Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (June 2009)
29 slides from Oceanfirst Financial's investor presentation, Jun 12, 2009
Slide 1: OceanFirst Financial Corp. Investor Presentation
NASDAQ: OCFC 1 JUNE 12, 2009 OceanFirst Financial Corp. OceanFirst Financial Corp. INVESTOR PRESENTATION INVESTOR PRESENTATION JUNE 12, 2009 Exhibit 99.1
Slide 2: Forward-looking statements
NASDAQ: OCFC 2 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”, “intend”, “ant
Slide 3: Agenda
NASDAQ: OCFC 3 Welcome to OceanFirst John R. Garbarino, Chief Executive Officer In-depth look at three topical issues CJBK Strategic Combination Michael J. Fitzpatrick, Chief Financial Officer Vito R. Nardelli, Chief Operating Officer OCFC Credit Quality Joseph J. Lebel, Chief Lending Officer U.S. T
Slide 4: Strategic Combination with Central Jersey Bank, N.A.
NASDAQ: OCFC 4 Strategic Combination with Strategic Combination with Central Jersey Bank, N.A. Central Jersey Bank, N.A. Enhancing Community Bank Enhancing Community Bank Franchise at the Jersey Shore Franchise at the Jersey Shore
Slide 5: Transaction Summary
NASDAQ: OCFC 5 Exchange Ratio: Fixed at 0.500 OCFC shares for each CJBK share Transaction Value : $68.4 million, or $7.12 per share Consideration: 100% stock Estimated Cost Savings: 35% of CJBK’s operating expenses Estimated Merger Charges: $5.5 million pre-tax Board Representation: Two board seats
Slide 6: Transaction Assumptions
NASDAQ: OCFC 6 CJBK earnings – CJBK management projections as adjusted by OCFC OCFC earnings – Wall Street consensus estimates for 2009 and 2010 Total pre-tax loan mark-to-market adjustment – $15.2 million $7.2 million in current reserves Additional $8.0 million loan adjustment Core deposit intangib
Slide 7: Transaction Highlights: Strategic Rationale
NASDAQ: OCFC 7 Naturally expands OceanFirst’s presence along coastal area of New Jersey in adjacent, affluent market Central Jersey footprint is one that OceanFirst would seek to replicate Positions pro-forma company as 7 largest publicly traded banking institution headquartered in New Jersey and en
Slide 8: Transaction Highlights: Financial Rationale
NASDAQ: OCFC 8 Accretive to OCFC’s 2010 operating earnings per share IRR in mid-teens Improves funding mix with reduced reliance on non-deposit funding Opportunities for additional earnings accretion not factored into current transaction modeling Transaction Highlights Transaction Highlights Financi
Slide 9: Transaction Highlights: Low Integration Risk
NASDAQ: OCFC 9 Essentially an in-market transaction Operational and logistical synergies Cost savings are achievable Transaction Highlights Transaction Highlights Low Integration Risk
Slide 10: Pro-Forma Franchise Overview
NASDAQ: OCFC 10 Deposits/ (Dollars in millions) Branches Loans Deposits Branch OceanFirst Financial Corp. 23 $1,663,939 $1,313,470 $57,107 Central Jersey Bancorp 13 361,846 430,555 33,120 Pro-forma snapshot (as of 3/31/09) Assets: $2.5 Billion Loans: $2.0 Billion Deposits: $1.7 Billion TCE: $151.5 M
Slide 11: Transaction Multiples
NASDAQ: OCFC 11 OCFC / CJBK Mid-Atlantic Deals Since January 1, 2008 Mid-Atlantic Deals Since January 1, 2007 Price / LTM Earnings 24.5x 22.3x 25.4x Price / Book Value 0.77x 1.37x 2.07x Price / Tangible Book Value 1.28x 1.37x 2.28x Core Deposits Premium 4.3% 8.4% 15.3% One Day Market Premium 20.2% 2
Slide 12: Pro-Forma Composition
NASDAQ: OCFC 12 Source:SNL Financial and company filings Note: OCFC loan and deposit composition based on bank level 3/31/09 call report CJBK loan and deposit composition based on 3/31/09 FRY-9C Pro-Forma Composition Pro-Forma Composition
Slide 13: Due Diligence Process
NASDAQ: OCFC 13 Due diligence conducted by Bank personnel and Ardmore Banking Advisors Reviewed 35% of total commercial loan portfolio No shared national credits Reviewed all non-performing, substandard and watch list commercial loans Reviewed sample of consumer/residential loan portfolio Analyzed 1
Slide 14: Financial Impact
NASDAQ: OCFC 14 Combined company to be well capitalized with more than $151 million of tangible common equity Tangible common ratio – 6.2% Total risk-based capital ratio – 13.4% Accretive to 2010 operating earnings per share IRR in mid-teens Financially positioned to take advantage of local future g
Slide 15: Summary
