of the Internet 96% of the Internet Deep Web Dark Web . . . C Y B E R S E C U R I T Y The greatest threats are well below the sight line of most organizations. 44
Slide 45: Paradigm Shift
I N V E S T O R D A Y P R E S E N T A T I O N . . . Paradigm Shift Protect data, not just devices. Traditional Thinking Cloud Build layers around a physical location Vendor Mobile . . . C Y B E R S E C U R I T Y 45
Slide 46: Alignment with Frameworks and Standards
I N V E S T O R D A Y P R E S E N T A T I O N . . . Alignment with Frameworks and Standards Innovative Advanced Intermediate Evolving Baseline . . . NIST - Cybersecurity FFIEC – Cybersecurity Assessment C Y B E R S E C U R I T Y Framework Tool 46
Slide 47: Multifaceted Approach
I N V E S T O R D A Y P R E S E N T A T I O N . . . Multifaceted Approach People System Cybersecurity Process Program . . . Regulatory Resiliency C Y B E R S E C U R I T Y 47
Slide 48: Force Multiplier
. . . Force Multiplier How do you mitigate Vendors threats while managing budgets? Information Technology Cybersecurity Program Infragard Staff and FS-ISAC Customers Physical Security Law Enforcement 48
Slide 49: On the White Board
I N V E S T O R D A Y P R E S E N T A T I O N . . . On the White Board 01 04 Leverage Simplify Data Artificial Security Intelligence Leveraging technology, 02 05 tools, and Single Pane Drive Risk partners allows of Glass Adverse Cyber Security Culture to scale. 03 06 Improve Cybersecurity Program Co
Slide 50: IT & Operations Strategy
. . . IT & Operations Strategy Joseph Iantosca Executive Vice President & Chief Administrative Officer
Slide 51: Focus Areas
I N V E S T O R D A Y P R E S E N T A T I O N . . . Focus Areas • Talent Operations • Process • Business Intelligence Technology • Project Management • Retail Real Estate • Administrative . . . I T & O P E R A T I O N S S T R A T E G Y 51
Slide 52: Operations & Technology Strategy
I N V E S T O R D A Y P R E S E N T A T I O N . . . Operations & Technology Strategy OPERATIONS TALENT 174 professionals, including 30 IT staff Process Technology STRATEGIC PARTNERS . . . I T & O P E R A T I O N S S T R A T E G Y 52
Slide 53: Business Intelligence
I N V E S T O R D A Y P R E S E N T A T I O N . . . Business Intelligence BI Data Model • Business Intelligence • Initiated in 2014 Accounts, Cards, Mobile, Customers, Transactions, • 8 FTE and growing Prospects, Collateral Centers of • Data Science focus Influence • Interns through advanced degrees
Slide 54: Project Management Office
I N V E S T O R D A Y P R E S E N T A T I O N . . . Project Management Office • Project Management Office Acquisition Metrics • Created in 2016 210,000 Customer & 220,000 Account Records • 5 FTE • Engaged in all key Bank projects 161,000,000 Data Elements converted & validated 18 Applications integr
Slide 55: Pro-active Management of Real Estate Assets
I N V E S T O R D A Y P R E S E N T A T I O N . . . Pro-active Management of Real Estate Assets Evolution of Real Estate Assets 600,000 100 90 500,000 80 400,000 70 60 300,000 50 40 of # Locations SquareFootage Toms River 200,000 30 100,000 20 10 - - Aug '15 May '16 Oct '16 Nov '16 May '17 Jan '18 J
Slide 56: Branch Consolidations
I N V E S T O R D A Y P R E S E N T A T I O N . . . Branch Consolidations • Proprietary Model • Highly Accurate • Multiple Client Touches Deposit results tracked to ensure maximum retention. . . . I T & O P E R A T I O N S S T R A T E G Y 56
Slide 57: Measuring Efficiency
I N V E S T O R D A Y P R E S E N T A T I O N . . . Measuring Efficiency Assets & Core Net Income per FTE1 Efficiency Ratio 120 10,000 65% 100 8,000 60% 80 6,000 60 55% 4,000 40 TARGET Assets Assets per FTE 50% 20 2,000 45% CoreNet CoreNet Income per FTE 2013 2014 2015 2016 2017 6/30/2018 40% Assets
Slide 58: Conclusion
I N V E S T O R D A Y P R E S E N T A T I O N . . . Conclusion Operations Talent Process The foundation for future growth and Efficiency scalability is well established. Business Project Intelligence Management . . . Technology I T & O P E R A T I O N S S T R A T E G Y 58
Slide 59: Panel Discussion
. . . Panel Discussion Joseph Lebel, Executive Vice President & Chief Banking Officer Vincent D’Alessandro, Southern Region President George Destafney, Central Region President
Slide 60: Recruiting
I N V E S T O R D A Y P R E S E N T A T I O N . . . Recruiting • Targets • How? Employee Dedicated Market Influencers Referrals Recruiter (CPA/Legal) • Outlook • Projected to hire 4 new RM’s by year end . . . P A N E L D I S C U S S I O N 60
Slide 61: What Is Our In-Market Competition Offering?
I N V E S T O R D A Y P R E S E N T A T I O N . . . What is Our In-Market Competition Offering? COMPETITIVE ANALYSIS1 PNC Bank TD Bank Bank of America WellsFargo $ $ $ $ Money Market 0.13% 0.05-0.35 Tiered 0.06% 0.03-.05 Tiered Accounts (MMAs) CDs (12 mos.) 0.20% 0.50% 0.05% 0.15% FDIC Deposits in $
Slide 62: Regions
I N V E S T O R D A Y P R E S E N T A T I O N . . . Regions Corporate George Destafney Central Region President Vincent D’Alessandro Southern Region President . . . P A N E L D I S C U S S I O N 62
Slide 63: Closing Remarks
. . . Closing Remarks Christopher Maher Chairman and Chief Executive Officer
Slide 64: Summary
I N V E S T O R D A Y P R E S E N T A T I O N . . . Summary • Investment in organic growth provides strong foundation • Digital investments are substantially advanced, marketing program ahead • Operating efficiencies poised to improve • Talent war is real; OceanFirst has been attracting extraordinar
Slide 65: Appendix A: Meet the Team
. . . Appendix A: Meet the Team . . .
Slide 66: Meet Our Team: Christopher Maher
I N V E S T O R D A Y P R E S E N T A T I O N . . . Meet Our Team Christopher Maher is Chairman, President and Chief Executive Officer of OceanFirst Financial Corp. and OceanFirst Bank. Mr. Maher is Chairman of the Board of Directors of OceanFirst Foundation. Prior to joining OceanFirst, Mr. Maher s
Slide 67: Meet Our Team: David Howard
I N V E S T O R D A Y P R E S E N T A T I O N . . . Meet Our Team David Howard is President of Digital Strategy & Innovation at OceanFirst Bank where he oversee’s strategy and implementation of all digital and broadly distributed channels and products of the Bank. Prior to this role, he was the bank
Slide 68: Meet Our Team: Grace Vallacchi
I N V E S T O R D A Y P R E S E N T A T I O N . . . Meet Our Team Grace Vallacchi joined OceanFirst Bank, N.A. as Executive Vice President and Chief Risk Officer in September 2017. She is an experienced risk management professional with more than 25 years of experience in commercial banking and regu
Slide 69: Meet Our Team: Joseph Iantosca
I N V E S T O R D A Y P R E S E N T A T I O N . . . Meet Our Team Joseph Iantosca is the Executive Vice President/Chief Administrative Officer. He is responsible for the planning, execution, and management of Operations, Technology (including Business Intelligence and the Project Management Office),
Slide 70: Meet Our Team: George Destafney
I N V E S T O R D A Y P R E S E N T A T I O N . . . Meet Our Team George Destafney is President of the Central Region of OceanFirst Bank. As a Regional President, Mr. Destafney manages customer facing initiatives including: commercial lending, consumer lending, retail banking, and government banking
Slide 71: Appendix B: Links for Additional Information
. . . Appendix B: Links for Additional Information . . .
Slide 72: New Digital Product Links
. . . New Digital Product Links • New Account Opening • Click the following link to demo or open an OceanFirst checking account • https://www.oceanfirstonline.com/home/personal/ checking • Nest Egg at Ocean First • Click the following link to demo or open a Nest Egg at OceanFirst account • https://w
Slide 73: Additional Links
. . . Additional Links • Bloomberg Article • Click the following link to view an article published by Bloomberg regarding financial technology for senior citizens • https://www.bloomberg.com/news/articles/2018- 08-07/senior-citizens-get-support-from-financial- technology • YouTube Channel • Click th