NASDAQ: OCFC 15 Strategically attractive partnership Enhancing community bank franchise at the Jersey Shore Positions the combined company to compete more effectively as a larger, stronger Community Bank and to take advantage of market opportunities Financially compelling for OceanFirst shareholders
Slide 16: Solid Credit Metrics in a Deteriorating Economy
NASDAQ: OCFC 16 OCEANFIRST BANK SOLID CREDIT METRICS IN A DETERIORATING ECONOMY
Slide 17: Credit Management in a Changing Environment
NASDAQ: OCFC 17 Commercial Lending Multiple points of contact – Relationship and Portfolio Managers Unilateral underwriting by Credit Administration ensures objectivity Dual signature authority with required credit officer approval Larger credit facilities require Management Credit Committee or Boar
Slide 18: Credit Management in a Changing Environment: Consumer Lending
NASDAQ: OCFC 18 Consumer Lending Tightened underwriting standards and eliminated certain products (2007) Dual signature authority requiring the credit officer for loan exceptions Reduced Loan-to-Value limits on various products Reduced or eliminated existing equity line availability based on updated
Slide 19: Credit Management in a Changing Environment: Residential Lending
NASDAQ: OCFC 19 Residential Lending CHL shutdown eliminated all sub-prime and Alt-A products (2007) Tightened underwriting standards Better utilize loan level pricing to reflect loan risk Credit Management in a Changing Environment Credit Management in a Changing Environment
Slide 20: Portfolio Characteristics Reflect Conservative Underwriting
NASDAQ: OCFC 20 One-to-Four Family Loans: Weighted average loan to value at May 31, 2009 62.1% Weighted average loan to value of loans originated during the year ended December 31, 2008 68.9% Weighted average loan to value of loans originated during the five months ended May 31, 2009 61.6% Average F
Slide 21: Credit Risk Constrained by Portfolio Characteristics
NASDAQ: OCFC 21 Commercial Lending Diversified, low risk $409 million portfolio Commercial real estate - 85% $586,000 average C & I - 15% $124,000 average Only 8 relationships with total exposure over $7 million No shared national credits or subordinate participations Nominal CRE maturity exposure o
Slide 22: Commercial Loan Portfolio Segmentation
NASDAQ: OCFC 22 Real Estate Rental 33.1% Construction 7.8% Retail Trade 5.9% Wholesale Trade 8.0% Healthcare 4.9% Accommodations/ Food Services 5.6% Other Services 5.6% Arts/Entertainment/ Recreation 9.3% Miscellaneous 19.8% Total Commercial Loan Portfolio by Industry Concentration Commercial Real E
Slide 23: Credit Risk Constrained by Portfolio Characteristics
NASDAQ: OCFC 23 Strong credit quality indicators Non-performing loans total $22.4 million (135 bps of total loans receivable) Includes $4.0 million of residential mortgage loans aggressively written down following wholesale mortgage banking subsidiary shutdown in 2007 Delinquency rates at March 31,
Slide 24: Loan Portfolio Distribution
NASDAQ: OCFC 24 1.35% 0.05% 0.42% 0.16% 0.72% Percent of Total Loans $22,403 $901 $6,913 $2,600 $11,989 Non-Performing Loans 100.0% 3.7% 21.5% 13.3% 61.5% Percent of Total Loans $1,662,170 $62,070 $357,232 $220,386 $1,022,482 Loan Portfolio Balance Total Commercial Commercial Real Estate and Constru
Slide 25: Credit Risk Management
NASDAQ: OCFC 25 0 150 300 450 600 750 900 1Q08 2Q08 3Q08 4Q08 1Q09 Net Charge-Offs Provision for Loan Losses Loan Loss Provisions Exceeding Net Charge-Offs (A) Net charge-offs in 1Q09 include $366,000 of charge-offs relating to subprime loans originated by the Company’s mortgage banking subsidiary w
Slide 26: Summary
NASDAQ: OCFC 26 Strong underwriting discipline Seasoned credit administration Local market knowledge Historically low loan loss experience Summary Summary
Slide 27: U.S. Treasury Capital Purchase Program
NASDAQ: OCFC 27 U.S. TREASURY CAPITAL PURCHASE PROGRAM
Slide 28: Capital Purchase Program
NASDAQ: OCFC 28 Hedge against further economic deterioration : Preferred stock outstanding $38.3 million Common stock warrants 380,853 Immediate objective to cover dilutive effect of investment Levered 2.4x with wholesale funding Invested in local lending and Agency MBS Going forward – working as in
Slide 29: Thank you for your interest in OceanFirst Financial Corp.
NASDAQ: OCFC 29 Thank you for your interest in OceanFirst Financial Corp. Thank you for your interest in OceanFirst Financial Corp.
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